Horsey v. Chew

Ritchie, J., delivered the opinion of the Court. A scire facias was issued against the appellee as terretenant to revive a judgment recovered by the appellants in 1873, against ,a certain George A.'Mitchell. ⁵⁵⁷ The appellee’s second and fourth pleas, in substance, set up the execution by said Mitchell and wife of a deed of trust conveying to him the land described iu the sheriff’s return, and other property also, for the benefit of said Mitchell’s creditors, the sale of which land, excepting a small parcel still awaiting a purchaser, w'as made by appellee as said trustee and duly reported and ratified by the Court, and the proceeds of which were distributed according to an approved auditor’s report, in satisfaction of judgment claims filed in the equity proceedings according to their legal priority, to the extent of said funds; and that the judgment claim of the appellants was filed in the said suit, and they had manifested thereby their acceptance of the provisions of said deed of trust, and because of such acceptance could not maintain their said writ of scire facias. To those pleas demurrers were entered, and were overruled. It has been frequently decided, that, a creditor who participates in proceedings in equity for the distribution of property, sold under a deed of trust, so far makes himself a party to the deed as to waive his right to deny its validity, and to have elected to surrender any lien he may have had upon the property, and to look to the proceeds of sale instead.

Lanahan vs. Latrobe, 7 Md., 268 ; Farmers Bank of Maryland vs. Thomas, et al., 37 Md., 258 , and same parties, 46 Md., 43 . Upon the averments of these pleas that appellants had participated in said equity proceedings and filed their judgment claims therein for payment from the proceeds of sale, as the averments were taken as true by the demurrers, the Court was clearly right in sustaining the pleas. So far as the demurrers were rested on the ground that the defence was an equitable one and not pleadable at law, we think the decision in Farmers Bank of Md. vs. Thomas, 37 Md., 258 , conclusively supports it as valid at ⁵⁵⁸ law. In that case pleas of the same character were interposed. to a scire facias and were demurred to.

The language of the Court in referring to the position of the creditors is: “ As we have heretofore said, the appellants were not bound by the decree under which the land was sold, because they were not made parties to the suit. They could have stood out and have enforced the payment of their-judgment as against the land in the hands of the purchasers, provided their lien was superior to that under which the property was sold. But if instead of doing this, they voluntarily became parties to the proceedings under which the land was sold, and sought payment of their claim out of the purchase money paid by these appellees,, every principle of equity and good faith requires that they should be estopped from afterwards enforcing payment of the same against the land.” In the case between the same 'parties in 46 Md., 54 , the Court in referring to the former case say : “ That case was decided by this Court upon the pleadings alone, and it was held, upon the assumption of the truth of the allegations of the plea, that the plaintiff would be bound by the proceedings in equity, and estopped from enforcing the lien of its judgment against the land> the proceeds of which it had sought to have applied to the satisfaction of the judgment.” Upon the proof, however, to sustain the averment that the appellants had filed their claim in the equity case and thus accepted the provisions of the deed of trust, no acts of the appellants in proper person were shown ; but the evidence to support the plea was that the attorney of plaintiffs in the suit in which the judgment was recovered had authorized the appellee to file a copy of the judgment in the equity proceedings, with a view of participating in the proceeds of sale of said property under said deed of trust;