Shannon v. Howard Mutual Bldg. Ass'n

• Citation: 36 Md. 383
• Parties: DAVID R. SHANNON v. THE HOWARD MUTUAL BUILDING ASSOCIATION OF THE CITY OF BALTIMORE.
• Decision Date: 20 June 1872
• Court: Maryland Court of Appeals

36 Md. 383

DAVID R. SHANNON v. THE HOWARD MUTUAL BUILDING ASSOCIATION OF THE CITY OF BALTIMORE.

Court of Appeals of Maryland

June 20, 1872

APPEAL from the Circuit Court of Baltimore City.

On the 1st of June, 1868, the appellant executed to the appellee, a mortgage of a leasehold interest in a lot of ground situated on the north side of Hollins street in the city of Baltimore. The mortgage stated that: "Whereas the said mortgagor being a member of the said body corporate, has received therefrom an advance of thirteen hundred and fifty dollars on his nine shares of its stock. Now, therefore, this mortgage witnesseth, that in consideration of the premises and of one dollar, the said David R. Shannon doth grant unto the Howard Mutual Building Association of the city of Baltimore, and its assigns, all that lot of ground situate and lying in the city of Baltimore, and described particularly in a mortgage deed executed in favor of the Mechanics' Mutual Building Association of the city of Baltimore, by said David R Shannon, &c. * * * * *

"And the said David R. Shannon, for himself, his heirs, executors administrators and assigns, covenants with the said association and its assigns to pay and perform as follows--that is to say: To pay the mortgagee or its assigns the weekly sum of four dollars and fifty cents ($4.50) on every Thursday, until the time arrives when the said body corporate shall have sufficient funds on hand to pay the holders of every unredeemed share of its stock the sum of $250, clear of all losses and liabilities; to pay all ground-rents and taxes for which the property hereby mortgaged may become liable, when payable; to pay the interest on the said sum of $1,350 weekly from the day of the date of these presents; and also to pay the tax on the mortgage debt hereby created; also to pay all fines that may be imposed on him by the said mortgagee, in accordance with its acts of incorporation, and to keep the improvements on the said ground fully insured from loss by fire, for the use of the mortgagee; all of which payments and covenants shall continue in force until the said body corporate shall have sufficient funds on hand to pay the holders of every unredeemed share, above all losses and liabilities, the sum of $250, and the said corporation shall, by the terms of its act of incorporation, have become extinct."

"And the mortgagor consents that a decree may be passed for the sale of said property, (the sale to take place after a default in any of the conditions of this mortgage shall have continued three months,) under the provisions of the sections 782 to 792, inclusive, of Article 4 of the Public Local Laws of the Maryland Code, or any supplement thereto; or this mortgage may be foreclosed under any law or laws of said State of Maryland, intended to facilitate the regular or extrajudicial proceedings on mortgages, as fully and in the same manner as if special assent and powers were hereby given and granted."

On the 12th of March, 1869, the appellee filed its petition in the Court below, praying a decree for the sale of the mortgaged property, pursuant to the assent given in the mortgage, and the Acts of Assembly in such cases made and provided--the mortgagor having failed to comply with the conditions and agreements contained in the mortgage. With this petition was filed the mortgage and the following statement of the claim of the mortgagee, with the affidavit annexed, of the financial secretary of the association, "that the above account is just and true as stated, and that the said association hath not received, directly or indirectly, any security or satisfaction for the same, or any part thereof excepting the mortgage aforesaid and the credits given in said account."

BALTIMORE March 11 th, 1869.

MR DAVID R. SHANNON,

To the Howard Mut'l Building Association, DR. To 290 weeks' dues under his mortgage to the Association, (on 9 shares,) a. 4.50 .................................................. $1,305 00 To 290 weeks' interest, 1.56 ........................................... 452 40 --------- $1,757 40 Rebate 145 weeks' interest ............................................. 292 90 --------- $1,464 50 To arrearages for dues, interest and fines on same ..................... 557 56 --------- $2,022 06 --------- ---------

The Association estimated to run 7 years.

