Pfeaff v. Jones

• Decision Date: 29 January 1879
• Citation: 50 Md. 263
• Parties: ULRICH PFEAFF v. ROBERT JONES and Hettie G. Roche, Adm'rs of Patrick J. Roche.
• Court: Maryland Court of Appeals

50 Md. 263

ULRICH PFEAFF v. ROBERT JONES and Hettie G. Roche, Adm'rs of Patrick J. Roche.

Court of Appeals of Maryland

January 29, 1879

Appeal from the Circuit Court of Baltimore City.

This appeal was taken from two orders of the Circuit Court of Baltimore City, (Gilmor, J.,) one dismissing the petition of the appellant praying to be made a party in a proceeding for the sale of mortgaged premises, on the ground that he had a judgment against the mortgagor which should be satisfied out of the balance undistributed after satisfaction of the mortgage claim; and the other, overruling his exceptions to the ratification of the auditor's account, whereby the appellant was excluded from the distribution of the balance and the same ordered to be distributed to the appellees representing the claim of a second mortgagee.The facts of the case are stated in the opinion of the court.

The cause was argued before BARTOL, C.J., BOWIE, BRENT, MILLER and ALVEY, JJ.

Richard Hamilton, for the appellant.

The order of August 30th, 1875, ratifying the first auditor's account, is a final decree and could not be rescinded after the term.Wayman v. Jones,4 Md. Ch. 500;Ware v. Richardson,3 Md. 505;Burch v. Scott,1 G. & J. 393;Scott v. State,2 Md. 291.

If the court had the power to rescind said order it could only be upon a bill of review, making all parties interested in the fund then in the hands of the trusteesparties to the cause.Pfeltz v. Pfeltz,1 Md. Ch. 455;Lovejoy v Irelan,19 Md. 57.

The Circuit Court erred in dismissing the petition of the appellant absolutely.If it was proper to dismiss it at all it should have been dismissed without prejudice to future proceedings.Griffith v. Bank,6 G. & J. 424;McLaughlin v. Swann,18 How. 217.

The second mortgage having been recorded more than six months after its date, and the claim of the appellant being subsequent to the mortgage it is to be preferred to the mortgage.Build.Asso. v. Wilson,41 Md 506.

William M. Busey and Samuel Snowden, for the appellees.

The court had a right to rescind the order of final ratification of the first account, after the term in which said account was so ratified had passed.

So long as the proceeds of sale have not been distributed, they are under the control of the court; and it can make such orders and grant such relief as the ends of justice may require.Preston v. Fryer,38 Md. 224;Norris v. Lantz,18 Md. 260.

Where property is sold under a decree of a court of equity, the proceeds are considered to be in the custody of the court.Brooks v. Brooke,12 G. & J. 306;Lee v. Boteler,12 G. & J. 325.

While the fund remains in court, the application of a creditor, whose claim has been overlooked or omitted, if he has not been guilty of laches, is entitled to favorable consideration, and will always, upon the institution of proper proceedings, be allowed to participate in the distribution.Price v. Bank,29 Md. 375.

The mortgage to Patrick J. Roche was long prior to the recovery of the said judgment by the appellant, and the lien under the mortgage was not divested by the sale under the first mortgage, but was transferred to the fund, and being prior to the inchoate lien acquired by appellant under his attachment, it was not affected by such attachment, and could not be postponed thereto.Markey v. Langley,2 Otto, 142;Brown v. Stewart,1 Md. Ch. 87.

The second mortgage operated as an assignment of McClenahan's interest.It was clearly competent for the court to direct payment to be made to Roche's administrators, as assignees thereof, without rescinding the order of ratification of said first account.

A court of equity would not assist the appellant as against the equitable rights of the appellees under their mortgage.McPherson v. Snowden, 19 Md. 233.

Bowie J., delivered the opinion of the court.

This appeal is taken from an order of the Circuit Court of Baltimore City, passed on the 23rd of February, 1877, dismissing the petition of the appellant, theretofore filed in the cause of the Citizens' Security and Land Company of Baltimore City, against James McClenahan therein pending.

By a decree in the above cause, certain property mortgaged by McClenahan to the Company, had been sold, and the proceeds distributed by an account of the auditor, first to pay the mortgage debt, and the balance amounting to $974, assigned to the mortgagor.

