Albemarle Building & Loan Ass'n v. Treuchel

Pattison, J., delivered the opinion of the Court. On September 4th, 1923, Herman J. Treuchel, the appellee, purchased from the Lohmuller Building Company the leasehold property known as 204 Cedar Street, Westport (now known as 2204 Cedley Street) for $3,200, subject to a ground rent of sixty dollars. At the time of the purchase, Treuchel paid twenty-five dollars in cash, and was to pay $475 more on or before September 30th, 1923. The balance was to be paid in weekly installments of eight dollars.

He made payments on September 7th, 1923, and on January 7th, 1924; and on January 14th, 1924, he paid the balance of the $500 which was to be paid on or before September 30th, 1923. On December 24th, 1923, the key of the house was delivered to Treuchel, and he immediately took control and possession of the property. He placed a sign on the front of the house reading: “For Bent. Apply 202 Cedar Street,” and turned the key over to Charles P. Fuchs, who lived at the last-named address, 202 Cedar Street. ⁶³⁸ Three days thereafter, on December 27th, John W. Lohmuller, the president and, with his brother, owner of the Lohrnuller Building Company, applied to the Albemarle Building & Loan Association, the appellants, for a loan of $2,000 on the property 204 Cedar'Street.

On January 18th, 1924, twenty-five days after possession of the property had been given to Treuchel under the sale to him, John "W. Lohmuller and the Hamilton Park Company of Baltimore City, a holding company for Lohmuller Building Company, and of which company Lohmuller was also president and, with his brother, owner, executed to the Albemarle Building & Loan Association the mortgage applied for. This mortgage was duly recorded among the land records of Baltimore City on January 24th, 1924. After the purchase of the property, Treuchel continued to make his payments of eight dollars per week until in 1927, at which time he had practically paid the Lohmuller Building Company the entire purchase money of $3,200 for the property. An examination of the title made by Treuchel at that time disclosed that on January 2nd, 1924, the Singer Construction Company had executed a ninety-nine year lease unto James K. Cadden for the property in question.

The record title remained in Cadden until July 11th, 1924, when he conveyed it to the Hamilton Park Company, about five months after the execution and recording of the mortgage by that company to the Albemarle Building & Loan Association. On July 23rd, 1927, the Hamilton Park Company conveyed the leasehold interest to Treuchel, which deed of assignment was duly recorded in the land records of Baltimore City on the 25th day of July, 1927. On September 5th, 1931, the Hamilton Park Company, it sefems, defaulted in their payments under the terms of the mortgage to the Albemarle' Building & Loan Association; and on that date the court by its decree ordered a sale of the mortgaged property and appointed Vincent L. Palmisano trustee to make the sale. In pursuance of the decree, the trustee advertised the property for sale.

Whereupon the appellee, Treuchel, filed his bill in ⁶³⁹ the Circuit Court of Baltimore City against the Albemarle Building & Loan Association, the Hamilton Park Company of Baltimore City, and Vincent L. Palmisano', trustee, alleging therein the facts hereinbefore stated, and asked that the trustee be restrained from proceeding with the further advertisement and sale of the property, and that it be declared by the court “that said mortgage is not a lien on the said property.” A preliminary injunction was granted as prayed. The defendants answered the bill, and evidence was thereafter taken, upon which the court passed its decree permanently restraining the trustee from proceeding further with the sale of the property, and declaring the mortgage to be utterly null and void to all intents and purposes, in so far as the same interfered with or in any manner affected the right, title, or interest of the complainant in and to the property. Prom that order the defendants have appealed to this court. It is not shown from the evidence in this case that any written contract of sale was entered into* by and between the vendor and Treuchel for the sale of the property.

The appellee, at the time of the purchase in September, 1923, paid in cash twenty-five dollars, and later made other payments upon the amount he was to pay on or before September 30th, 1923. When each of the payments was made, Treuchel received a receipt therefor from the vendor. These receipts were the only memoranda in writing held by the appellee in connection with the purchase of the property, other than the written entries in a book of the weekly payments made by him in accordance with the oral agreement of purchase. The appellee’s claim to the property free and clear of the recorded mortgage, executed by the vendor to the appellant subsequently to the purchase by Treuchel, is founded upon the latter’s possession of the property taken by virtue of the