Holthaus v. Nicholas

Bowie, J., delivered the opinion of the Court. Erancis T. Holthaus and Thomas Ellis having severally-appealed from the orders of the Court below dismissing their respective petitions in the consolidated cases of John Spear Nicholas vs. Wilcox et al, and “The Prospect Building Association” against the same, both appeals were, by consent, argued by the counsel of each appellant, and the appellee, at April term last, upon the record brought up by the appellant Holthaus, as if both appeals were then in Court. The record upon the appeal of Ellis, had not then reached this Court, but has been subsequently received and filed as of the present term. The following opinion, embracing both cases, is therefore entitled and filed as the opinion of the Court in each: On the 5th of November, 1869, the Prospect Building-Association filed their bill in the Circuit Court for Baltimore County, sitting as a Court of Equity, against Andrew J. Wilcox, alleging that in consideration of an advance of the sum of $625, on certain shares of stock by the complainant, the defendant, to secure the payment of the same, had mortgaged certain tracts of land lying in Baltimore county, as appeared by the deed of mortgage therewith exhibited, and having made default in payment thereof, according to the conditions of said deed, the complainant prayed the said lands might be sold, and that the defendant be summoned to answer the premises and abide by the decree, etc. The defendant having been summoned and having-appeared and answered, a commission was issued to take ²⁵³ testimony, which, being returned and filed, a decree was passed on the 10th of August, 1810, authorizing a sale and appointing Messrs.

C. B. Slingluff and J. T. McGlone trustees. On the 16th of May, 1810, John Spear Nicholas filed his bill in the Circuit Court for Baltimore County, sitting in Equity, against Andrew J. Wilcox, the Prospect Building Association, George Appold, and others, and Samuel Kirk, charging among other tilings, that on or about the 11th of October, 1861, the said Wilcox had agreed to purchase of complainant two lots of ground lying in said county, (as per agreement in writing filed,) therein designated as lots No. 8 and No. 9, for the sum of $9,500, payable in instalments, of which the sum of $5,850 had been paid, leaving still due $3,856 19, with interest, etc. That since said purchase Wilcox had mortgaged the lots aforesaid to the Prospect Building Association, which claim is subject to the complainant’s prior lien, and that said corporation has brought a suit, now pending in that Court, to enforce its mortgage. The bill further charged that George Appold and others of the City of Baltimore, and Samuel Kirk, of said city, had since' recovered judgments against said Wilcox, etc. It prayed that said Wilcox and the Prospect Building Association and subsequent incumbrancers might be made defendants, and that Wilcox be decreed to pay the principal and interest due, and for other relief. Subpoenas were issued and returned “summoned Wilcox,” “non sunt the restand no further proceedings appear to have been had until Ith June, 1813'.

In the meantime the trustees appointed by the decree in the case of the Prospect Building Association vs. Wilcox, proceeded to advertise and sell the lands thereby decreed to be sold, they reported that they had sold the same to Thomas Ellis, the highest bidder therefor, for the sum of $5,812 25, and that said sale was faiily made. ²⁵⁴ An order of ratification nisi having been passed, the sale was finally ratified and confirmed on 30th of May, 1871, no cause to the contrary having been shown, and it appearing that requisite notice had been given. On the following day, the 31st of May, 1871, Mrs. Jane Ellen Wilcox filed her petition in the last mentioned cause, setting forth “inter alia,” that the mortgagor, Andrew J. Wilcox, had died intestate, about the 15th November, 1870, leaving two infant children, viz: Julia O. Wilcox and Elizabeth B. Wilcox, of whom the petitioner had been duly appointed guardian ; alleging ' the sale of the land mortgaged, and that the same had been finally ratified, and praying that after payment of the mortgagee’s claim, and expenses, the surplus of the proceeds might he paid to the petitioner, as guardian of the infant children of Andrew J. Wilcox. Appold and others, and Kirk also filed their petitions, praying to he allowed their judgments out of the proceeds of sale. The cause was referred to the auditor, who made a report, applying the proceeds, after payment of costs and expenses, 1st, to the payment of the mortgage ; 2ndly, to the satisfaction of the judgments, and the balance to the petitioner, as guardian of the minor children of A. J. Wilcox, deceased.

