Polk v. Reynolds

• Decision Date: 24 June 1869
• Citation: 31 Md. 106
• Parties: ROBERT M. POLK and Mary Polk, His Wife v. LUTHER M. REYNOLDS.
• Court: Maryland Court of Appeals

31 Md. 106

ROBERT M. POLK and Mary Polk, His Wife v. LUTHER M. REYNOLDS.

Court of Appeals of Maryland

June 24, 1869

Appeal from the Circuit Court of Baltimore City.

The bill of complaint filed in this case on the 20th of March 1867, by the appellee, charged that he was the assignee of a mortgage executed by Robert K. Huntt to William Hamilton covering a certain leasehold interest in a lot improved by two three-story brick dwellings, on Sterrett street in the City of Baltimore, and intended to secure a debt of $1000 which became due on the 1st of January, 1859, and which at the time of filing the bill was wholly unpaid, (the date of said assignment being the 18th of February, 1867;) that on the 16th of March, 1867, for the purpose of collecting the mortgage debt, the complainant applied for and obtained a decree appointing a trustee to make sale of the mortgaged property; that the trustee so appointed, was prevented from making sale of the mortgaged property, because as the complainant had learned since he became the assignee of the mortgage, the appellant, Robert M. Polk, had set up a claim to the leasehold interest in said property, by reason of a pretended sale thereof, made on the 20th of December, 1860 by the auditor of the City of Baltimore, for State and City taxes alleged to be due on said property for the years 1857 and 1858, and a deed thereof to said Polk; that, although said pretended tax sale was not made in accordance with the laws of the State, and was wholly illegal and void, yet that the existence of said pretended claim and deed cast a cloud on the title to said property which prevented the trustee appointed under the mortgage decree from making an advantageous sale; that the said Polk had further interfered with the rights of the complainant, and had from time to time placed tenants in the two houses erected on said lot, and had collected rent from them, and appropriated the same to his own use, etc. The bill then prayed for an injunction to prevent the said Polk from interfering with the property, and asked that the tax sale should be declared void, the deed set aside and cancelled, and an account be taken of the rents received, and for general relief. The injunction was granted and issued as prayed. Subsequently Mary Polk, the wife of the appellant Robert, was made a party defendant, under an agreement of counsel, the said Robert having disclaimed any interest in the premises, he having conveyed the same to his said wife for valuable consideration, by his deed of the 16th of January, 1865. Polk and wife then filed their answer, admitting the execution of the mortgage to Hamilton, and alleging that the leasehold interest of Huntt, the mortgagor, had become, by successive transfers, vested in one Frederick S. Blitz, who held the property for a time and endeavored to turn it to some account, but finally abandoned it; that about the year 1856, Hamilton, the mortgagee, took possession of the houses which he found vacant, and let them to tenants, receiving the rents as if the property were his own; that such possession by Hamilton with the consent of Blitz, the assignee of the leasehold, operated in law as an extinguishment of the mortgage by the union in the same person of the right to the mortgage and the title to the property mortgaged, no right or encumbrance existing in any third person which required them to be kept separate. The appellant, Robert, answering for himself, admitted that he purchased the property at a tax sale, paid the purchase-money, and after the expiration of the time limited by law, received, on the 4th of January, 1862, a deed from the City Auditor for the same; that shortly afterwards, in a conversation between the appellant Robert and Hamilton, it was distinctly agreed and understood between them, that the former should pay the ground-rent of ninety-one dollars per annum to the latter, the same to be paid half yearly on the first of January and the first of July in each and every year thereafter, the appellant Robert to be the owner of the leasehold; that Hamilton mentioned something about a mortgage, but remarked that he would have to lose it, and would be perfectly satisfied to receive the ground-rent. The answer also denied that the appellee had paid any real consideration for the mortgage, and charged that if he did, he had notice of the equities existing between Hamilton and the appellants. A general replication was filed to the answer, and a considerable amount of testimony taken under a commission issued by consent, and the case being submitted after argument, the court, (Pinkney, J.,) on the 15th of July, 1868, passed a decree declaring the deed from the City Auditor to the appellant Robert, null and void, and making the injunction perpetual. From this decree the present appeal was taken.

The cause was argued before BARTOL, C.J., STEWART, MILLER, ALVEY and ROBINSON, JJ.

William C. Schley and William Schley, for the appellants:

The evidence clearly establishes, that the leasehold interest of Huntt having become, by several transfers, vested in Blitz was surrendered by him to Hamilton; and such surrender was accepted by the latter. The effect of such surrender and acceptance was a complete extinguishment of the mortgage, and this occurred long before the alleged assignment of the mortgage to the appellee. Forbes v. Moffatt, 18 Ves. 384; Compton v. Oxender, 2 Ves. Jr. 261; James v. Johnson, 6 John. Ch. 425; Hood v. Phillips, 3 Beav. 513; Viles v. Moulton, 11 Vt. 470; Mitchell v. Mitchell, 2 Gill, 230; Wahl v. Barroll, 8 Gill, 294; Glenn v. Spry, 5 Md. 110.

Therefore when the alleged assignment...