Tolzman v. Gwynn, 61
| Decision Date | 20 November 1972 |
| Docket Number | No. 61,61 |
| Citation | 267 Md. 96,296 A.2d 594 |
| Parties | Alfred H. TOLZMAN et ux. v. David H. GWYNN, Attorney Named In Mortgage. |
| Court | Maryland Court of Appeals |
James R. Bucher, Upper Marlboro (Sasscer, Clagett, Channing & Bucher, Upper Marlboro, on brief), for appellants.
David H. Gwynn, Upper Marlboro, for appellee.
Argued before MURPHY, C. J., and McWILLIAMS, SINGLEY, SMITH, DIGGES, and LEVINE, JJ.
When Rudolf Walti and Marianne Walti, his wife (the Waltis) defaulted in their payment of a second mortgage for $70,000.00 given E. Lucille McCauley (Mrs. McCauley), foreclosure proceedings were instituted in the Circuit Court for Prince George's County. At the foreclosure sale, the property was purchased by Mrs. McCauley for $54,000.00, subject, however, to a prior indebtedness of $53,430.87 secured by a first deed of trust on the property, the payment of which had been guaranteed by Alfred H. Tolzman and Mildred Tolzman, his wife (the Tolzmans). 1
The Tolzmans excepted to the Account and Report filed by the auditor, contending that the net proceeds of the $54,000.00 sale price should have been applied in reduction of the unpaid balance of the loan secured by the first trust. From an order overruling their exceptions, the Tolzmans have appealed.
The foreclosure sale had been advertised for three successive weeks commencing 28 October 1971. The advertisement clearly stipulated that the
At time of sale, the balance due on the note secured by the first trust was $53,430.87; the balance due on the second mortgage debt was $65,095.84, plus interest. Immediately following the sale, the whole affair became clouded by confusion, perhaps because Mrs. McCauley held both the second mortgage and with her son, James Madison McCauley, as joint tenants, the debt secured by the first trust or perhaps because her bid of $54,000.00 so closely approximated the amount of $53,430.87 open and unpaid on the first trust.
What next happened was that the report of sale, filed by David H. Gwynn, the attorney named in the second mortgage, contained an unhappily ambiguous paragraph:
'He (Gwynn) offered the aforesaid property, subject to the balance due on the first trust of $53,430.87, to the highest bidder at public auction and sold the same to E. Lucille McCauley at and for the total sum of Fifty-four thousand ($54,000.00) Dollars, including (sic) the balance owed on the first trust, she being at that figure the highest bidder.'
The order nisi did nothing to clarify the uncertainty:
'The report (of sale) states the amount of sale to be $54,000.00 inclusive (sic) of the balance owed on the first trust of $53,430.87.'
At argument before us, Mr. Gwynn conceded that the amount of cash advanced by Mrs. McCauley was $569.13, which he computed as the difference between the bid of $54,000.00 and, for some unaccountable reason, the balance of $53,430.87 due under the first trust. Had Mr. Gwynn remembered that he was foreclosing the second mortgage, and that Mrs. McCauley was buying subject to the first trust, a bid of $569.13, however arrived at, would have carried the day, there being no other bidders. Another benefit would have accrued to his client: in effect, she would have bought in the property for $54,000.00, rather than for $107,430.87, the sum of her bid ($54,000.00) and of the senior debt ($53,430.87).
In December 1971, the sale was ratified and the case was referred to a court auditor for the statement of an account. In compliance with Rule 595c of the Seventh Judicial Circuit, Mr. Gwynn submitted a draft of an account, in suggested form. There, he deducted from the sale price of $54,000.00, the balance of $53,430.87 due on the first trust, to which was added the expenses of the sale, including an attorney's fee of $100.00, and trustee's commissions of $2,810.00, with the consequence that a deficiency of $4,366.22 was developed.
The auditor restated the account, properly applying the $54,000.00 sale proceeds in reduction of the $65,095.84 balance due on the second...
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...a third lien subject to superior liens, so that the only lien extinguished was that of the new mortgage. Cf. Tolzman v. Gwynn, 267 Md. 96, 99-100, 296 A.2d 594, 596 (1972); Baltimore Fed. Sav. & Loan Ass'n v. Eareckson, 221 Md. 527, 529-30, 158 A.2d 121, 123-24 (1960); Gordon, § 10.01, at 3......
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