Busey v. Perkins

Sloan, J., delivered the opinion of the court. This appeal is from an order overruling exceptions to the ratification of a mortgagee’s sale. The mortgage is found in the record in Busey v. Perkins, 168 Md. 19 , 176 A. 474 . By mortgage dated June 1st, 1929, Ida Grace Parrish and her sister, Mary Laura Busey, executed a mortgage to Clarence W. Perkins, trustee, to secure the payment of $87,027, representing notes on which one or the other, or both, were makers or indorsers, held by nine banks and four individuals, varying in amount from $715 to $29,506.54; all of the debts having been incurred long prior to the mortgage.

Mrs. Busey’s part of the obligations was relatively small, but she made herself jointly liable with her sister on the obligations of both, and thus she became hopelessly involved, and sacrificed her half interest in valuable property inherited from her father. The mortgage was a first lien on improved property situate at the intersection of the south side of Center Street and the west side of St. Paul Street in Baltimore, and a second lien on five large unimproved parcels and tracts of land situate in Baltimore County. The mortgage on the Baltimore City property, pending the appeal to the October term, 1934, of this court, was foreclosed, and the property sold to the Royal Realty Corporation as a whole for $10,000. Code, art. 5, sec. 33.

It had been advertised to be offered as a whole and in three parcels, and, the amount bid for it as a whole exceeding the aggregate of the bids in parcels by $1,250, the property was sold as a whole and so reported. Among those for whom the mortgage was given were the Union Trust Company, the interest of which was $29,506.54, and the Baltimore Trust Company, the inter ⁴⁵⁵ est of which was $18,733.52. The Royal Realty Corporation’s bid was for the joint account of the Union Trust Company and the Baltimore Trust Company, according to their respective interests. The mortgagors, appellants, filed exceptions to the ratification of the sale on several grounds, but only two were argued on this appeal: (1) That there was a combination, formed during the sale between the representatives of the two trust companies to buy jointly, which invalidated the sale; and (2) that the advertisement of sale did not adequately and sufficiently describe the property.

The evidence is that the property as advertised was first offered as a whole and bid up to $10,000 by Thomas B. McAdams, president of the Union Trust Company, for the Royal Realty Company. The bid for the whole property was reserved by the auctioneer, and the property in three parcels then offered separately and was bid to $3,500 for Nos. 526, 528, and 530 St. Paul Street; $4,250 for the parcel at the corner of Center and St. Paul Streets; and $1,000 for No. 23 Center Street, respectively. The whole lot was made up of five parcels, of which three were subject to ground rents totaling $80 a year, and two were in fee. The evidence respecting the combination charged is that the bidding on the property as a whole was begun by Mr. McAdams for the Union Trust Company at $4,000.

A bid was then made by Henry B. Thomas, Jr., a vice president of the Baltimore Trust Company, who bid $4,500. It was then arranged between Mr. McAdams and Mr. Thomas that the former should bid on the property for the joint account of the two trust companies, and Mr. McAdams carried the bidding to $10,000, which was the highest bid made. There is no contention of any fraudulent purpose in the alleged combination or understanding of Messrs. McAdams and Thomas that the bidding be continued by one of them, nor is there any evidence from which it can be inferred that this agreement prevented anyone else from bidding on the property.

If either of the two bidders ⁴⁵⁶ had been a stranger or outsider, and had been persuaded to desist from bidding, it could not have been said that the sale was fairly made, because at a public sale competition must be free, open, and unrestrained and above suspicion. If the agreement had been made before the sale, that one of the mortgagees should bid on the property for two or more of them in order to protect their interests, there could have been no criticism of such an arrangement. It appears clearly from the