Welsh v. Kuntz
| Decision Date | 19 July 1950 |
| Docket Number | 210. |
| Citation | 75 A.2d 343,196 Md. 86 |
| Parties | WELSH v. KUNTZ et al. |
| Court | Maryland Court of Appeals |
T. Hammond Welsh, Jr., Washington, D. C. (Welsh and Dyer Washington, D. C., and Paul L. Herring, Hyattsville, on the brief), for appellant.
Robert W Beall, Bethesda, for appellees.
Before MARBURY, C J., and DELAPLAINE, COLLINS, GRASON and HENDERSON., JJ.
Section 2 of Article 66, Code Supp. 1947, provides that, except as therein provided, no mortgage to secure future loans or advances shall be valid, unless the amounts thereof and the times when they are to be made shall be specifically stated in the mortgage. Section 3 of Article 66, Code 1939, provides that in Baltimore and Prince-George's County no mortgage shall be a lien for any other sum of money than shall be specified therein to be secured thereby at the time of executing the same; but it does not contain the requirement that a mortgage to secure future loans or advances shall state the times when the future loans or advances are to be made. The question presented for our decision is whether Section 2 applies to Baltimore and Prince-George's Counties.
The record in this case shows that Joseph Kuntz, Sr., and wife on May 19, 1948 executed a mortgage on a parcel of land in North Englewood to J. Victor Dickey and wife as security on a construction loan. While the mortgage recites that the mortgagors are indebted to the mortgagees 'in the full and just sum of $7,500' as evidenced by a note for that amount, actually only part of that amount was advanced at the time the mortgage was executed, and the mortgagees promised to make future advances at certain stages of progress in the construction of the building. Upon default by the mortgagors the mortgagees assigned the mortgage to T. Hammond Welsh, Jr., for the purpose of foreclosure. The assignee thereupon sold the property at auction on August 8, 1949, for $6,750 and reported the sale to the Court. Eisinger Mill and Lumber Company, Inc., grantee in two deeds of trust executed on the property as security for bills in the amount of $5,000, and Roger W. Eisinger, Sr., and Roger W. Eisinger, Jr., trustees named in the deeds, filed exceptions to the ratification of the sale.
The assignee and the exceptants stipulated that if Section 2 of the Maryland Mortgage Law applies to Prince George's County, the mortgage is void; but if Section 2 does not apply to Prince George's County, then the mortgage is valid and the foreclosure sale should be ratified. The chancellor held that Section 2 applies, and entered a decree sustaining the exceptions and declaring the mortgage and the sale void. From that decree the assignee appealed.
The chancellor relied on White Eagle Polish American Building & Loan Ass'n v. Canton Lumber Co., 168 Md. 199, 178 A. 214, which was an appeal from the Circuit Court for Baltimore County. The Circuit Court held the mortgage void on the ground that it was a mortgage to secure future advances and it failed to comply with Section 2 of the Maryland Mortgage Law. But the Court of Appeals, finding that the mortgage recited a consideration of $30,000, and that the mortgagee gave the mortgagor credit for the full amount at the time of the execution of the mortgage, reversed the decree on the ground that the mortgage did not secure any future loans or advances. In the instant case the chancellor observed that in the Baltimore County case the building association made three contentions on appeal: (1) that the mortgage was not given to secure any future loans or advances, (2) that it was recorded in Baltimore County, and (3) that it was given to a building association. The chancellor surmised that if the Court of Appeals believed Section 2 did not apply to Baltimore County, it would have said so, for that ruling also would have led to a reversal. But the fact that this Court decides to reverse on one ground does not imply that the other points were determined.
