Boyd v. Goldstein

Prescott, J., delivered the opinion of the Court. The appellants are displeased by the action below of the ²⁵⁷ chancellor in refusing to grant them a decree in personam against the appellees for a deficiency shown after a sale of real estate under the power of sale contained in a deed of trust, because of default in the payment of a promissory note secured thereunder. The proceedings were instituted in the Circuit Court for Calvert County, and the motion for a decree in personam was requested under the provisions of Code (1957), Article 66, Section 15. 1 This section refers explicitly to “mortgaged” property; however, under the previous decisions of this Court and Maryland Rules 1391 b 1 and 1391 f 2, it seems apparent a deficiency decree in personam would be appropriate under the foreclosure of a deed of trust such as the one here involved; provided the substantive rights of the parties permit such a decree. Section 15 states that, if upon a sale of the whole mortgaged property the net proceeds of the sale are insufficient to pay the entire mortgage debt and accrued interest, the equity court may (after notice, etc.) enter a decree in personam against the mortgagor or other party to the suit, who is liable for the payment thereof, for the amount of the deficiency; “provided the mortgagee, or his legal or equitable assignee would be entitled to maintain an action at law upon the covenants contained in the mortgage for said residue of said mortgage debt * * (Emphasis supplied.) It has been held the jurisdiction here conferred is wholly statutory and in derogation of the common law; therefore, the conditions precedent to its being put into operation must be fully met.

Gross v. Bldg. & Loan Assn., 157 Md. 401, 406 , 146 A. 229 ; Kushnick v. Lake Drive Bldg. & Loan Assn., 153 Md. 638, 642 , 139 A. 446 ; Austraw v. Dietz, 185 Md. 245, 251 , 44 A. 2d 437 . But, as the statute is remedial in nature, it should be interpreted so as to accomplish the object for which it was designed when possible. Austraw v. Dietz, supra. ²⁵⁸ This Court has also held that, when a deficiency decree is requested under the statute (Section 15), the parties are in the same relative position as litigants at law, and, for the party who requests the deficiency decree to prevail, he must show all of the requirements of a successful plaintiff at law, with his cause of action based upon the covenants in the mortgage. County Trust Co. v. Harrington, 168 Md. 101, 104 , 176 A. 639 ; Kirsner v. Cohen, 171 Md. 687, 690 , 190 A. 520 .

The appellants seem to concede this last proposition, but earnestly press upon us that, under the provisions of the note and deed of trust under present consideration and our previous decisions, the deed of trust, together with the note, did “contain a covenant to repay” such as would comply with said Section 15. They state “that there are innumerable cases that have come before this Court wherein mortgages drawn in the same manner as the one in question were held to contain a covenant to repay.” It will be unnecessary to set forth the terms of the trust and the note in detail. It will suffice to say that in the trust deed the appellees acknowledged themselves indebted unto one Perry G. Bowen, Jr., in the amount of $18,700, and that they had executed and delivered therefor a promissory note bearing interest. The note, in relevant part, simply promised to pay to the order of Perry G. Bowen, Jr., the above sum one year after date, and stated it was secured by the deed of trust.

There was no specific covenant in the deed of trust to repay the indebtedness secured thereby. The only specific covenants made by the grantors therein were to keep the improvements insured, to pay all taxes 2 and assessments, and to warrant specially the title to land conveyed. The appellants, in support of their claim that there are “innumerable” cases in this Court that sustain their theory that ²⁵⁹ when a trust and note have been given in the form mentioned above, the trust should be considered as containing a covenant to repay the