On which an order of ratification nisi was passed on the 8th of July, 1871, unless cause to the contrary he shown within ten days. On the 14th of July inst., the trustees, Slingluff and McGrlone filed their answer to the petition of the guardian, alleging that at the passage of the decree appointing them trustees, Nicholas’ hill to enforce his lien as vendor was pending, and Wilcox had hut an equitable title to the property; that Nicholas’ lien amounted to about $4,500, the larger part of the value of the property ; that deeming it their duty to get the best price that could he obtained, ²⁵⁵ and believing it would bring a price totally inadequate to tlie satisfaction of tlie claim of the complainant, if sold subject to the lien of Nicholas, they obtained “the sanction and consent of said Nicholas to sell the whole estate, with the agreement and understanding that the lien of the said Nicholas should be first paid out of the proceeds of sale, and that upon payment of his lien, the said Nicholas would join the trustees in a deed to the purchaser, and thereby convey to him a fee simple title, clear of all incumbrances.” That with this understanding, they put up the property at auction, (having several times prior thereto ineffectually tried to sell the same) when the auctioneer, under the order of the trustees, announced the “property would be sold in fee simple, and clear of incumbrances,” etc., “that the property was knocked down to Mr. Thomas Ellis, who was present at the announcement of the auctioneer, at $295 per acre: that the price agreed to be paid by Ellis, was a fair and reasonable price for the property, clear of said Nicholas's and all other incumbrances, but was “ out of all reason and perfectly exorbitant as a consideration for said property, independent of, and subject to the lien of said Nicholas,” that they had informed the purchaser Ellis, that upon the ratification of the sale, he would obtain a deed of the whole property clear of incumbrances ; since the filing of the petition to wdiich their answer was filed, the trustees have been informed by Nicholas, that unless his claim is paid, he will refuse to convey his title and interest in the property to the purchaser at said sale. They therefore submit if the petitioners' prayer is allowed, the loss of $4,500, will fall on the purchaser, etc., and therefore prayed that Nicholas’s lien should be first extinguished, etc. After sundry intermediate petitions and orders not necessary to be noticed, the auditor made a report, assigning ²⁵⁶ to J. Spear Nicholas $4,892.13, in payment of his lien, and the balance, after payment of costs, commissions, etc., to the Prospect Building Association, in part payment of their mortgage, excluding the other judgment creditors and the heirs-at-law of the mortgagor. To this report and audit, the judgment creditors Appold and others, and Kirk, and Mrs. Wilcox, as guardian of her wards, excepted; which exceptions, being overruled, and the audit finally ratified by the Court on the 20th June, 1872, the exceptants prayed an appeal to this Court.- Upon this appeal of Appold and others vs. The Prospect Building Association, et al., (decided by this Court, at October Term, 1872, reported in 37 Md., 458 to 467,) the orders of the Circuit Court for Baltimore County in equity, ratifying the sale and the auditor’s report, were reversed, and the cause remanded for further proceedings upon the ground that Andrew J. Wilcox the defendant in that cause, had departed this life after the passage of the decree, and before the sale, intestate, leaving a widow and infant children, who were his heirs-at-law, and no suggestion had been made of his death, on the record, to enable the Court to take such action, if any was deemed necessary, and no order of the Court, directing the execution of the decree having been passed, the sale and ratification thereof, was irregular and improvident.

This Court also said, “ It further appears, that at the time of the decree aforesaid, John Spear Nicholas 'had filed a bill in the same Court for the sale of the same property, to enforce a lien held by him as vendor, not having parted with the legal title, and that the defendant, held but the equitable interest in the same. These cases, both pending in the same Court, for the sale of the property, might have been consolidated, so that by the action of the Court, in the exercise of its immediate authority, without the intervention of the trustees, the property might have ²⁵⁷ been sent into the market for public sale, disencumbered of both the legal and equitable claims of Nicholas, and the defendant respectively, and thus command a fair price, and the purchaser be enabled to acquire a valid title to the property disencumbered of such liens.” After the case of Appold and Others vs. The Prospect Building Association, had been remanded, (Mrs. Wilcox, widow of Andrew J. Wilcox having died in the meantime) John S. Nicholas, proceeded to amend his bill, by making the infant heirs of A. J. Wilcox, and the executor of Kirk, defendants. The answers of the original and additional defendants were filed; commissions issued and returned, and the case of the Prospect Building Association vs. Andrew J. Wilcox and, Others, was consolidated with the case of Nicholas vs. Wilcox, et al. On the 12th of July, 1873, a decree was passed in the latter case, authorizing a sale of the lands in the proceedings mentioned, and appointing John T. Ensor, C. Bohn Slingluff, and D. O. H. Emory, trustees to execute the same. Pending the proceedings in the case of Nicholas against Wilcox and Others, and prior to the decree therein above mentioned, petitions were filed by Messrs.

