Jackson v. Townshend

McWilliams, J., delivered the opinion of the Court. Appellant (Jackson) asks us to upset the mortgage foreclosure sale of his property. Appellee (Townshend), the attorney who made the sale, insists we should affirm the chancellor, before whom he prevailed. The purchaser was not made, nor did he become, a party to these proceedings.

In October 1962 Richard Salter and his wife became the owners of Parcel No. 1 (see plat). On 26 July 1963 they acquired Parcel No. 2 and on the same day, to secure a loan of $6,000 (the purchase price of Parcel No. 2), they mortgaged both parcels to Loyola Federal Savings and Loan Association (Loyola). In January 1964 they conveyed both parcels to Jackson, subject to the mortgage, which he assumed. The record indicates that Parcel No. 1 represented an investment of $7,000.

Jackson, instead of making the monthly payments as they became clue, fell into the habit of allowing two or three payments to become overdue and then paying them all at once. There is no evidence that Loyola made any objection to this practice. On 21 June 1966, the March, April, May and June payments being overdue, Loyola sent to Jackson, by certified mail, a letter advising him that the mortgage had been turned over to Townshend for foreclosure. The letter further stated that the first advertisement of sale would appear in the “Anne Arundel County papers” on Thursday, 23 June.

Why this letter was returned to Loyola by the postal authorities, marked “Unclaimed,” we do not know. On 22 June, Loyola rendered a statement to Jackson showing a principal balance of $5,033.54 and payments totaling $236.00 (plus $110.08 for the expense account) to be due. The “date payment [was] due” according to the statement was 1 July 1966. The statement also showed an unexpended balance of $265.77 in the expense account. ¹⁰ Although the foreclosure case was not docketed until 28 June, the first insertion of the advertisement of sale was published in the 23 June issue of the Maryland Gazette. 19 July was designated as the day of sale.

On 14 July Jackson sent 2 checks, one dated 12 July and one dated 15 July, each for $174.72, to Loyola in settlement of the payments then due plus the late charges. On 18 July both checks were returned to Jackson, by certified mail. The covering letter appears to confirm a statement made to him in a telephone conversation on that day to-the effect that the checks could not be accepted because "the mortgage * * * [had] been placed in the paper for foreclosure.” The record seems to indicate this was his first knowledge of the impending foreclosure. At 9:00 a.m., on 19 July, the day of the sale, Jackson’s attorney telephoned Townshend and offered to bring the payments to date and pay all costs.

Townshend told him “it was too late * * * the Board of Directors would not accept a part payment.” Both parcels were sold to Ronald Hollander who, at $12,100, was the highest bidder therefor. Two days later, 21 July, Jackson tendered the entire mortgage debt and all costs and expenses, which, of course, was refused. Jackson contends, among other things, that the advertisement of sale was inadequate. He contends also that if the two parcels had been offered separately it would have been unnecessary to sell both of them.

In dealing with these contentions we shall relate whatever additional facts and circumstances may be necessary. I. The advertisement informed the public that Townshend would sell “on the premises” “All those two parcels of ground situate, lying and being in the First Election District of Anne Arundel County, State of Maryland, “PARCEL NO. 1: KNOWN AND DESIGNATED as Lots Nos. 211, 212, 213, 214 and 215, * * * as shown on the Map of Woodland Beach, Sheet No. 1 * * * ” “PARCEL NO. 2: KNOWN AND DESIG ¹¹ NATED as Lots Nos. 216, 217, 218, 223, 224, 225, 226, 227, 228, 229 and 230, * * * as shown on the Map of Woodland Beach, Sheet No. 1 * * * * * “The above described property is improved by a two story, frame dwelling with modern conveniences. “TERMS OF SALE: A cash deposit of $750.00 will be required of the purchaser * * *. “For further particulars, apply to: William W. Townshend, Jr., Attorney Towns-Worth Building, South Street Annapolis, Maryland” In assessing the adequacy of the advertisement it must be remembered that Townshend was the attorney named in the mortgage and that he represented Loyola in the settlement of the mortgage transaction. It is reasonable to assume that he examined the title to both parcels or that he had before him, at the time, abstracts made by a title examiner. He must, therefore, have been aware that Parcel No. 1 fronted on Mayo Road, a main thoroughfare (State Route 214), and that Blue Ridge Road and Bay Bridge Road (40 foot streets) formed two of the boundaries of Parcel No. 2.

