DeTamble v. Adkins

Brune, C. J., delivered the opinion of the Court. This is an appeal from an order of the Circuit Court for Cecil County, overruling exceptions of the appellants-mortgagors to the sale of mortgaged premises made by the appellee, as assignee under two mortgages, and ratifying and confirming this sale. The appellants attack the sale upon the following grounds: (1) insufficiency of the Notice of Sale; (2) inadequacy of price; (3) want of exercise of reasonable judgment and discretion on the part of the assignee, particularly in selling the mortgaged property as a whole and not by lots; (4) exclusion of evidence relating to subdivision of the property; and (5) exclusion of evidence of an increased offer received after the date of sale. The principal facts in the case are summarized in the opinion of the Chancellor as follows (the order in which they are stated being somewhat different from that in which they are set forth in his opinion) : “By mortgage dated September 20, 1949, recorded September 22, 1949, Paul deTamble and wife conveyed to E. S. Adkins & Co. Inc. 180 acres of land on the east shore of the Chesapeake Bay in the First Election District of Cecil County ⁴¹⁹ to secure the repayment of a loan of ten thousand dollars.

Terms of payment provided therein were $1000 annually from date and the. whole balance to become due in five years, interest at 6% payable annually. By a second mortgage dated October 20, 1953 the same mortgagors conveyed the same property to the same mortgagee to secure a debt of $5,965.27 payable one year from date with interest at 6%. “Both mortgages being in default, the former about four years, the mortgagee on July 15 and July 19, 1955 assigned them to E. Dale Adkins, Jr. for foreclosure. To August 16, 1955 the total mortgage debt on both mortgages and including 1954 taxes and fire insurance premiums advanced by the mortgagee was $17,990.87. “The advertisement of sale in the Cecil Democrat gave the names of the mortgagors and mortgagee, the dates of the mortgages and their places of record. It contained a complete description of the land and its area.

At the top of the advertisement in large type it was described as ‘Valuable Waterfront Real Estate’. The last four courses as shown by the metes and bounds description in the advertisement run along the Chesapeake Bay a total distance of 2813 feet. The advertisement in the Cecil Whig contained a similar reference to the mortgages, was headed in large type ‘Waterfront Real Estate’ and described the property as ‘adjoining the development known as “West View Shores” on the east shore of the Chesapeake Bay.’ “The assignee filed his report of sale on August 16, 1955 from which it appears that after filing his approved bond and after advertising the sale in the Cecil Democrat and the Cecil Whig, two newspapers published in Cecil County, he sold the property described in the mortgage by public auction to J. E. Walls, Sr. for $28,500.00. “On September 14, 1955 and before the expiration of the order nisi on the report of sale, the mortgagors filed exceptions to its ratification.” We shall now turn to an examination of the several grounds of attack in the light of the facts above stated and of some additional facts relating to particular phases of the case. ⁴²⁰ 1. Sufficiency of Notice.

The sale was advertised for the prescribed length of time in two newspapers published in the county where the property is situated (though publication in only one was required). Each advertisement described the property so that it could be located by the exercise of ordinary intelligence and so that more detailed information concerning it could be obtained, if desired. Each advertisement referred to the mortgages under which the sale was to be made and gave the place of recording thereof. One advertisement gave a complete description of the property by metes and bounds, courses and distances, though such a description has been held unnecessary (Stevens v. Bond, 44 Md. 506 ) ; and the other advertisement gave a general description of the property and its improvements.

Each advertisement showed that the property was waterfront property on the east shore of Chesapeake Bay. We think the advertising of the sale was sufficient to meet the requirements of both the original mortgage executed in 1949 and of the second mortgage executed in 1953 and of Code (1951), Article 66, Section 5(c). See Preske v. Carroll, 178 Md. 543 , 16 A. 2d 291 ; Clemens v. Union Trust Co., 170 Md. 520 , 185 A. 462 ; Shaw v. Smith, 107 Md. 523 , 69 A. 116 ; Sawyer v. Novak, 206 Md. 80 , 110 A. 2d 517 . The appellants complain of the fact that no sales bills were distributed.

This is not necessary. Preske v. Carroll, supra. They also complain that no posters advertising the sale were placed upon the premises. This objection, too, we think is not well taken.

