Levin v. Sun Mortgage Co.

²⁰⁹ Pattison, J., delivered the opinion of the Court. On the 5th day of March, 1924, Wolf Levin was the owner, in fee simple, of the properties known as Bos. 2225 and 2251 Wilkens Avenue, in the City of Baltimore, and he also owned the leasehold property known as. Bo. 1425 W. Baltimore Street. In addition to these properties he and his wife, Beba Levin, the appellant, owned Bos. 1429 and 1431 W, Baltimore Street by the entireties.

There were, at such time, mortgages upon all of said property, which had been placed thereon by Wolf Levin and Beba Levin, his wife, and upon these properties there were due and owing at that time taxes, water rent, etc. On the said 5th day of March, 1924, Wolf Levin and Keba Levin executed two- mortgages on all the above, mentioned properties, the first for the sum of $20,000, given to the Sun Mortgage Company, one of the appellees, payable two years after date with interest payable semi-annually, and at the time of the execution of the mortgage they signed and delivered to the mortgagee company their five promissory notes, one for $20,000, representing the principal indebtedness, payable in two years thereafter, and four others, payable in six, twelve, eighteen and twenty-four months: for the interest upon said mortgage debt accruing at such times. The second mortgage was for the sum of $7,930 and was given to the State Building & Loan Association, of Baltimore City, another appellee. The first of said mortgages was: thereafter assigned by the Sun Mortgage Company to the Union Trust Company .the third appellee in this case. On the 11th day of September, 1924, Wolf Levin and Behai Levin, his wife, conveyed the two Wilkins Avenue properties by deed of that date to Joseph Vigman.

This was after they had on the 2nd day of July, 1924, executed in duplicate a contract of sale for said properties. In order to pass a title: to the properties, free and clear of the encumbrances of the mortgages given to the Sun Mortgage Company and the State Building & Loan Association, the Union Trust Co., assignee of mortgage, and the State Building & Loan Association, did, on the 13th day of September, 1924, release ²¹⁰ said properties from the lien of their respective mortgages, upon the payment to them, out of the proceeds of the sale of said properties, of the sums of $5,030 on the mortgage given to- the Sun Mortgage Company, and $1,507.50 on the mortgage given the State Building & Loan Association. Thereafter, on July 31st, 1925, the property known as 1425 W. Baltimore Street was released from the operation and effect of the said two mortgages, upon the payment, it is said, of a substantial amount thereon. The amount required to be paid upon said mortgages for the release of the properties mentioned was determined by a í’eúnspection and re-appraisement of the properties.

The lien of the remainder of the mortgage thereafter rested alone upon the two’ West Baltimore Street properties owned by Reba Levin and her husband by the entireties. Thereafter the husband Wolf Levin died and Reba Levin, the wife, became sole owner of the last mentioned properties, subject to the liens against them. On the 5th day of March, 1926, after the death of her husband, Reba Levin filed her first bill of complaint, in which she alleged the facts we have stated, and the further facts that the stocks of the two corporations, the Sun Mortgage Company and the State Building & Loan Association, were practically owned and the companies managed by the same people; and that the said Sun Mortgage Company, in the ordinary course of its business^ made loans on first mortgages only, and immediately assigned them unto’ the Union Trust Company of Maryland, for the purpose of financing such loans, and the mortgage in this case given to- the Sun Mortgage Company was so assigned to the Union Trust Company. It further alleged that the releases both of the Union, Trust Company as assignee of mortgage, and the State Building & Loan Association, were made without the knowledge and consent of the appellant Reba Levin, and were, as alleged, “wrongful, improper, unlawful and inequitable and enured to the detriment of the appellant.” The bill further alleged that neither of the aforesaid mortgages were then in default, but alleged that “the State Build ²¹¹ ing & Loan Association contends that the second mortgage, aforesaid, is in default, and is demanding some arrangement or settlement in relation to said second mortgage, at this time, under peril of attempted foreclosure proceedings therein.” The bill then charges that the appellant “is entitled to be credited with and to have said mortgages respectively charged with the full value of the properties released, as aforesaid, respectively, as of the time of the execution of said respective releases.” It then concluded with the following prayers: First.

That the defendants (appellees) be restrained from foreclosing or attempting to foreclose said mortgages respectively, until after an accounting of the amounts actually remaining due under said mortgages, and an opportunity given to the plaintiff (appellant), to pay the same. Second. That the Sun Mortgage Company, the State Building & Loan Association, and each of them, may be made to account unto the plaintiff in the premises. Third.

That she may be credited on said mortgage accounts respectively, with the full value of the properties released, as of the time of the execution of said releases respectively. Fourth. That she may have such other and further relief as her case may require. To this bill, the affidavit of the plaintiff was attached, and upon the bill a conditional order was passed on the 5th day of March, 1926..

