Swartz v. Chickering

• Decision Date: 21 April 1882
• Citation: 58 Md. 290
• Parties: JOHN W. SWARTZ v. MARY E. CHICKERING.
• Court: Maryland Court of Appeals

58 Md. 290

JOHN W. SWARTZ v. MARY E. CHICKERING.

Court of Appeals of Maryland

April 21, 1882

APPEAL from the Circuit Court of Baltimore City.

The case is stated in the opinion of the Court.

The cause was argued before BARTOL, C.J., GRASON, MILLER ROBINSON, IRVING and RITCHIE, J.

Samuel Snowden, for the appellant.

J Upshur Dennis, and William A. Fisher, for the appellee.

BARTOL C.J., delivered the opinion of the Court.

On the 30th day of June 1875, George Tyler executed a mortgage conveying to Eldridge C. Chickering a lot of ground and improvements on Hanover Street, in the City of Baltimore, for the purpose of securing the payment of the sum of $1800. The mortgage debt having been reduced to $1080, E. C. Chickering the mortgagee, executed and delivered to Tyler a release of the mortgage of June 30th 1875, and at the same time a new mortgage was executed by Tyler of the same property, to secure to Chickering the sum of $1080. The release and new mortgage were executed about 10 o'clock in the forenoon of November 3rd 1876.

The release, which recited that the mortgage of June 30th 1875, had been fully paid and satisfied, but contained no reference to the new mortgage, was delivered to Tyler, who thereupon, on the same day, obtained from Richard H. Snowden a loan of $1500, and for the purpose of securing its repayment, executed and delivered to Snowden a mortgage of the same property. The release of Chickering, and the mortgage to Snowden were recorded at 1 o'clock P. M. on the 3 rd day of November 1876, and the new mortgage to Chickering was recorded at 15 minutes after 3 o'clock P. M. of the same day.

The Snowden mortgage having been assigned to Swartz, the appellant, and proceedings having been instituted, in the name of Snowden for his use, for the purpose of obtaining a decree for the sale of the mortgaged property, a decree for sale was entered on the 27th day of February 1878, and the property was advertised for sale by the trustee. Pending the advertisement, the appellee, to whom the mortgage of E. C. Chickering had been assigned, filed her bill of complaint, alleging, among other things, that at the time the loan was made to Tyler by Snowden, the latter had notice that $1080 of the mortgage debt due Chickering remained unpaid. The bill alleges that "your oratrix hath no reason to believe, and does not believe, that said Snowden intended to record his mortgage, so as to give it apparent priority to that of said Chickering, but believes that said Snowden, when he recorded his mortgage and said release, supposed that the mortgage of said Chickering had already been recorded. For she expressly charges that at the time said Snowden loaned said money to Tyler, and received the mortgage from him to secure the same, said Snowden was fully informed of the fact that the mortgage of $1080, had been executed to said Chickering, and that the mortgage to him, the said Snowden was a second mortgage on said property, and accepted the same, knowing that it was subject to the mortgage held by Chickering." The bill further charges "that neither Eldridge C. Chickering, nor the oratrix had any notice of the mistake that had occurred, and of the fact that the mortgage of Snowden was recorded before that of Chickering, until recently, when they saw a notice that said property was offered for sale under a decree to foreclose the mortgage of Snowden, when upon application to the trustee, by whom the property was so offered for sale, your oratrix learned that it was claimed that the mortgage to said Snowden was in fact prior in lien to that of your oratrix, and that it was intended to insist on the priority of said lien."

The bill prays for an injunction to restrain the sale, and that the mortgage of the complainant may be declared and established as a first lien on the property.

Snowden, the mortgagee, having died before the bill was filed, his administratrix was made a party defendant, and Swartz, the appellant, and Samuel Snowden, the trustee, were also made parties defendants.

Answers were filed, and by agreement the cases were consolidated, the property was sold by the trustee, the sale ratified, and the proceeds of sale brought into Court, which being greatly insufficient to pay both mortgages, the contest as to the right of priority arose upon the distribution of the fund.

Proof was taken before the auditor, the cause set down for hearing, and the Circuit Court determined that the mortgage to Chickering was entitled to priority over the mortgage to Snowden. In accordance with this opinion, the auditor stated an account, to which the appellant filed exceptions which were overruled, and from the order ratifying the account, the present appeal was taken.

Sec. 16, Art. 24 of the Code, expressly provides that the mortgage which shall be first recorded according to law, shall be preferred, if made bona fide and upon good and valuable consideration.

To defeat the priority secured to Snowden's mortgage by the statute, the effort on the part of the appellee was to prove that at the time Snowden accepted the mortgage, he had knowledge of the existence of the mortgage for $1080 which had been given to Chickering a few hours before. For this purpose two witnesses were examined, Tyler, the mortgagor, and Chickering, the mortgagee.

The testimony of Chickering with regard to the statements made to him by Tyler at the time of the transaction, was excepted to as inadmissible and was properly ruled out by the Judge of the Circuit Court. They were clearly res inter alios.

No argument is required to show that the rights of the appellant cannot be impaired, or in any manner affected by statements made by Tyler to Chickering out of the presence of himself and of Snowden the mortgagee. The question of fact, as to the alleged notice to Snowden of the existence of Chickering's mortgage, rests entirely upon the testimony of Tyler. His testimony was excepted to by the appellant, on the ground that he was an incompetent witness, for the reason that he was a party to the contract

of mortgage, and Snowden, the other party to the contract being dead, he is not permitted to testify in relation thereto under the Evidence Acts of 1864, ch. 109, 1868, ch. 116, and 1876, ch. 222. This objection to the competency of the witness was overruled by the Judge of the Circuit Court, and we think very properly.

In the controversy between the mortgagees as to their right of priority, the witness was not a party, and was in no manner interested; being a competent witness at the common law, the Evidence Acts referred to have no application. Their provisions apply only where the witness would be incompetent by the rules of the common law either because of being a party to the suit, or by reason of interest in the subject-matter.

The witness was called for the appellee and was twice examined. In his first examination, on the 24th day of June 1878, he failed to support the allegations of the bill with regard to any notice or knowledge, on the part of Snowden, of the existence of Chickering's mortgage, at the time when the mortgage to Snowden was executed and recorded. This will appear from a brief reference to his testimony.

The witness stated (4th Interrogatory,) that when he applied to Mr. Snowden for a loan of $1500, he (Snowden) said "that he could not loan any money on the property unless the first mortgage was taken up." After an interval of one or two weeks he called again on Snowden and obtained the money, and being asked (13 th Interrogatory) to state all that then occurred, answered "I showed Mr. Snowden the...