Bond v. Gray Improvement Co.

Briscoe, J., delivered the opinion of the Court. The questions in this case arise upon exceptions to the sale of certain mortgage premises, situated in Baltimore City,- under a decree of Court. The appellee, the Gray Improvement Company of Baltimore City, is a corporation duly incorporated under the laws of the State and on the 8th of April, 1897, executed a mortgage upon ten acres of unimproved land, situate near Druid Hill Park, Baltimore, to secure the payment of the sum of fifty-four thousand dollars, authorized by a resolution of its board of directors to be borrowed from Letitia E. Hanna and others, mortgagees. This mortgage being in default,, a decree for the sale of the property was passed on the 23rd of May, 1904, by the Circuit Court of Baltimore City, and Mr. Richard Bernard, a member of the Baltimore Bar, was appointed trustee to make the sale.

The property was advertised for sale in accordance with the terms of the decree, and was sold on the 20th day of June, 1904, to John Waters of Baltimore County, for the siim of seventy-six thousand and five hundred dollars. ⁴³² It appears from the report of the trustee that “the lot of ground is composed of parts of three tracts, which are together embraced in one description,” and contains ten acres of land more or less. The trustee first offered the property in four separate parcels, but the amount aggregating only twenty-four thousand five hundred dollars from a sale in that manner, it was after-wards offered as an entirety and thus sold to the purchaser. Subsequently, on the 16th of July, 1904, the appellants, who are minority stockholders of the mortgagor corporation, filed exceptions to the ratification of the sale, asking that the sale as thus made be vacated and set aside. The grounds relied upon and briefly stated, are substantially these: 1st.

That the property was insufficiently advertised; 2nd. That the.trustee improperly advertised the property to be sold “as an entirety;” 3rd. That the price was grossly inadequate; 4th. That the property should'have been sold as building lots; 5 th.

That the trustee sold more of said property than was absolutely necessary for the satisfaction of the mortgage debt and proper expenses of the sale. On the 27th of January, 1903, the appellees, the mortgagors, filed a motion to overrule and dismiss the exceptions to the sale, because the exceptants are minority stockholders, owning only-one-eighth of the capital stock of the corporation, and have no standing to attack the sale as made by the trustee. It further appears, that on the 28th of January the appellants, two of the stockholders of the mortgagor company petitioned the Court to intervene as party defendants and maintain their exceptions, averring that the president of the company, had refused to take such action as would protect the interests of the stockholders. The appellees, mortgagees, demurred to this petition and the mortgagor company filed an answer thereto.

The answer states, “that all the stockholders except the appellants believe that the trustee, who besides representing the mortgagee rep ⁴³³ resents about three-eighths of the capital stock of the company, did all in his power to realize the best price and that his conduct met the approval of seven-eighths of the stockholders of the company; that the petitioners are the holders of the