The Court, (PINKNEY, J.) on the same day passed a decree for the sale of the mortgaged premises. On the 23d of April, following, the appellant filed his petition, stating that he had offered to pay to the appellee his back dues in arrear, and any reasonable fines thereon, which the appellee refused to take, requiring him to pay dues and fines as stated in its account, amounting to $557.56; that the amount of his dues in arrear did not exceed $150, even with any reasonable fines added thereto, and that it was unconscionable that he should be required to pay upon so small an arrear of indebtedness, the large sum of $400, and more, as a penalty; he therefore prayed that the matter might be referred to the auditor to state an account, and that he might be allowed to bring into Court such amount as the Court should determine to be due to the appellee, and that the appellee be required to take the same, &c., and that the decree be stayed until then. An order was passed assigning a particular day for the hearing of the petition, with leave to either party to take testimony, &c. A commission was issued and testimony was taken, and on the 13th of April, 1870, the Court referred the cause to the auditor to state an account of the indebtedness of the appellant to the appellee, from the evidence in the cause, and such other proof as might be adduced before him upon proper notice. On the 9th of July, 1870, the auditor filed his report and two statements, marked No. 1 and No. 2, respectively, showing the views of the complainant and the defendant.

Statement No. 1 represented the views of the complainant and agreed with the statement which it filed on the 12th of March, 1869, except that interest was allowed the defendant on the two payments made by him from the times they were respectively made, thus reducing the sum claimed by the association to $2,021.48.

Statement No. 2, gave the defendant the benefit of his just payment by applying so much of it as would pay the dues of the 15th of October, 1868, and the fines which had been incurred on that amount, and also on the interest to the time of that payment, to wit: on the 5th of November, 1868; and also excluding from the weekly dues the weekly interest charged from the 15th of October, 1868, to the 11th of March, 1869, assuming that it had already been charged for all the time for which the defendant was liable.

The defendant excepted to the auditor's statements for the following reasons:

1st. Because of the allowance of costs against the defendant.

2d. Because of the allowance of interest against the defendant.

3d. Because of the allowance of fines against the defendant as being unconscionable and not covered by the mortgage.

The following sections of Article 2 of the By-Laws of the appellee, referred to in the argument below, will contribute to an understanding of the questions decided.

Sec. 2. Every stockholder, for every share of stock that is held in this association, shall pay the sum of fifty cents on subscribing, and fifty cents weekly thereafter, to the treasurer, or such other person or persons as shall, from time to time, by the laws or regulations of the association, be authorized to receive the same, until each unredeemed share of said stock shall be worth, in cash, $250, and there shall be funds enough in the association to pay that amount to the holders of said unredeemed shares, after paying all debts of the association. The directory shall then proceed to pay, satisfy and discharge, first, debts and liabilities of the association, and then pay over to the owner of each unredeemed share an equal dividend of all sums on hand, and which shall afterwards be received, until the whole shall be divided; and from the time of the commencement of the payments of such dividends, no further weekly dues or interest shall be payable, except that all arrears shall be fully paid up; and the association shall deliver to each morgagor who has fully complied with the conditions of his mortgage, a discharge thereof, and all papers connected therewith. After the performance of the foregoing duties, this association shall cease to exist, and it shall not be sooner dissolved; nor shall this Article be altered, amended or repealed, without the consent of four-fifths of the voting shares belonging to this association.

Sec. 3. If any stockholder shall neglect or refuse to pay his weekly dues as often as the same shall be payable as aforesaid, every stockholder so neglecting or refusing, shall forfeit and pay the additional sum of ten cents for every share of stock by him held, for every such weekly neglect or refusal, to be charged with the weekly dues.

Sec. 5. If any member of this association, having taken a loan, shall neglect or refuse to pay his weekly interest, he shall forfeit the additional sum of ten cents on each share of stock redeemed, to be charged and collected with the weekly dues.

On the 25th of September, 1871, the Court passed an order overruling the exceptions of the defendant, and ratifying Statement No. 1 of the auditor, and directing the defendant to pay to the complainant its costs incurred in the proceedings. From this order the defendant appealed.

The cause was argued before BARTOL, C.J., STEWART, BRENT, GRASON MILLER and ALVEY, J.

Samuel Snowden, for the appellant, argued

That the order of the Circuit Court ought to be reversed, for the following reasons:

1st. That no...