Dodge v. Stanhope

Bowie, J., delivered the opinion of the Court. This cause was before this Court at April Term, 1879, on the appeal of Lewis G. Stanhope and James R. McLaughlin, and others vs. Francis Dodge, et al., and by a. decree of the 17th July, 1879, was remanded under Art. 5th, sec. 28, of the Code, to the Circuit Court for Washington County, without reversing or affirming the order appealed from, for further proceedings therein, in accordance with the views expressed in the opinion of the Court, accompanying the order. The subject of the appeal, is. the distribution of the proceeds of the real estate of Wm. Dodge, sold by trustees, under a decree of the Circuit.

Court for Washington County, as a Court of equity. The former appeal, (as the present,) was from a pro forma order of the Court below, ratifying and confirming the-auditor’s account. ¹¹⁵ On the former appeal, this Court, among other things decided, first, that certain sums charged on the lands conveyed to Wm. Dodge, by his brothers and sisters, by deed dated the 20th of March, 1854, for equality of partition, in the division of their father’s estate, were preferred liens, and as such, to be paid in full out of the proceeds of the land sold by the trustees. These claims are numbered 1, 2, 3, are allowed by the auditor in account Ho. 2 restated, and no exception is taken, or question raised as to them. 2ndly.

The Court further decided, that the deed of the 14th of February, 1863, from Wm. Dodge and wife, to Alexander and Allen Dodge, as trustees, to secure certain notes therein mentioned to Mary B. Marbury, Wm. Mar-bury, Jr., Anna Davis and Elizabeth Offley, gave a preference to the debts secured by it, over the debts of Wm. Dodge, contracted after its date, with notice of said deed; and over his debts contracted after August 25th, 1869, the date of its being recorded; but the debts contracted after the date of the deed, and before it was recorded without notice thereof, were entitled to distribution pari passu, with the claims secured by the deed.

In the language of the opinion, “ the debts of Wm. Dodge created before the date of the deed, or thereafter, with notice of the deed, must be postponed to the claims thereby secured, and in the same manner, the parties secured by the deed, are entitled to priority over all creditors who became such after the 25th of August, 1869, when the deed was recorded. “But the debts contracted after the date of the deed, and before it was recorded and without notice thereof, these, if they are merely general creditors, who have not acquired liens on the land, are entitled to come in pari passu, with the parties whose claims are secured by the deed, and participate with them ratably in the distribution, and if they have acquired liens on the land, they ¹¹⁶ are entitled to priority over those in whose favor the deed was made. “ This rule of distribution results from the construction of Art. 24, sec. 19, and Art. 16, sec. 23, of the Code, and from adjudged cases, Pannell & Smith vs. Farmers’ Bank of Md., 7 H & J., 212; 41 Md., 506 ; 48 Md., 267 .” By an agreement of counsel contained in the record of the first appeal, it was stipulated that if the Court of Appeals shall reverse the said order of ratification, “any and all .the creditors and sureties of said Wm. Dodge, shall have the right to file their claims in said cause, and have such distribution as they may be entitled to under the law subject to all exceptions.” Pursuant to the order remanding the cause, the special auditor proceeded to take testimony in support of the claims filed by the creditors under the foregoing agreement, and restated the account, now designated as Account No. 2, restated, and also stated an account under the directions of the appellants, and reported the same with the evidence to the Court below. To which Account No. 2 restated, the appellants, Francis Dodge, and others, trusv tees, and other claimants excepted.

The account being ratified, Francis Dodge, and others, trustees, appealed. The first series of appellants’ exceptions, are to the allowance of various items of costs, too minute and numerous to be recited, but which were incurred in the course of the conduct of the suit between the parties in the Court below, and in the former appeal or consequent thereon, viz., costs allowed on exceptions to account No. 2, costs on the petition of Rowland, costs of record, costs of appellants and appellees in the Court of Appeals, all of which are excepted to as not properly chargeable to the exceptants. In the consideration of this question, it should be remembered that from the nature of the proceedings it is obvious, the object of the former as well as of the present ¹¹⁷ appeal, was to procura an authoritative and final decision of the rights of the respective parties to the proceeds of the lands to be distributed. In the first appeal, Messrs.

Stanhope and others were appellants, and the Messrs. Dodge, trustees, the appellees. The position of the parties is now reversed. There were undoubtedly grave doubts and difficulties as to the equitable and legal rights of the contestants, which could only be solved by a Court of final resort.