The cardinal rule of statutory construction is that statutes should always be construed to effectuate the intention of the Legislature. The manifest intention will always prevail over the rules of grammatical construction. On the other hand, a court is generally not at liberty to surmise a legislative intention contrary to the plain language of the statute, or to indulge in the license of inserting or omitting words with the view of making the statute express an intention which is not evidenced in the original form. State Tax Commission v. Potomac Electric Power Co., 182 Md. 111, 115, 116, 32 A.2d 382; Smith v. Higinbothom, 187 Md. 115, 125, 126, 48 A.2d 754. Where there is doubt as to the meaning of a statute, the court will resort to the history of the enactment in search of the legislative intention. The fact that two acts, even though passed at different sessions of the Legislature, are re-enacted in a subsequent revision of the statutes does not preclude resort to the history of the legislation and the use of judicial construction to determine the legislative intention, where that intention is not clearly disclosed in the revision. Chicago, R. I. & P. R. Co. v. Nichols, 130 Kan. 509, 287 P. 262.
In the absence of statute, a mortgage given as security for future advances is valid when the advances are a part of the original agreement, and in such a case the lien will cover all future advances in preference to any claim of a junior encumbrancer with notice of the agreement. The common law has sanctioned mortgages to secure future advances as a useful method of providing for continuous dealings and for security for obligations to accrue at future times. Goertz v. Backman, Md., 74 A.2d 3. In January, 1826, the Legislature passed the first statute on the subject, entitled 'An act to limit the operation and effect of mortgages.' It provided that no mortgage executed after August 1, 1826, shall operate as a lien for 'any other or different principal sum or sums of money than the principal sum or sums that shall appear on the face of such mortgage, and be specified and recited therein, and particularly mentioned and expressed to be secured thereby, at the time of executing the same.' Laws of 1825, ch. 50.
When the Maryland Constitutional Convention met in 1851, the Maryland statutes embracing all legislation from the time of the settlement of the Colony were scattered through more than forty volumes, and it was difficult to find the law because of the multitude of repeals and re-enactments. The Convention accordingly commanded the Legislature to appoint two commissioners to revise and codify the laws of the State. Md. Constitution of 1851, art. 3, sec. 17. In compliance with the mandate of the Constitution, the Legislature in 1853 appointed Otho Scott and Hiram McCullough as codifers, and in 1860 adopted their Code and repealed all previous legislation of the State. Thus the 1860 Code was adopted as a substitute for all the public general laws then in force. La Fontaine v. Wilson, to Use of Ugast, 185 Md. 673, 680, 45 A.2d 729, 732, 162 A.L.R. 1218. In that Code the Act passed in 1826 was codified as Section 2 of Article 64, entitled 'Mortgages.'
Meanwhile in 1859 the Court of Appeals held in Wilson v. Russell, 13 Md. 494, 71 Am.Dec. 645, that it was still unnecessary to state in a mortgage to secure future advances the length of time during which the advances were to be made. In 1872 the Legislature made the law more stringent by re-enacting Section 2 with the following additional provisions: 'and no mortgage, or deed in the nature of a mortgage, shall be a lien or charge for any sum or sums of money to be loaned or advanced after the same is executed, except from the time said loan or advance shall be actually made, and no mortgage to secure such future loans or advances, shall be valid unless the amount or amounts of the same, and the times when they are to be made shall be specifically stated in said mortgages, * * * provided, however, that Anne Arundel, Baltimore, St. Mary's and Prince George's counties be excepted from the said amendment and repeal of section two of article sixty-four, and that the said section of the said article still be and remain in force in the said counties.' Laws of 1872, ch. 213.
The next step in the history of this legislation was taken by the Legislature in 1878, when it legalized the Revised Code of Public General Laws of Maryland compiled by Lewis Mayer, Louis C. Fischer and E. J. D. Cross, authorizing it to be 'deemed and taken in the Courts of this State as evidence of the articles and sections of the present Code, and the subsequent acts therein codified.' Laws of 1878, ch. 196. For some unexplained reason these three codifiers split the Act of 1872 into two parts, and numbered them Sections 43 and 44 in Article 66, entitled 'Sale, Lease, or Partition of Property in Equity.'
The statute, now separated for the first time into two sections in the 1878 Code, appeared as follows:
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