Harrison v. Ridgely

Offutt, J., delivered the opinion of the Court. On and for some time prior to April 7th, 1920, the appellants in this ease owned a lot of ground in the town of Laurel, Maryland, a part of which was improved by a hotel building and its appurtenances. It was at that time encumbered by a mortgage for $5,600 to Louis T. dark, guardian, which, being in default, he was about to- foreclose. To prevent the threatened foreclosure and to avert the loss which they felt would result from a forced sale of the prop-city, they sought the aid of Messrs.

Edward L. Ward and Euxion M. Ridgely (since deceased), members of tbe Baltimore City Bar, and as a result of their negotiations with them the appellants., on April 7th, 1920, conveyed the Laurel property to Messrs W.ard and Ridgely upon the following trusts: “Eirst: To take possession of said property and the improvements thereon and the appurtenances thereto belonging, and to divide or sub-divide the said property into such number of lots or parcels and with sncli frontage and depth to each lot or parcel as said Trustees may determine in their judgment advisable, and to sell at public sale or on such notice as they may believe necessary, or at private sale, said property in its entirety or in such lots or parcels when divided or sub-divided by them as in their judgment they may deem best, and to grant and convey said property in its entirety, or in such lots and parcels, to the purchaser or purchasers, public or private sale, his, her or their heirs and assigns forever in fee simple. “Second: To receive, take and receipt for the purchase money derived from the sale of said property, whether in its entirety or in lots and parcels, and ¹³⁶ whether at public or private sale and apply the same in the following manner: “(a) To the payment in full of the balance due on a mortgage upon said property given to Louis D. Clark of Howard County, Maryland, dated March 31, 1917, and recorded in Liber 122, folio 172, etc., one of the Land Records of Prince George’s County, together with any and all interest due thereon to date of settlement. “(b) To the payment of all taxes and other public charges due upon said property properly chargeable thereto and to the time of the transfer of said property to the purchaser or purchasers. “(c) To the payment of the necessary cost and expenses of advertising, auctioneer fees and surveyor’s charges incident to a division of said property into lots and parcels, as heretofore provided, and to properly present said property for public sale. “(d) To the payment of a commission of ten per cent, to said Trustees upon, the total gross amount of said sale or sales, whether made publicly or privately,' in full compensation for their services in administering said trust and in carrying out the terms and provisions of this deed. “(e) To the payment of the balance of the fund remaining from the sale of said property after the payments hereinbefore specified to the parties of the first part, their executors, administrators and personal rej>resentatives.” Acting under the authority conferred by that paper, Messrs. Ward and Ridgely, on November 20th, 1920, filed in the Circrn't Court for Prince George’s County a bill of complaint against Louis T. Clark individually and as guardian, mortgagee, to restrain the foreclosure of the $5,600 mortgage, to obtain an accounting from him for monies paid on account of the mortgage, and to have $1,000 of the mortgage debt declared to foe usurious. A decree was eventually ¹³⁷ passed -in that proceeding, which declared that $500 of the mortgage debt had been paid and that Clark was indebted to the mortgagors in the sum of $500 for usurious payments which he had received from them. The mortgage was thus reduced to $5,100 and the decree against Clark for $500 was settled for $325, which he paid to the trustees in cash.

Subsequently the hotel property was sold for $6,500, the old mortgage was released and a new mortgage for $4,250, reduced subsequently to- $3,750, to run for three- years, was placed on the property. After these things had been dono Messrs. Ward and Ridgely sent- the appellants a statement of the amount due them for advances and services, and when the appellants disclosed no intention to pay that indebtedness”, the trustees advertised for sale all the property conveyed h-y the deed of trust except the hotel property, wheren upon the appellants filed the bill of complaint in this case to prevent that sale. In that bill they ask for the following relief: (1) that the court assume jurisdiction of the trust, (2) that it declare the purpose of the deed of trust to have been accomplished, (3) that the defendants be required to convey to the appellants all of the trust property held by them, (4) that they be restrained from aliening or encumbering any trust property, and (5) that an accounting be had between the appellants and the trustees.

In their bill the appellants indirectly deny that the trustees are entitled to any compensation for services ’because, they say, the only claim which the trustees could have to compensation under the deed of trust depended upon sales made by them, whereas part of the property -has not been sold at all, and the remaining! part was sold through the efforts of the appellant William M. Harrison. We have said that the bill indirectly denied that the appellants owed the trustees anything for the services they had rendered, for while it contains no direct denial, yet the complaint-ants must have had some purpose in filing the bill, and as its phraseology by insinuation and innuendo rather than ¹³⁸ by plain statement invites .attention to the nature and basis of the trustees’ claim for compensation and reimbursement, we have assumed for the purposes of this opinion that the appellants meant to deny that the trustees were entitled to such compensation and reimbursement. Otherwise the entire proceeding would he wholly futile and meaningless. The details of the trustees’ charges for compensation are set out in a letter addressed by Mr. Ridgely to Mr. Harrison, which in part reads as follows: “I am enclosing herewith a full statement of the transactions regarding the Glover Leaf Inn, by which it appears that Mr. Ward and I are entitled to $1,017.26 for cash advanced and expenses, which, together with our fee of $1,500, entitles us to $2,517.26.

Our fee is arrived at by charging $300.00 for trying the Clark ease plus a charge of tea per cent, on the value of the property at your own valuation, as follows: Property sold for........................$6,500.00 70 feet retained on Main Street............ 2,800.00 200 feet on Second Street.................. 2,000.00 Olark judgment......................... 500.00 Meadow lot............................. 200.00 $12,000.00 Our fee of 10% on the value of the property$l,200.00 Charge for trying the Clark case........... 300.00 $1,500.00 After paying us the $1,017.26 advanced and the $1,500.00 fee, or $2,517.26, you will have, according to your own valuation of the property: Meadow lot.............. $200.00 17 acres, valued at....................... 1,200.00 70 feet on Main Street.................... 2,800.00 200 feet on Second Street................. 2,000.00 Rote of Mrs. Osborn...................... 300.00 Clark judgment......................... 500.00 ¹³⁹ Difference between the Osborn mortgage of......................... $4,500 And Burgess mortgage of............ 4,250 ----- 250.00 $7,450.00 Less fee and advances by Eidgely and Ward. 2,517.26 $4,932.74” Their claim for advances is. based upon payments made by them on account of the property, for such expenses as interest, court costs, taxes, recording cosits, the fees of title examiners, commissions on loans, and the like. The defendants answered the hill, and in their answer they set out in great detail the nature and character of the services rendered by them, as well as the money advanced by them in order to bring to a successful close the trust which they had assumed. It is unnecessary to refer to the answer farther than to say that it positively asserts that the hotel property was sold through the trustees, that the advances made were proper and essential to the successful administration of the trust, and that the charges for compensation based upon commissions on the estimated value of the unsold property are fair and proper charges. The conflicting averments of the bill and the answer respectively presented issues of fact which in ordinary course would have been determined by evidence, or by setting the matter down for a hearing on bill a.nd answer, which would have amounted to a demurrer to the answer and would have admitted the truth of its allegations, and that the allegations of the bill denied by the answer Were disproved.

Fletcher, Equity Pl. & Pr., par. 677; Miller, Equity, par. 255. But neither of these courses was followed, and there is nothing contained in the record before tbis Court which shows with any certainty what was done between tbe filing of tbe defendants’ answer 'and the court’s final decree, except that ¹⁴⁰ there was a motion for the dissolution of the injunction, and an