Hopper v. Smyser

Pearce, J., delivered the opinion of the Court. This record presents cross-appeals from two decrees of Circuit Court No. 2, of Baltimore City, and all the questions arise upon four conveyances of real estate from Harrison Hopper to Henry A. Smyser, as follows : 1st. A deed of August 15th, 1890, for certain Baltimore City property in consideration of $3,500. 2nd. A deed of August 20th, 1890, for thirty-five acres of land in Baltimore County, designated as Garrison Forest, for five dollars and other valuable considerations. 3rd.

A deed of August 22nd, 1890, for the Waverly lots in Baltimore County, for five dollars and other valuable considerations. 4th. A deed of August 28th, 1890, for a farm in Harford County, called the Callahan farm, for five dollars and other valuable considerations, subject to a mortgage for $5,000 previously made by Hopper to Isaac S. George upon this, and four other properties, known as Harford Avenue, Silverwood, Montreal, and the above-mentioned Waverly lots. When these conveyances were made Hopper was indebted to Smyser upon a certain bank-account kept by Smyser, ³⁷⁶ with him, in the sum of $6,213.90, as Smyser claims, oras Hopper claims, in the sum oí $5,187.50. Smyser also claims that Hopper was further indebted, to him at that time in the sum of $3,119.33, being one-half the profits of an oyster business carried on by Hopper and Smyser in 1881 and 1882, but Hopper claims that these profits had been long since settled.

The respective contentions°as to these conveyances are as follows : Hopper claims that they all constitute one transaction, and were made, in his own language, “ to secure any difference that might be between them’’ and for no other consideration or purpose. Smyser claims that the Baltimore City and Garrison Forest properties covered by the first and second deeds, were absolute purchases for full value, fully paid, but admits that the Waverly lots and the Callahan farm, covered by the third and fourth deeds, were conveyed inpayment of Hopper’s indebtedness to him at that time, with the privilege of repurchase upon the repayment of the same amount, and declares that he is now, and always has been, ready to reconvey upon these terms. Smyser filed a bill in equity against Hopper and George alleging that he purchased the Waverly lots with special warranty from Hopper, and upon the understanding and agreement with him that Hopper should discharge the George mortgage, without which he would not have made the purchase, but that George refused either to release said Waverly lots from his mortgage or to assign the same to Smyser upon payment by him, but was ready to assign the same upon payment, either to Hopper or anyone he should name, and the prayer of the bill was that George should be restrained from assigning his mortgage to anyone pending that proceeding, and that the other properties covered by the mortgage, might be sold in exoneration of the Waverly lots, unless George should release the same. Answers were filed and it was agreed that Hopper’s answer should be treated as a cross-bill praying for an accounting between the parties, and a reconveyance of the property conveyed by Hopper ³⁷⁷ to Smyser, and that decree might be made according to the proof.

Testimony was taken, and the Court on March 25th, 1898, decreed the Waverly lots be exonerated from the George mortgage, provided the other properties covered by the mortgage should sell for sufficient to pay the mortgage debt, and that if not sufficient, then the Callahan farm should be sold before the Waverly lots, that in any event the Callahan farm must contribute to the payment of the George mortgage rateably with the other properties according to their respective values ; and that the conveyances of the Callahan farm and the Waverly lots were conditional sales, and not mortgages. The decree directed the auditor to state an account of Hopper’s indebtedness to Smyser at the date of the conveyances, and to report the profits realized by Smyser in the purchase and subsequent sale by him of the Baltimore City and Garrison Forest properties, and the amount due on the George mortgage. All other matters were reserved for the future decision of the Court. From this decree both parties appealed, but neither party sent up the record.

The auditor filed three accounts, A, B and C : Account A showed Hopper’s indebtedness to Smyser on the bank-book to be on August 28th, 1890...........$6,213 19 And on the oyster business at the same date . $3,119 33 $9,332 52 Account B showed Smyser’s profit on the Baltimore City and Garrison Forest to be . . $1,775 51 And Account C showed amount due on George mortgage April 9, 1898, to be.....$5,300 00 Hopper excepted to all these accounts, pleading payment and the statute of limitation to the item of $3,119.33, and claiming credits of $1,026.40 upon the bank-account as allowed by the auditor. To account B he excepted because it did not allow certain items which would increase Smyser’s profits from $1,775.51 to $2,973.68. To account ³⁷⁸ C he excepted because it only ascertained the amount due on the George mortgage at the date of that account, and not the amount due at the date of the conveyance, together with the interest since paid thereon and the expenses incurred to prevent foreclosure by George, for all of which he claims the Callahan farm is liable to contribute. The Court on January 26, 1899, decreed that the conveyances of th'e Baltimore City and Garrison Forest properties were absolute and independent sales for considerations then paid, and that the claim for any profits therefrom be disallowed, thereby eliminating account B from its further consideration.