McGlone and Slingluff, trustees, Thomas Ellis, and Francis T. Holthaus, respectively, in the case of The Prospect Building Association against Andrew J. Wilcox and Others. The trustees state that their former report, made on the 26th of April, 1871 was defective, in not setting out that they sold the property in fee-simple, and clear of all incumbrances, and especially, of the vendor’s lien held by John Spear Nicholas upon the same, and in not being sufficiently full and explícitas to the proceedings therein. Recapitulating substantially their answer to the petition of Mrs. Wilcox, before recited, they further aver that having twice attempted to sell the property without success, ²⁵⁸ because as they believe of tbe lien held by Nicholas for the purchase money, and the title of the defendant, was only an equitable one, and because it was supposed by the public, they could not sell clear of the vendor’s lien, and cpnvey the legal title, they sought and obtained the consent of Nicholas, to sell the ivhole estate, clear of his incumbrance with the agreement and understanding, that his lien should first be paid out of the proceeds of sale, upon the payment of which, Nicholas agreed to join ivith the trustees in a conveyance in fee simple to the purchaser. Under said agreement they again advertised the property; and at the sale, before the bidding commenced, announced by their auctioneer, that the property would be sold in fee simple, and clear of all incumbrances, which announcement was made in the presence and hearing of Thomas Ellis, the purchaser; that when they made their report, they did not deem it necessary to set out the above facts, being of the opinion, that no valid objection could be made to the same, inasmuch as the only parties interested in the proceeds of said sale, were satisfied therewith.

That since the final ratification of said sale by this Court, objections have been made to the distribution of the proceeds thereof, first to extinguish said vendor’s lien, on the ground that your petitioners sold only the rights of Andrew J. Wilcox; and the vendor’s lien is still a burden upon said property, notwithstanding the proceeds of sale were sufficient to pay the lien and costs, and leave a surplus to be distributed to the eonqfiainant. For which reasons, and because the purchaser and those claiming under him by reason of the sale and the ratification thereof, have entered into possession of .the property, and expended large sums of money, amounting to ten thousand dollars (as they are informed,) in buildings and improvements, and irreparable damage will'be done' the purchaser, and his alienee, if the sale is not sustained, and said vendor’s lien ²⁵⁹ is not paid out of the proceeds of said sale, said report ought to be amended. The petition of Ellis, after recapitulating many of the foregoing allegations as to the sale of the property, free from all incumbrances, and his purchase thereof, and the ratification of said sale, states that the petitioner was enabled shortly after, by giving a long credit extending over four years, and engaging to procure a deed within three months, to contract for the sale thereof, to one Francis Holthaus, for an advance of one thousand dollars. That no objection being made to the sale or its ratification, he was not called upon to assert his rights before the decree of the Court of Appeals ; on the contrary, he paid over the whole purchase money to the trustees, relying on their assertions made in good faith, that the sale was valid and clear of incumbrances; he contracted to give Holthaus a general warranty deed within three months, in consideration of the advance made by him, and suffered him to go into possession of the land, paid the purchase money, without the slightest notice by any of the parties to the cause, that the sale would ever be disputed — that the property was sold for a fair price, equivalent to the fee-simple value of the land.

After charging that Holthaus has rescinded his contract with him, that he is the bona fide purchaser of the land; that the widow of Wilcox had died, and that his children and creditors are parties to the suit, and the case can be consolidated and a sale made to the petitioner, in accordance with the engagements heretofore made by the officers of the Court, he refers to the amended report of the trustees, as stated in their petition in support of his statements. He alleges that Wilcox left no personal estate of any value, and was deeply in debt; that the proceedings taken by John Spear Nicholas and others, were without notice to the petitioner, and he prays the same may be annulled; that proper parties be made in the cause, and ²⁶⁰ the sale made to him may be ratified, and a deed in fee simple made to him by the trustees, in accordance with his