Butler v. Daum

Horney, J., delivered the opinion of the Court. In this proceeding involving the foreclosure of a mortgage deed of trust for failure to pay the balance due on a promissory note secured thereby, the questions on appeal relate to (i) the manner of giving notice of foreclosure, (ii) the inadequacy of the purchase price, (iii) the amount of indebtedness in default, and (iv) the right to redeem the mortgaged property. The property in question is a one and one-half acre tract of land improved by a modest dwelling located off Odell Road in Prince George’s County formerly owned by Cal H. Crosson ⁴⁵⁰ and Lizzie Crosson, his wife. When, on August 7, 1962, the Crossons gave a promissory note to Cy Friedman for $1250, they executed a mortgage deed of trust to Fred Daum and J. V. Yznaga as trustees for the noteholder.

Subsequently, the Crossons entered into a contract for the sale of the property to Daniel Butler and Helen Butler, his wife. Eventually, the Butlers took title to the property subject to the outstanding indebtedness due the noteholder and payments were made thereon to the Security Bank, Washington, D. C., where the note had been placed for collection. From September of 1962 up to and including August of 1964, the Butlers paid $1219.75 on account of the promissory note for $1250. But the record indicates that on November 3, 1962, an unexplained charge of $707.62 had been entered on the face of the note for $1250 as to. which there is no explanation.

And when the foreclosure proceeding was docketed, the balance due on the note was stated to be $861.14 as of August 5,1964. The foreclosure was duly advertised and the sale of the property was held on June 22, 1965, in front of the premises. J. Victor Dickey, the highest bidder, purchased the property for $2400. The sale was reported on July 13, 1965, and an order nisi was entered on the same day.

The Butlers, alleging that the affidavit of indebtedness was incorrect in that all principal payments had been made or were more than current, claimed that the trustees were not empowered to sell the property and that the sale was therefore null and void. Subsequently, the exceptions were amended to include other allegations to the effect that the advertisement was defective and that the purchase price was inadequate. At the hearing, the chancellor, having found that there was no proof of any fraud or irregularity or any adequate proof as to the inadequacy of the purchase price, ratified the sale on December 30, 1965. This appeal was taken by the Butlers, but not having filed an appeal bond, the trustees conveyed the property to the purchaser on February 25, 1966.

Rather than grant the motion of the appellees to dismiss the appeal on the premise that the case became moot upon the failure of the appellants to give a bond staying the proceedings, we shall consider the questions presented by the appeal. ⁴⁵¹ (i) The claim of the appellants that they were not properly notified of the foreclosure sale is based on the assumption that they were entitled to personal notice. Aside from the fact that the Butlers had actual notice, by way of a letter (the receipt of which is indicated by the record) from the attorney for the note-holder in which they were advised that unless the balance due or $861.14 as of August 5, 1964 was paid in full within a w^eek a foreclosure action would be initiated, the law is clear that personal notice of a mortgage foreclosure proceeding is not necessary. See Blanch v. Collison, 174 Md. 427 , 199 Atl. 466 (1938). The only notice which is required is that set forth in Maryland Rule W74 a 2 providing that the person authorized to make a sale of real estate “shall give notice of the time, place and terms thereof by advertisement in some newspaper published in the county where the mortgaged property * * * is located * * * at least once in each week for three successive weeks, the first such publication to be not less than fifteen days prior to sale and the last such publication to be not more than one week prior to sale.” In addition to the “time, place and terms” of sale, the cases state that the rules generally controlling the adequacy of an advertisement of a judicial sale are (1) that the advertisement is sufficient if it describes the property so that it can be located by the exercise of ordinary intelligence and so that more detailed information concerning it can be obtained if desired, Brooks v. Bast, 242 Md. 350 , 219 A. 2d 84 (1966), Ruby v. Bowlus, 217 Md. 115 , 140 A. 2d 513 (1958), cert. den. 358 U. S. 856 (1958), deTamble v. Adkins, 210 Md. 414 , 124 A. 2d 276 (1956), Preske v. Carroll, 178 Md. 543 , 16 A. 2d 291 (1940) ; and (2) the failure to mention or fully describe the nature and extent of the improvements will not vitiate a sale unless