Hackerman v. Carmel

Sloan, J., delivered the opinion of the Court. On December 22nd, 1926, the appellee, Abraham S. Carmel, gave a mortgage conveying a leasehold property located at 528 North Central Avenue, Baltimore, to Benjamin Scherr and Annie Scherr, his wife, to'secure the payment of the sum of $2,500, payable three years after date, with the interest thereon. The mortgage contained the usual consent decree applicable to Baltimore City, in accordance with the provisions of chapter 123, secs. 720-732,. of the Acts of 1898. The mortgage was foreclosed and the mortgagees filed a motion for a deficiency decree, under the provisions of section 731A of article 4 of Code, Pub.

Local Laws, 1930 (chapter 327 of the Acts of 1898), for the sum of $1,482.84. The mortgagor, Abraham S. Carmel, filed an answer to this motion, wherein he neither admitted nor denied that there is still remaining due and unsatisfied the amount claimed on the mortgage debt, but denied that he was indebted to the mortgagees in any amount upon their alleged mortgage claim and denied that they were entitled to a decree. Subsequent to the filing of the answer, the mortgagor, Carmel, filed a cross-bill of complaint, to which he made Benjamin Scherr and Annie Scherr, his wife, Herman S. Hackerman and Sophie Hackerman, his wife, and Eli J. Hackerman, parties defendant, wherein he alleges (1) that his wife,'Mary Carmel, and Annie Scherr are sisters; that his sister, Esther T. Hackerman,' is the wife of Eli J. Hackerman; that Eli J. Hackerman and Herman S. Hackerman are brothers; and that Herman S. Hackerman and Eli J\ Hackerman and Carmel are cousins; (2) that on November 28th, 1925, Israel Margolius, father of Sophie Hackerman, wife of Herman Hackerman, died, leaving a will, and that Herman S. Hack ⁶¹¹ erman was appointed administrator of his estate and that, among the assets coming into the hands of the administrator, was the leasehold property; (3) that Herman S. Haekqrman wanted to buy the property and requested his cousin, Abraham J. Carmel, the appellee here, to take title to the lot for him, which he did, although he alleges that the deed was never delivered to him; that the consideration for the purchase was $2,600, of which $100 was paid in cash and the $2,500 was to he paid within sixty days; that Carmel did not- make the cash payment and never received any of the proceeds of the mortgage; that he now believes, and has been so- advised, that Herman S. Hackerman was buying the property through him so- as to avoid any question as to the propriety of the sale to him individually; (4) that the- negotiations for the mortgage to Benjamin and Annie Scherr were made by Herman S. Hackerman; and that he advised them that in the transaction Carmel was merely a “dummy” or “straw man” for Herman S. Tlaekerman; that by letter, agreement, or other paper writing, Herman S. Hackerman and Sophie, his wife, and his brother, Eli Hackerman, undertook to guarantee- the payment of the mortgage, and agreed that in the event of foreclosure they would be responsible for the deficiency, if any; (5) that t-he whole matter was gone over, explained, and fully understood when the- mortgage was executed on the 22nd day of December, 1926, in the presence of both the Schorrs, who were advancing the money to complete the sale, and that no credit was extended to Carmel, and that he- was not to bo liable for the mortgage debt, and that, on account of the- close relationship of all the parties concerned, Carmel felt perfectly secure- without the necessity of any written assurances to protect him; (6) that subsequent to the execution of the mortgage, Carmel was never consulted hv any of the other participants in the transaction, never collected any of the rents on the leasehold property, never paid any of the taxes, ground rent, or interest, and no demand was ever made upon him by the Scherrs with respect to- the- expenses or upkeep of the property, and that ⁶¹² the first notice he received from the mortgagees, Benjamin Seherr and his wife; was a notice from their son, who is an attorney, that the mortgage was going to he foreclosed, and he was told by the Scherrs’ son that the notice was only being given as a matter of form and that if it became necessary to foreclose and sell they would not proceed against him, but against Herman S. Hackerman and Eli J. Hackerman in the event of any deficiency; (7) that, in accordance with the understanding had in the first place; the Scherrs did make demand upon Herman S. Hackerman and his- wife and Eli J. Hackerman for the- payment of the deficiency, and that, on or about January 14-th, 1931, nearly a year after the foreclosure, the Scherrs proceeded against them upon their guaranty agreement for the recovery of the deficiency, and that Herman S. Hackerman and Sophie Hackerman ignored the suit, and judgment by default was. extended against them, and that Eli J. Hackerman has filed pleadings therein, but the case has never been tried against him; (8) that on April 23, 1932, Eli J. Hackerman filed a bill in the Circuit