Townshend testified that he did not inspect the premises before preparing the advertisement and that, at the time, he did not know that Parcel No. 1 was commercially zoned. He said he knew there was “some type of building there,” but he thought it was “just sort of a converted private garage.” He did not mention it in the advertisement because he “didn’t feel that it had that much value * * * that both pieces had to be sold together as one unit.” How he was able to reach that conclusion without inspecting the property was not made clear. In fact, the building was occupied by an auto body and paint shop and producing $75 per month in rent. He admitted that he learned Parcel No. 1 was commercially zoned about two weeks before the sale.

He made no effort, however, to readvertise or to correct or revise the advertisement or the handbills. Townshend represented in the advertisement that he was in a position to provide further particulars but his testimony suggests that his ¹² knowledge of the property was deficient in at least several significant respects. It is unlikely, therefore, he would have been able to provide an interested person with full information about the property even if he had been asked. In our judgment the advertisement suggests nothing more than an impending sale of a string of 20 foot lots in Woodland Beach “improved by a two story, frame dwelling with modern conveniences.” We see nothing to indicate that there was being offered for sale a compact piece of land containing nearly % acre fronting on a main thoroughfare and two side streets, a substantial portion of which is zoned commercial and which was producing a total of $135 per month in rent.

Nor is there anything to hint the presence of a large food market (Meleddy’s Super Market) on the opposite corner or that there are other commercial operations in the immediate neighborhood. It seems unlikely that buyers of property susceptible to commercial exploitation, once having read the advertisement, would have given the matter any further consideration, unless, of course, they were otherwise familiar with Jackson’s property. Long v. Warden, 148 Md. 115, 119-20 , 128 Atl. 745 (1925), presented to the Court a situation somewhat like the situation here, except that there the sale price was grossly inadequate. 'The comment of Judge Offutt, who delivered the Court’s opinion, is interesting: “In the advertisement of sale the assignee announced that he would “ ‘on Friday, August 8th, 1924, at 10:30 A. M., on Baltimore Street in front of the Second National Bank, in Cumberland, Allegany County, State of Maryland, sell to the highest bidder all those two tracts of land lying in Allegany County, Maryland, adjoining each other, on the National Highway, about three miles west of the City of Cumberland, both of said two tracts forming together 18% acres more or less.’ “It is apparent from these facts, (1) that the property was not properly advertised, (2) that it was not properly sold, and (3) that it sold for a grossly inadequate price. ¹³ “No one could possibly learn from the advertisement that any part of the property was to be sold in lots, and indeed the most natural inference to be drawn from the language of the advertisement was that both parcels were to be sold together, because, while it referred to the fact that there were two tracts, it stated that they ‘adjoined each other,’ and gave the total acreage of both tracts, but did not give the separate acreage of either. So that persons desiring to buy a single lot would not have been induced to attend the sale, because there was nothing in the advertisement to indicate that the property would be sold in divisions smaller than the entire acreage; certainly there was nothing in it to indicate that any part of it was to be sold in fifty foot lots. “When it was sold, however, it was not sold by the entirety, nor by tracts nor by lots.

The 7.9 acre tract was sold as one piece, and three fifty foot lots were sold from the 10.85 acre tract, so that while the advertisement failed to notify prospective buyers desiring to bid on single lots that single lots would be offered, the manner of sale prevented persons who may have desired to bid on the whole 18¡pf acres from bidding. Certainly it would be difficult to contrive any method of selling property less likely to bring its fair market value than that followed in this case.” (Emphases supplied.) Although advertisements as terse and scanty as the one now-being considered ought not to be encouraged we are nevertheless unable to say, in the circumstances here present, that it is. so lacking in sufficiency as to require setting the sale aside. In Butler v. Daum, 245 Md. 447, 451 , 226 A. 2d 261 (1967), the “rules generally controlling the adequacy of an advertisement of a judicial sale” were restated. Judge Horney, for the Court,, said: “[T]he advertisement is sufficient if it describes the property so that it can be located by the exercise of ordinary intelligence and so that more