Crocker v. Pitti

Parke, J., delivered the opinion of the Court. The two appeals in this case are from the order of the chancellor overruling the demurrers of the defendants to the bill of complaint of Josephine Pitti, formerly Josephine Liberto, surviving wife of John Mario Liberto, against Hyman Steinhorn and Minnie Steinhorn, his wife, the Bank Loan and Realty Company, Incorporated, and Dorothy Epstein. One of the demurrers is by the defendant Samuel G. Crocker, Jr., and the other by the remaining defendants. Separate appeals were taken by the respective demurrants, who declined to plead further.

The demurrers will be more conveniently considered together. The material averments which are admitted by the demurrers may be thus stated: .Under an ancient title the plaintiff through mesne conveyances was the owner in fee of the reversion in a parcel of land in Baltimore City out of which there issued an annual ground rent of thirty-four dollars. The land in question fronts for seventeen and one-half feet on the east side of Arch Street and extends, with this uniform width, eastward sixty-nine feet. This lot forms the southwestern part of a larger quadrangular lot of land.

This larger area has a frontage of thirty-two feet on Arch Street when combined with the frontage of the first mentioned lot, and extends eastward, so as to include all of the first mentioned lot, with a uniform width of thirty-two feet, a distance of one hundred and thirty-five feet to the west side of Pearl Street, which is parallel with Arch Street. The leasehold interest in the quadrangular lot which so lies ⁵⁵ between and fronts on both Arch and Pearl Streets was-granted to one Elijah Hughes, who created on March 15th, 1859, a sub-lease of the interest in the large lot for the residue of the unexpired term of the leasehold interest at the yearly rent of sixty-eight dollars. The sub-leasehold interest in the large lot was assigned by mesne grants to one Branna Mizrach, who gave a mortgage lien on this sub-leasehold interest to the New York Permanent Building and Loan Association, a body corporate. The sub-reversion leasehold estate in the smaller lot whose frontage was on Arch Street alone was acquired by mesne assignments by Elizabeth G. Crocker and Samuel G. Crocker, Jr., the latter of whom died on March 4th, 1937.

The taxes on the land and improvements for the years 1934, 1935 and 1936 were not paid by the owner of the sub-leasehold estate, Branna Mizrach, nor by the mortgage lien holder, the New York Permanent Building and Loan Association, nor by the owners of the leasehold estate, Elizabeth G. Crocker and Samuel G. Crocker. On or about January 20th, 1936, the board of directors of the mortgagee formally resolved that the corporation should dissolve; and on December 18th, 1936, articles of dissolution were filed with the State Tax Commission of Maryland, in which it was stated that the association had no known creditors. The association was declared dissolved on December 31st, 1936. When the articles of dissolution were executed and filed, the defendant Hyman Steinhorn was the president of the association, and one of its directors, and as president signed the articles of dissolution.

The defendant, the Bank Loan and Realty Company, Incorporated, was formed on February 25th, 1936, under the laws of Maryland; and on December 7th, 1936, the mortgagee assigned the mortgage mentioned to the new corporation. The incorporators and first directors of the assignee were defendants Hyman Steinhorn and Minnie Steinhorn, his wife, and Dorothy Epstein. Hyman Steinhorn was the president of the Bank Loan and Realty ⁵⁶ Company, Inc., the assignee, Minnie Steinhorn was its vice-president and Dorothy Epstein was its secretary, and these three have continued to be such officers and directors. As a result of the failure in the payment of the taxes levied upon the lot and improvements, the collector of taxes for the City of Baltimore and the State of Maryland proceeded to sell the fee simple interest in the lot to satisfy the claim for the unpaid taxes.

At this tax sale, the defendant Hyman Steinhorn became the purchaser, and the lot was thereafter, by deed dated July 25th, 1938, conveyed by the collector to Hyman Steinhorn in fee simple. The plaintiff had no knowledge of the failure to pay the taxes, nor that the property had been advertised to be sold and then sold for taxes until a long time after these occurrences. The title thus acquired so remained until the 19th day of October, 1938, when Steinhorn and his wife leased the lot for a period of ninety-nine years renewable forever to a certain E. Ray Mattoon, subject to a yearly rental of sixty dollars, beginning from the 1st of November, 1938; and on the day of the date of this grant of the leasehold, the said Steinhorn and his wife, Minnie Stein-horn conveyed the reversion or ground rent of sixty dollars on said property to the defendant, Samuel G. Crocker, Jr. Thereupon the said tenant, E. Ray Mattoon, on October 19th, 1938, assigned his term or leasehold interest in the property to Hyman Steinhorn and Minnie Steinhorn, his wife. The bill of complaint further alleges that the New York Permanent Building and Loan Association, Incorporated, and its assignee, the Bank Loan and Realty Company, Incorporated, were liable as mortgagee and assignee of mortgagee for the payment of the taxes on the