Erb v. Grimes

Schmucker, J., delivered the opinion of the Court. The appeal in this case was taken from an order of the Circuit Court for Carroll County finally ratifying the sale of a farm, located in that county, made by the appellee as assignee of a mortgage under the power of sale which it contained. Exceptions to the ratification of the sale were filed by the appellant upon various grounds, but only two of them were insisted upon at the hearing of the appeal. These two grounds of exception will be stated hereafter.

The mortgage in question was made,on February 3rd, 1877, by John T. Erb and his wife to Charles T. Reifsnider by .whom it was assigned on April 24th, 1882, to Apalonia Reifsnider and, she having died, it was assigned on January 10th, 1887, by her executor, John L. Reifsnider to the Westminster Savings Institution, and finally on July 25th, 1900, it was assigned by the Westminster Savings Bank to the appellee. The mortgage contained a power of sale, in case of default, in the usual form to the mortgagee, his heirs, executors, administrators and assigns. The farm was conveyed, subject to the operation of the mortgage, by the mortgagor and his wife to the appellant on February 17th, 1879. Default having occurred in the payment of the mortgage debt the appellee filed on the equity side of the Circuit Court the usual order to docket suit against the appellant accompanied by a bond, which the Clerk approved, and a certified copy ¹⁰¹ of the mortgage with the several assignments endorsed thereon and the original single bill secured by the mortgage.

He then made sale of the farm under the power contained in the mortgage and to the ratification of that sale the exceptions before us were filed. The appellant in his exceptions does not deny the validity of the mortgage, nor does he claim that the debt secured by it has been paid. The two grounds of exception relied upon by him relate to alleged defects in the title of the appellee as assignee of the mortgage. The first of these alleged defects is that the mortgage was never validly transferred from the Westminster Savings Institution to the Westminster Savings Bank, because the latter never had any legal corporate existence and therefore the assignment by it to the appellee conferred no title upon him.

The second supposed defect concerns, strictly speaking, the regularity of the appellee’s proceedings in making the sale rather than the validity of his title to the mortgage itself. It is that the certificate of the Register of Wills of the issuing of letters testamentary on the estate of Apalonia Reifsnider to John L. Reifsnider was not filed in the mortgage proceedings until after the sale had been made. This latter ground of exception was not strenuously insisted upon in the argument of the case the substantial controversy being over the one first mentioned. We will consider these grounds of exception in their inverse order.

It was not necessary for the appellee to file in the mortgage proceedings, in advance of making the sale, the certificate of the Register of Wills of the issue of letters testamentary to the executor of Apalonia Reifsnider. It may be a commendable practice for one about to make the sale authorized by Art. 66 of the Code of mortgaged property, under a power of sale, to file along with the bond required by section 7 of that Article, the original or certified copies of the documents constituting the evidence of his title, but the law does not require him to do so. As was said by this Court in Heider v. Bladen, 83 Md ¹⁰² 243: “ The only preliminary requisite to a sale under this Article of the Code is set forth in the seventh section. It is there enacted that before the person duly authorized shall make, any such sale he shall give bond as provided in that section.

Nothing else is required to be done as a condition precedent to the sale.” We will now consider the merits of the exception chiefly relied upon by the appellants. The Westminster Savings institution was incorporated on October 4th, 1869, under the provisions of Art. 23 of the Code then in force. The certificate used in effecting its incorporation stated that the terms of existence of the corporation was to be twenty-five years. After the adoption of the present Code of 1888 the Savings Institution determined to embrace the opportunity thereby afforded and cause itself to be reincorporated in the manner prescribed in Art. 23.

The requisite steps to that end as set forth in sections 81 to 84 of that Article were taken and a certificate of incorporation under the name of The Westminster Savings Bank was executed and, after having been submitted to the Chief Judge of the Circuit Court for Carroll County and by him certified to be in conformity with the provisions of the law authorizing the formation of the corporation, it was duly filed and recorded in the office of the Clerk of the Circuit Court. The only portions of this certificate of incorporation which are material to the present controversy are the declarations therein contained that the name of the new corporation shall be ‘ ‘ The Westminster Savings Bank ” and that the term of its existence shall be forty years. It is therefore unnecessary for us to set out the certificate at length or to state the remainder of its contents. No assignment or formal transfer of the mortgage under consideration was ever made from the old corporation to the new one, but the latter body and the appellee as its assignee rely for title to the mortgage on the devolution thereof upon new corporation by force of the provisions of sec. 84 of Art. 23 of the Code.

That section says that when the new cer ¹⁰³ tificate thereby contemplated has been duly certified by the Judge and recorded the corporation described therein shall be a body corporate in fact and in law under the name set forth in the certificate * * * “ and the former charter of said corporation shall be deemed to be thereupon surrendered and all of the property and assets belonging to the said former corporation of whatsoever nature and description shall, upon such recording as aforesaid, be devolved upon the said new corporation which shall for this purpose be regarded as substituted by operation of law in the room and stead of said former corporation.” These provisions are so full and explicit that if the Savings Institution in the present case was within the description of those designated by the Code as entitled to a re-incorporation thereunder and it complied with the terms of the law in the steps taken by it to accomplish its new incorporation, there is no room to doubt that the present mortgage and the debt thereby secured devolved upon and became the property of the new corporation prior to the assignment of them by it to the appellee. Sec. 81 of Art. 23 in defining what organizations are intended to be embraced within its operation uses the following language: “Any corporation heretofore formed under the general laws of this State or under any special Act for any purpose for which a corporation may be formed under this Article may cause itself to be incorporated under this Article.” This description is certainly comprehensive enough, if it is to be understood in its ordinary sense, to include the Westminster Savings Institution which had been formed prior to the adoption of the present Code under the then existing general law of this State. The appellant, however, contends that the present Code is merely a revision of the laws in force at the date of its adoption, and therefore expressions found in it relating to time should be referred to the respective dates of passage of those pre-existing laws. In that connection he insists that when sec. 81 of Art. 23 of the Code declares that corporations "heretofore formed" maybe re-incorporated under its pro vi ¹⁰⁴ sions it speaks as of the date of passage of the Act of 1868, ch. 471, upon which Art. 23 is based, and confers the privilege of re-incorporation only upon corporations created prior to that date.

Of course if that contention be correct The Westminster Savings Bank has not been legally incorporated and the title to the mortgage in question never devolved upon it. In support of his contention the appellant suggests that the evident purpose of permitting corporations created prior to the Act of 1868 to re-incorporate themselves under that Act was to give to them the benefit of its provisions and so place them upon an equality with such corporations as might thereafter be created under it, but that no such reason exists for allowing corporations created under the Act of 1868, as the Westminster Savings Institution was, to be re-incorporated under the Code,