Habib v. Mitchell

Finan, J., delivered the opinion of the Court. This case is before us on appeal from a decision of the Circuit Court for Prince George’s County which denied appellants’ motion for a continuance and their exceptions to a foreclosure sale. In December, 1965, the Republic Savings and Loan Association (Republic) contacted Mr. Habib, appellant, as to the feasibility of his acquiring a mortgage on certain land as to which Republic was the mortgagee. In July, 1965, a financial arrangement was agreed upon by Habib and Republic.

He acquired title to the property and executed a deed of trust note which evidenced an obligation of $85,000 on which he was to pay 6% interest. The note further provided that the en ³² tire principal balance would be due and payable on August 15, 1968. The appellant claims he did not notice this latter provision. As the August 15th date approached, Habib realized he could not make the payments.

He contends that an officer of Republic orally guaranteed him an extension of the due date for three years. No consideration was given for this supposed extension. On July 1, 1968, Republic was absorbed by Home Federal Savings and Loan Association (Home) who transferred the Habib mortgage to Federal Savings and Loan Insurance Corporation (Federal). Federal began pressing Habib for payment of the principal.

Federal acknowledged that it would honor any extension made by Republic but could find nothing in its records to show that any had been made. It also agreed to extend the time for one year at 7% plus a 1% loan modification fee. This was rejected by appellant. The foreclosure sale took place on December 30, 1968.

Federal, the one and only bidder, bought in the property for $57,850. Subsequent to the sale, appellant’s attorney discovered that the foreclosure bond was not officially stamped “approved” until after the sale and that one of the trustees had authorized another to sign the bond for him. Appellant filed exceptions to the sale on February 3, 1969, the last day on which he could do so. A hearing was scheduled for March 31, 1969.

Appellant moved for a continuance on March 21, 1969, and this was denied by Judge Bowie on March 24. At the hearing on March 31, the motion for a continuance was renewed but Judge Bowie again denied the motion and finding no merit to the exceptions he ratified the sale. Appellant has raised four issues on appeal: (1) Did the denial of a continuance violate due process, (2) Was the foreclosure sale illegal because the bond was signed for one of the trustees rather than by the trustee personally, (3) Was the sale illegal because the bond was not stamped as “approved” until after the sale, (4) Was ³³ the foreclosure sale invalid because of alleged inadequacy of price. We shall discuss these issues in order.

Habib contends that his failure to be prepared for the March 31 hearing was not attributable to any fault of his. He points out that depositions taken on March 13 had not yet been transcribed and that the president of Home had not yet reported whether his records showed an agreement for an extension on the loan. However, appellant knew on February 28 that the hearing was scheduled March 31. He also knew that Judge Bowie had denied his original motion for a continuance.

With this in mind he should have prepared to present his case on March 31 in the event the court should reject his new motion for a continuance. He had no witnesses available. Furthermore the reason he was not notified that Home officials had found no evidence of an extension was that his attorney was out of town the week preceding the hearing. At the hearing on March 31, there was a representative of the noteholder present who was prepared to testify that no evidence of an extension existed.

He could have been cross-examined but was not. Appellant had the essential elements of his case on December 30, 1968, yet he did not file suit until February 3, 1969. We think the cumulative effect of these factors was sufficient to justify the trial court’s conclusion that the appellant was lax in preparing his case. The second issue concerns the failure of one of the trustees to sign the foreclosure bond personally.

The evidence indicates that the trustee was ill and asked a long