Stater v. Dulany

Decision Date23 October 1964
Docket NumberNo. 415,415
Citation204 A.2d 71,236 Md. 399
PartiesEdwin S. STATER et ux. v. William B. DULANY, Assignee.
CourtMaryland Court of Appeals

E. O. Weant, Jr., Westminster (G. Edwin Robertson and Brown & Weant, Westminster, on the brief), for appellants.

William B. Dulany, Westminster (James W. Davis, Westminster, on the brief), for appellee.

Before HENDERSON, C. J., and HAMMOND, PRESCOTT, HORNEY, MARBURY, and SYBERT, JJ.

SYBERT, Judge.

This is an appeal from an order of the Circuit Court for Carroll County which dismissed a petition by mortgagors to enjoin a foreclosure sale of their real property. The principal question presented is the validity of the mortgage given to the appellee's assignor, the Ridge Pike Bond and Mortgage Corporation, by the appellants, Edwin S. Stater and H. Jacquelyn Stater, his wife.

In 1962 the Staters owned an unimproved lot of land in Carroll County, Maryland, and, desiring to erect a house thereon, they visited a sample home of the Ridge Pike Lumber Company (Lumber Company), in Thurmont, Maryland, in October or November, 1962. The Lumber Company, which has its home office in Conshohocken, Pennsylvania, sells precut or prefabricated homes. After several meetings between the Staters and Lee R. Saylor, of Thurmont, the local sales representative for the Lumber Company, the Staters decided in November or early December, 1962, to purchase a particular style precut house, completed an application for credit, and gave Saylor the deed to their land to aid in the credit investigation. Soon thereafter the Staters were notified that their credit application had been approved. They then executed an installment contract, dated December 12, 1962, covering the purchase, Saylor representing the Lumber Company in the transaction. The cash purchase price stated in the contract was $10,700.00, which included the cost of the precut lumber and building materials, as well as the sum of $1,373.00 which was to be placed by the Lumber Company in an escrow account for disbursement to contractors (apparently to be procured by the Staters) as they completed preliminary work necessary for the erection of the dwelling. Under the agreement, the Lumber Company was to erect the outside or 'shell' of the home and the Staters were to finish the inside on their own. However, the contract provided for the payment of 156 monthly installments of $122.08 each, to pay off the 'time balance' price of $19,044.48. The appellants paid $100.00 down when they executed the contract, which was credited therein. The Staters also executed a mortgage on their land to the Ridge Pike Bond and Mortgage Corporation (mortgagee), owner of the Lumber Company. The mortgage was acknowledged by the Staters on December 15, 1962, although it is dated December 10, 1962. The affidavit as to consideration, made by the president of the mortgagee, is dated December 19, 1962, and the mortgage was recorded January 11, 1963. It provided for the payment of $19,044.48 in 156 monthly installments of $122.08 each.

The credit officer of the Lumber Company testified, without contradiction, that the escrow account of $1,373.00 was established 'at the time the contracts [the installment contract and the mortgage] were signed and sent back to the office.' Four checks were drawn on the account to pay contractors for such work as the digging and construction of a foundation, construction of a sewer system, etc. The Staters admitted that they sent the contractors' bills to the Lumber Company and that it forwarded covering checks to the Staters or the contractors.

The precut house was delivered to the Staters in two 'packages' at two different times. The first package contained materials for the outside and the second for the inside of the house. The appellants, on February 5, 1963, signed a certificate of completion for Saylor, indicating that the 'shell' was completed. In July 1963 the Staters moved into the house.

Under the terms of the mortgage, payments were to commence 60 days after its execution. However, it is admitted by the Staters that they have made no payments to the mortgagee. On September 18, 1963, the mortgagee made a short assignment of the mortgage to the appellee, an attorney, for the purpose of foreclosure. On October 16, 1963, the appellee docketed suit to foreclose the mortgage, filing with it a statement of mortgage debt claiming the principal sum of $10,700.00 plus simple interest from date of $267.50. Public sale of the property was scheduled for November 14, 1963. Appellants, on October 23, 1963, filed a petition to enjoin the sale, alleging that the mortgage was one to secure future advances, that it did not comply with Code (1957), Art. 66, sec. 2, and was therefore not a lien on the property. The appellants further alleged that they were fraudulently induced to execute the mortgage. The lower court issued a show cause order, appellee answered, testimony was taken, and the petition was dismissed on November 12, the court holding that the mortgage was not one for future advances and that no fraud had been shown. The property brought $12,000.00 at public sale on November 14, 1963, and a report of sale was filed. An order nisi directing ratification unless cause to the contrary be shown on or before December 23, 1963, was published. On December 9, 1963, the appellants appealed to this Court from the order dismissing their injunction petition, and on December 19, 1963, they filed exceptions to the sale, but no hearing was held thereon pending this appeal.

I

The appellants contend that the mortgage is one to secure future advances (namely, the building materials 1) and that since it does not state on its face the amounts of the future advances and the times when they were to be made, it does not comply with Code (1957), Art. 66, sec. 2, and is therefore not valid as a lien against the property. On the other hand, the appellee contends that no future advances were to be made under the mortgage since, at the time of its execution, the mortgagee assumed the obligation of the mortgagors to the Lumber Company under the installment contract, and placed the $1,373.00 in escrow for disbursement to contractors, and that these constituted present consideration for the mortgage.

We agree with the appellee in so far as the setting up of the escrow account is concerned. The evidence shows that the account was established for the benefit of the mortgagors at the time of the delivery of the mortgage, and that it subsequently was disbursed to contractors upon the submission of their bills by the mortgagors. In comparable cases we have held that such action by the mortgagee amounted to a present...

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6 cases
  • Fisher v. Federal National Mortgage Association
    • United States
    • U.S. District Court — District of Maryland
    • 22 Junio 1973
    ...will retain its jurisdiction in order to settle all questions which might arise out of the subject in controversy. Stater v. Dulany, 236 Md. 399, 404, 204 A. 2d 71 (1964); Ledford Const. Co. v. Smith, 231 Md. 596, 600, 191 A.2d 587 Nor have the Maryland courts hesitated to consider constitu......
  • Billingsley v. Lawson
    • United States
    • Court of Special Appeals of Maryland
    • 18 Octubre 1979
    ...it will retain its jurisdiction in order to settle all questions which might arise out of the subject in controversy. Stater v. Dulany, 236 Md. 399, 404, 204 A.2d 71 (1964); Ledford Const. Co. v. Smith, 231 Md. 596, 600, 191 A.2d 587 (1963). (footnotes omitted.) (Id. at In the present case,......
  • Vermilya-Brown Co. v. Dale Dallas, Inc.
    • United States
    • Maryland Court of Appeals
    • 8 Noviembre 1967
    ...Judge Bowie retained it for the purpose of rendering a money decree arising out of the issues litigated before him. Stater v. Dulany, 236 Md. 399, 204 A.2d 71 (1964); Ledford Const. Co. v. Smith, 231 Md. 596, 191 A.2d 587 (1963); McKeever v. Washington Heights Realty Corp., 183 Md. 216, 37 ......
  • Stirn v. Segall
    • United States
    • Maryland Court of Appeals
    • 5 Noviembre 1968
    ...a money decree arising out of the issues litigated. Vermilya-Brown v. Dale Dallas, Inc., 248 Md. 7, 234 A.2d 569; Stater v. Dulany, Assignee, 236 Md. 399, 204 A.2d 71. The lower court had jurisdiction to award the return of the deposit Appellant's fourth contention is that the imposition of......
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