The costs for the most part, were the necessary and inevitable consequence of the complicated condition of the debtor’s estate. Although some of the present appellants’ claims were established by the decree on the first appeal, in which they were appellees ; yet this Court did not in their action on that appeal, affirm or reverse the decree below, but sent the case back for further proceedings without any direction as to costs. The appellants in the former appeal cannot therefore be said to have set up a false claim, although they may have failed to recover. In the case of Calvert vs. Carter, 18 Md., 111 , it is said : “ it is not the province of the auditor to tax the costs in his account, hut his having done so, is no ground for reversal, inasmuch as the subject of the costs was not •specially disposed of by the decree below, and will be provided for by the decree of this Court.

In more recent cases, it has been repeatedly held by this Court, that the question of costs is a matter resting in the discretion of the Court, from the exercise of which no appeal will lie. Mears vs. Moulton, 30 Md., 145 . Again in 34 Md., 107 , it was field that a decree in other respects right will not be 'disturbed, even if in the opinion of the Court of Appeals, there was an improper direction as to the party or fund charged with the payment of the costs. Hamilton vs. Schwehr, et al., 34 Md., 107 . ¹¹⁸ The object of the suit in this case, being the distribution of the proceeds of sale for the benefit of creditors, all or most of whom were prima facie entitled to participate, the costs allowed by the auditor in account No. 2 restated, were generally properly chargeable against the fund before distribution.

There is however no authority for charging appearance fees on exceptions to auditor’s accounts, or other merely collateral proceedings in chancery upon petition, and the auditor in restating his account should exclude such items. Separate and specific exceptions are taken by the appellants to claims numbered 9, 10, 11, 12, 13, 14, 15, 16, 1¹, 18, 19, 20. These exceptions are to the amount of the dividend allowed; the want of proof of the claim ; the Statute of Limitations, and the exclusion of the claims, because it is not shown by the evidence they accrued between the date of the deed of February 14th, 1863, and the 25th August, 1869, the date of its registration, without notice. Besides the exceptions to the claims for the reasons above assigned, the appellants excepted to the testimony taken in support of these claims, and especially to the effect of the admission of fact made in the agreement as to the claims of Knepper and Gardner, (Nos. 12 and 20, account No. 2 restated,) and to all such parts thereof as go to avoid the effect of the Statute of Limitations pleaded, to said claims, and as to the applications of payments as made by William Dodge after the deed of trust.

In maintenance of these exceptions to evidence, it is insisted: 1st. That all evidence given by William Dodge, of promises, acknowledgments, payments, etc., by him made more than three years before the filing of the claims, and all testimony given by others of such admissions, promises, payments, etc., by Dodge, made more than three years before the filing of the claims, is inadmissible to establish or prove said claims, or to avoid the bar of the Statute. ¹¹⁹ 2nd. That all evidence given hy William Dodge, of promises, acknowledgments, payments, etc., by him made after the making of said deed, and all evidence hy others, of promises, acknowledgments or payments by said Dodge, after the making of said deed is inadmissible to prove said claims, or avoid the bar of the Statute, as said William Dodge had, after the making of said deed, no power by his act to bind the trust estate or alter the course of distribution of the trust funds. • 3rd. That the endorsements on notes offered as evidence to avoid the Statute are not proven, as by law they are required to be, nor is the fact of payments mentioned in said endorsements proven as required by law. 4th.

That where judgments obtained after the date of the deed are offered to avoid the Statute, said judgments -are not of any effect to avoid the bar of the Statute. 5th. That where sealed notes dated after 1869, given on •accounts antedating August 25, 1869, are offered as evidence to avoid the bar of the Statute, said notes have merged the original indebtedness, and cannot he considered as keeping alive the original account or debt accrued before August 25, 1869. 6th. That evidence offered of any agreement made or •act done by said Dodge after said deed, to apply payments made or received by him before the date of said deed is inadmissible, because said Dodge had no power after making said deed, to apply payments by him made or received before the date of said deed, or by any act of his to bind the assets of said trust estate, or alter the course of distribution thereof. The objection of want of proof to sustain the several claims, or remove the bar of the Statute of Limitations, involving necessarily the competency of the evidence offered for those purposes, it follows of course that in disposing of the exceptions to the claims, we must decide the exceptions to the testimony, and they will therefore be considered together. ¹²⁰ All of the claims, have the general and common feature of having originated between the 14th of February, 1863,. and 25th of August, 1869, they being alone within the class of creditors entitled by the terms.'of'the decision on the former appeal, to share pari passu with the cestuis quetrust under the deed of the former date.

Standing alone then, they will be liable to the bar of the Statute of Limitations, unless by some legal process, or other act in pais, between the parties to the contract, they are kept alive as against the parties claiming under the deed. No. 9, the first in the series of exceptions, will furnish as well as any other, a subject for the examination and application of the rules by which their allowance will be decided. This claim is an open account of Edward J. Ridenour, Adm’r of Rebecca Reed, against Wm. Dodge, Exhibit E. R. On its face, it is for services rendered by R. Reed, to-Wm.

Dodge, from 14 February,