Manufacturers & Merchants Co. v. Pyles

Burke, J., delivered the opinion of the Court. On the 26th day of June, 1913, the Julius E. Pyles, Incorporated, a corporation engaged in the construction of buildings, entered into a contract under seal with the board of trustees of the Shiloh Baptist Church, to erect upon a percentage basis a new church at the northwest corner of Clinton .avenue and George street in Baltimore City. It agreed to take down the old church building, and to furnish the necessary labor and materials for the erection of the new church, and to complete the same as speedily as possible. Payment was to be made by the church bi-weekly as the work processed.

On the 18th of February, 1914, the contractor filed a bill against the church in the Circuit Court for Baltimore City, in which, among other relief, it asked for the appointment of a receiver for the church property. On February 21, 1914, it filed an amended bill in which it made five new ■defendants to the suit, viz: Shiloh Baptist Church, Incorporated; The Ardmore Land and Supply Company, a body corporate; Martin L. Weisman, individually; Whit H. Allen, individually, and The Manufacturers and Merchants Company, a body corporate. Five of the defendants demurred to the bill, and on June 15, 1914, the Court sustained all the demurrers, and granted leave to the complainant to file an amended bill. On June 25, 1914, an amended bill was filed, which, after stating the contract between the complainant and the church, charged in substance as follows: That it had entered upon the performance of the work under the contract, and had ³¹⁹ done three-fourths of the construction work upon the church building; that the estimated cost of the new church was $17,-985.27; that it had spent in construction $13,156.51, and had been paid on account of said work $3,466.60, leaving a balance then due of $9,689.75, or more than half of the estimated cost of the building.

That the church being for a long time in default in its payments under the contract, and having declared its inability to make the payments, the complainant temporarily suspended construction in order to give the church an opportunity to perfect its financial arrangements. It is then charged that after the work had been suspended for the reason stated, the complainant discovered that the church had entered into a contract with The Ardmore Land and Supply Company to complete the work in total disregard of its rights; that the contract with The Ardmore Land and Supply Company was a pre-arranged plan to defraud the complainant, and that as a part of said plan the church, claiming that it had never been properly incorporated, executed a deed to The Shiloh Baptist Church for the lot upon which the building was being erected, and that Whit AY. Allen, the grantor of The Shiloh Baptist Church of Baltimore City, joined in the execution of said deed. It is then charged “that in furtherance of said fraudulent plan the said The Shiloh Baptist Church, Incorporated, did on or about the 19th day of February, 1914, execute a mortgage to the defendant, The Ardmore Land and Supply Company, in the amount of ten thousand ($10,000) dollars, which mortgage was in express terms given only for the purpose of raising money to complete said building, from its stage of completion to which it had been brought by your orator to that of a fully completed building, which mortgage has been previously filed in the above entitled case and is prayed to be taken and considered a part of this supplemental bill of complaint, and that on the 19th day of February, 1914, the said, The Ardmore Land and Supply Company, assigned by short assignment, the said mortgage above mentioned to The Manufacturers and Merchants Company, a copy of which ³²⁰ assignment has heretofore been filed in this case and is prayed to be taken and considered as a part of this supplemental bill of complaint.

That said mortgage of. ten thousand ($10,000) dollars is given to complete a building which your orator estimates, as is shown above, will cost less than five thousand ($5,000) dollars;” that this mortgage made no provision for paying the complainant the amount due it for the work done, and that the equity of redemption is grossly inadequate to pay the complainant and other creditors, and that said mortgage was executed after the original bill had been filed, and that the mortgagee and its assigns have taken their title pendente lite, and that the title depends upon the result of this case. It is further alleged that the church is totally and absolutely insolvent and has admitted its insolvency to the complainant, and that the giving of the mortgage to The Ardmore Land and Supply Company was in fraud of the complainant’s rights; that all construction work on the building had ceased, and the building was in an uncompleted state, and if allowed to remain in that condition would greatly deteriorate, and that there is no one in charge of the property. The relief prayed for was: 1. That The