This account was finally ratified by order of the court on the 30th of August, 1875.

On the 18th of July, 1876, the appellees Jones & Roche, Adm'rs of Roche, filed a petition in the cause, alleging that the mortgagor, McClenahan, after the execution of the mortgage to the Company, had mortgaged the same lot to their intestate, to secure the payment of the sum of fifteen hundred dollars; that there was still due thereon, a large balance, and prayed the final order of ratification in the original cause awarding the balance to McClenahan be stricken out, and the cause remanded to the auditor, for the purpose of allowing the petitioners' claim.The court granted the prayer of the petition so far as to modify the order of ratification, assigning the balance to McClenahan, and the cause was remanded to the auditor to state another account.The auditor stated another account in conformity with the petition of the appellees which was ratified nisi.

On the 22nd of November, 1876, the appellant filed a petition alleging that he obtained a judgment on the 16th of January, 1875, against McClenahan for $178.75 and costs, which was still unsatisfied; that an attachment by way of execution issued on the same on the 21st of October, 1875, which was laid in the hands of the trustees on the same day, and since then, the appellees had filed their petition and procured the proceedings before recited, and without notice to the appellant, by the consent of the complainant and trustees, the first order of ratification had been rescinded, the cause referred to the auditor for another account, a second account stated and ratified nisi, and the trustees still held the balance in their hands.

The appellant's petition charged that the order of rescission was improvidently and illegally passed, a term having expired since it was signed and enrolled; and prayed he might be made a party to the cause, that the trustees and the petitioners, Jones & Roche, the appellees, may answer, and the order of the 18th of July, 1876, so far as it affects the ratification of the first account be rescinded, and the ratification of the second be suspended until further order, etc.

The court on the 22nd of November ordered that the appellant be made a partydefendant, and the order of the 18th of July be rescinded nisi, etc.The appellant also filed exceptions to the ratification of the account last filed to the effect following:

First.Because the same was stated by the auditor without authority of law.

Second.Because the order referring the papers to the auditor, dated July 18th, 1876, being passed after the term at which the auditor's report was ratified, was erroneous and void.

Third.Because the court had no power to pass the order of the 18th of July, 1876.

Jones & Roche, administrators of Roche, appellees, filed an answer to the appellants' petition, admitting the facts therein alleged but averring that they had an equitable lien on the balance of the fund created by the mortgage from McClenahan to Roche, dated the 6th of February, 1873, and recorded on the 7th of October, 1873, a date long prior to the laying of the attachment, and claiming they were entitled to the fund, whether the order rescinded the final order in the auditor's account, or directed the money to be paid over to the respondents.

They insisted, the laying of the attachment did not divest the equitable right of the respondents to the money, and the petitioner had an adequate remedy at law.

The cause being argued by the petitioner's and respondent's counsel, the petition of the appellant was dismissed, his exceptions overruled, and the second account of the auditor finally ratified and confirmed, from which orders this appeal is taken.

There can be no doubt, that an order ratifying and confirming an auditor's report, and directing the trustees to apply the proceeds accordingly, is an order in the nature of a final decree, from which an appeal may be taken.Wayman v. Jones,4 Md. Ch. 512;Contee v. Dawson,2 Bland, 264;Lovejoy v. Irelan,19 Md. 56.

And the general rule is, that after a decree has been enrolled, the court will not entertain any application to vary it, except upon consent of parties, or in respect of matters which are of course.Lovejoy v. Irelan,19 Md. 56.

In the present case, the complainant in the original cause expressly assented to the order rescinding the decree, and the defendant made no objection, although a copy of the petition, asking for the rescission and other relief, was duly served, by leaving the same at his place of residence, with his wife.

This case may therefore without any forced construction, be assumed to be within the exceptions to the general rule.

It is proper however to observe, that in Marbury v. Stonestreet,1 Md. 158, this court did not regard the rule as inexorable and of universal application, but seemed to intimate that under circumstances in which equity and justice demanded it, the rule even as above qualified might be departed from.There is a very distinct opinion to the same effect in Penniman v. Cole,41 Md. 609.

The appellant occupies the position of a creditor, claiming by judgment rendered on the 16th of January, 1875, on a cause of action originating after the date of the mortgage, and after its actual registration without notice.

The appellee relies on the mortgage though...