It overruled Hopper’s exception to account C and ratified the same, saving as between Hopper and Smyser their contribution to the George mortgage as thereafter directed by that decree. It sustained Hopper’s exception to the item of $3,119.63 as barred by limitation, or if not so barred, as a stale claim, and ndt satisfactorily shown to have been in the contemplation of the parties as part of the debt to be paid. All Hopper’s other exceptions to account A were overruled, and the same as modified was ratified, the decree declaring $6,213.19 to be the indebtedness from Hopper to Smyser, August 28, 1890, for which the Callahan farm and the Waverly lots were conveyed to him, and ordering that upon payment of said sum by Hopper within thirty days from that date, Smyser should reconvey said properties to Hopper at his cost, and that on Hopper’s failure to comply with said order he should be forever barred from the right to repurchase, but that the Callahan farm in that event should contribute to the payment of the George mortgage, as of August 28, 1890, with the other three properties covered thereby, in proportion to the valuations fixed thereon by the decree: From this decree, and from all previous decretal orders passed in the cause both parties have appealed. So much of the decree of March 25th, 1898, as exonerated the Waverly lots from the George mortgage until the exhaustion of the other mortgaged properties, is in the ³⁷⁹ nature of a final decree, and such orders and decrees were held in Tome v. Stump, 89 Md. 264, not to be open for revision under sec. 26 of Art. 5 of the Code, but only on appeal directly therefrom under sec. 24 of Art. 5.

We cannot therefore now consider that question. But if we could do so we should be compelled to affirm that part of the decree, because it is too well settled to require the citation of authorities that where one person has a lien upon two or more pieces of property, and another has a lien but upon one of these pieces, the first lienor will be compelled in equity first to exhaust those pieces not covered by the lien of the second lienor; and that where one creates a mortgage upon several pieces of property, and subsequently conveys his equity of redemption in one of these pieces, retaining his equity in the others, the equity of redemption conveyed cannot be sold by the mortgagee until that retained by the mortgagor has been exhausted. This case does not fall within the exception mentioned in Burger v. Greif, 55 Md. 528 , where the purchaser’s liability to pay part of the mortgage debt forms part of the consideration, nor do we perceive anything in Nat. Savings Bank v. Creswell, 100 U. S. 630 , to prevent the application of the principle to which we have alluded.

The other matters determined by the decree of March 25th, 1898, which directed the statement of accounts to make the decree effective, are of course open for revision here under sec. 25 of Art. 5 of the Code, together with the matters determined by the decree of January 26, 1899. The questions we are to decide may be stated thus : 1st. Were the conveyance of the Baltimore City and Garrison Forest properties absolute and independent sales, or do they stand on the same basis as the Waverly lots and the Callahan farm ? 2nd. Were the conveyances of the Waverly lots and the Callahan farm conditional sales, or mortgages ? 3rd.

What was Hopper’s indebtedness for which the Waverly lots and the Callahan farm were conveyed ? ³⁸⁰ 4th. Must the Callahan farm contribute rateably with the Harford avenue, the Silverwood, and the Montreal properties, to the payment of the George mortgage, and if so, upon what basis ? We will consider these questions in the order in which they are stated.. 1st. The conveyances of-the Baltimore City and the Garrison Forest properties, though not set out in full in the record, are described therein as absolute deeds upon their face for valuable and full considerations.

These conveyances are attacked by Hopper in the answer which is treated as a cross-bill, and his effort is to establish by parol, an express trust in the face of the Statute of Frauds pleaded by Smyser. We may say here, as was said in Kidd v. Carson, 33 Md. 42 : “It is not alleged that this deed is different in form and character from what the parties intended at the time of its execution. On the contrary, it is admitted to be just such a deed as they intended to make. * * * To enforce the agreement set up here would be to change the character of the deed drawn up and executed as the parties intended it and to set up a conventional trust on the foundation of a special parol agreement. This cannot be done.” But if it could be done, it would be incumbent upon Hopper to establish the agreement by satisfactory proof, and in this it is proper to say we think he has failed.

He says he owed Smyser a considei-able sum which both parties