Hunter v. Chase

Thomas, J., delivered the opinion of the Court. On the 11th of March, 1916, Samuel L. Chase and Hannah M. Chase, his wife, of Harford County, Maryland, executed a mortgage of certain real estate in said county to Henry A. Whitaker, to secure the payment of the sum of $1,500' due and owing to him, which they covenanted to pay at the expiration of two years from the date of the mortgage, and the mortgage was recorded on the 4th of May, 1916. On the 27th of November, 1918, the mortgage was assigned by Whitaker to The Second National Bank of Bel Air, and the assignment was recorded February 26th, 1919, and, on the 13th of March, 1919, it was re-assigned by the bank to Whitaker, who, on about the same date, assigned it to Charles H. Ohesney in consideration of the sum of $1,500 paid to him by Ohesney, but the assignments to Whitaker and Chesney were not recorded until July 29th, 1920. In the summer of 1919 Whitaker wrote to Chase and his wife, the mortgagors, that the mortgage was due and that it would have to be renewed.

In pursuance of that notice Chase and his wife went to Whitaker’s office in Bel Air, and executed a new mortgage to him of the same property, dated August 23rd, 1919, for $1,600, to cover the principal of the ¹⁵ original mortgage and his charge of $100' for the renewal, with the understanding that he would release the original mortgage, which, without their knowledge, he had, as we have said, already assigned to Ohesney. The second mortgage was duly recorded, and on the 7th of January, 1920, Whitaker, “for value received,” assigned it to Thomas O. Hunter. Foreclosure proceedings having been instituted by Hunter on the second mortgage; Samuel L. Chase and his wife, the mortgagors, on the 6th of October, 1921, filed a bill of complaint in the Circuit Court for Harford County against Hunter, setting out the facts to which we have: referred, and alleging that the said second mortgage had been procured by fraud practiced upon them by Whitaker, and praying that the same he declared null and void and that Hunter he enjoined from further proceeding in the foreclosure suit. Later an amended hill was filed against both Hunter and Ohesney, making substantially the same allegations, and praying for an injunction enjoining foreclosure proceedings on either1 of said mortgages, and that either the first mortgage, held by Ohesney, or the second mortgage, held by Hunter, be declared null and void.

Upon the evidence in the case tending to establish the facts we have mentioned; the fraud practiced upon Chase and his wife by Whitaker in procuring the second mortgage; that Chase and his wife never knew that Ohesney had the first mortgage until they were approached in regard to it by Ohesney’s counsel a short time before this suit; that Ohesney did not have the assignment to him of the first mortgage recorded at once because he was in hopes that Whitaker would repay him the $1,500 loaned to him, but that when he learned that Whitaker was getting into financial