On the 13th day of March, each of the defendants filed a demurrer to the bill, all of which were sustained by the court, with leave to the plaintiff to file an amended bill. Ou May 3rd, 1926, she filed her amended bill, which contains the allegations of the first bill, but goes more extensively into the question as to the relations of the defendant companies, alleging agency, and for the first time it is alleged, “That for a some time prior to and on the 5th day of March, 1921, your oratrix was physically and mentally ill, and in no condition to make a valid deed or contract, and that on, or about, the 25th day of May, 1925, said Wolf Levin insti ²¹² tuted proceedings de lunático inqtdrendo against your oratrix in the Circuit Court No. 2 of Baltimore City; that for some years prior to said proceeding said Wolf Letón made repeated efforts to rid himself of your oratrix; that during said efforts said Wolf Levin determined to saddle your oratrix’s property with the obligation to pay the mortgage debts herein referred to; that Louis S. Ashman, Esquire, president and general counsel of the Sun Mortgage Company and chairman of the executive board and general counsel of the State Building and Loan Association, directed and managed the matters of the releases herein complained of, and that at the time of so doing, and at the time of the release of said mortgages, said Louis S. Ashman of said mortgage companies had full knowledge of the matters alleged in this paragraph.” The prayers of the amended bill are practically the same as those of the original bill, and attached thereto we also find the affidavit of the appellant. An answer was filed to the bill, and considerable testimony was taken, at the conclusion of which the court dismissed the bill, with costs to the defendant. It was from that decree that the appeal in this case was taken.

There are two questions presented by this appeal. The first being one of fact, whether the appellant had the mental capacity to make a deed or contract at the time of the execution of the mortgages by her and her husband to the Sun Mortgage Company and the State Building & Loan Association, respectively, and the second, a question of law, whether the partial releases of the mortgages mentioned, made in the manner stated, worked such a wrong to the appellant as to' entitle her to the relief sought. The mortgages referred to were executed by the appellant in the Hebrew Llospital, in the City of Baltimore, where she was then a patient. Her sister, Bertha Libowitz, when asked as to her condition Avhen in the hospital, answered “She (her sister) kneAv practically nothing and you could not make her understand what you were speaking and she was very weak * * * she had to be practically fed and eAreiything, she had to be helped to do ²¹³ everything she did.” And when asked if in March, 1924, her sister was capable of attending to any business or making any agreement, she said: “Well, she really could not understand anything, but she was very obedient.

If she was told to do anything she would do it, whether she understood it or not, we did not know.” And when asked “What is her condition at the present time i” she said “She is still in the same condition,” and was in this condition on the 30th day of September, 1924, and the 31st day of July, 1925. Dora M. Libowitz, her mother, testified that she was at the hospital at the time the mortgages were executed, and when asked what look place on that occasion, she said, “While I was sitting there feeding' Iieba, her husband came in with another man, a man carrying some papers in his hand, and he (her husband) walked over to Iieba and told her to sit up,, but she did not sit up, so * * * he took her by the hand and said ‘How sign this,’ and she did not do it, so he took her by the hand and he held the pen and kept on writing. I wanted to know what it was all about, and he told me to keep quiet, 1 liad no business in it.” She said the man asked her daughter no questions. “Wolf took her hand and signed what he wanted to sign on the paper, and then the man took the papers and went away.” She further testified that her daughter suffered from nervous trouble, which, as she says, “amounted to insanity.” Dr. Myer A. Weinberg, a general practioner of medicine, testified that he saw the appellant at her home in March, 1924. He afterwards saw her while at the Hebrew Hospital, where he had occasion to examine her and frequently saw her while there.

He was then asked what her mental condition was on March 5th, 1924; he replied “Well, if we speak of the condition the whole time she was over there, but not any one particular day, it would be difficult for me to remember a day. Her mental condition was certainly not normal, extremely far from normal, the whole time she was in the hospital. She was very nervous, she was thoroughly unreliable in her actions, that is, in her answers and questions and her general condition.” He was then asked “Your opinion ²¹⁴ is that she was not mentally competent to make a valid deed or contract, is that it? A. I would say unqualifiedly yes, she was not.” A motion was made to strike out this testimony, but the motion was overruled.

There is no evidence that Dr. Weinberg had ever attended the appellant, or knew of her condition, until about March 1st, 1924, when he was called in and he advised her to see a nerve specialist. He speaks of an examination of her, without stating its character or result, and when asked for his opinion of her mental condition on March 5th, 1924, he made the answer above stated. He was then asked the leading and objectionable question, “your opinion is that she was not mentally competent to make a valid deed or contract ?” His answer thereto was, “she was not.” This evidence is not referred to by the lower court in the opinion filed, summing up> the evidence, and it is evident that he gave little or no weight to it. Dr. Gillis, an alienist, was also placed upon the stand as a witness for the plaintiff.

He testified that he never saw the plaintiff earlier than Eebruary 26th, 1925, and examined her on the following day, the 2'7th, nearly a year after the execution of the mortgages and several months after the execution of the first releases. In speaking of her condition he said she had dementia praecox, a progressive mental disorder, and there is considerable mental depreciation or deterioration at the present time (Eebruary, 1928). She answers questions in a silly, foolish way. She is rather inclined to be untidy about herself and habits, and her memory is quite uncertain.

She has some delusionary ideas. She sits gazing forward without moving for a long period, sometimes with a silly look on her face, and in many other ways she shows very marked mental deterioration which has been going on for the last tivo years, I think. In contradiction of the evidence in support of the mental incapacity of the plaintiff, we have the testimony of a number of witnesses. Mr. William Edgar Porter, an