Chilton v. Brooks, 69 Md. 584 , 16 A. 273 . The appellants also complain that the advertisements should have been published in Wilmington and Philadelphia, on the ground that the market for property of the kind here in question is to be found in those cities. That argument, we think, is to be considered with the appellants’ third contention — that the assignee did not exercise sufficient diligence to obtain the greatest possible price. 2. Adequacy of Price.

The property was sold at a price of $28,500. The appellants produced several witnesses who valued the property on the basis of its having a waterfront ⁴²¹ on the Chesapeake Bay at amounts much in excess of that price. One valued it at $100,000, another at $173,000, and a third at nearly $185,000. The Chancellor gave careful consideration of the testimony of these witnesses and stated that: “It is apparent that these witnesses in valuing the waterfront at $35 to $50 a front foot, were using sales prices which might be obtained for lots on the Bay, highly developed, widely advertised, abutting improved roads and having sewer, water and electricity immediately available.

Such sales would often be made on installment contracts and the ultimate liquidation of a tract like this might take years.” The views of the Chancellor are supported by what this Court said in Hunter v. Highland Land Co., 123 Md. 644, at 649 , 91 A. 697 , at 699: “The witnesses offered by the ex-ceptants placed the value of the property at a sum much larger than the amount at which it was sold, while the witnesses produced by the mortgagee company placed the value of it at or about the amount at which it was sold. The witnesses for the exceptants valued the lands as building lots, although the improvements and developments necessary to render it available for such purposes had not been made, and to make such improvements and developments the expenditure of much money will be required, and when so made there is no certainty of a speedy and profitable disposition of the lots, especially so in view of the protracted and unprofitable efforts of the president of the mortgagor company in disposing of nearby lots where the lands had been so improved and developed. The value so placed upon the land by such witnesses is, therefore, uncertain and more or less speculative.” There was also testimony of a broker called by the appellee to the effect that he valued the property at $28,000 to $30,000. He testified that it was farm land, that it was worth $75 per acre but that because of its added value as a waterfront he doubled this valuation to $150 per acre.

The mortgaged property consists of a tract of approximately 180 acres, of somewhat irregular depth, with a frontage of somewhere in the neighborhood of 2500 feet on Chesapeake Bay. The courses ⁴²² and distances contained in the description of the property set out in one of the advertisements add up to a total of 2813 feet fronting on the Bay, but one of the appellants’ witnesses gives the length of the saleable waterfront property at 2425 feet, and another of their witnesses based his valuation on 2500 feet of waterfront. Apart from the field containing about 75 acres, which is the frontage on Chesapeake Bay, the rest of the property is said to consist of narrow connecting corridors or strips of land. It is agreed by both sides that unless the disparity between the valuation of the property and the price obtained for it is such as to shock the conscience of the court, the sale will not be set aside for mere inadequacy of price.

Lippold v. White, 181 Md. 562 , 31 A. 2d 170 . For reasons which we will discuss more fully below under the heading of “Diligence of the Assignee”, we think that the Chancellor was warranted on the evidence in rejecting the appellants’ valuations and in reaching the conclusion that there was no such disparity between value and price as would warrant setting the sale aside. 3. Diligence of the Assignee. There is no question that the assignee in making the sale under the mortgages was bound to effect the sale “under such conditions and terms as to advertisement and otherwise, as a prudent and careful man would employ, seeking to obtain the best price for his own property.” Waters v. Prettyman, 165 Md. 70 , 166 A. 431 ; Carroll v. Hutton, 88 Md. 676 , 41 A. 1081 ; Hopper v. Hopper, 79 Md. 400, 29 A. 611 ; Gould v. Chappell, 42 Md. 466 .

The appellants made no charge of intentional fraud or wrongdoing in connection with the sale, but they do charge want of diligence in seeking the best price. The principal ground upon which they assert that sufficient diligence was not exercised is that the property was sold as an entirety and was not offered for sale in separate lots. They claim that the latter form of sale would have produced much better prices. They rely particularly upon Waters v. Prettyman, supra; Long v. Worden, 148 Md. 115 , 128 A. 745 ; Carroll v. Hutton, supra; and Gould v. Chappell, supra.

In the Waters Case the mortgaged property consisted of ⁴²³ 27 lots which formed the