Maus v. McKellip

Robinson, J., delivered the opinion of the Court. In a mortgage executed by Jacob Erb and -wife, to secure the payment of seven thousand dollars, the mortgagor, Jacob, covenanted not only to pay the mortgage debt on a day therein named, but also the costs of drafting and recording the mortgage and “ all counsel fees and costs that the said John Mans may he put unto in collecting the debt aforesaid, or in releasing this mortgage.” Upon a bill filed in the Circuit Court for Carroll County, by the said Maus, mortgagee, to foreclose the mortgage, a decree was passed and a trustee appointed to sell the mortgaged premises. Afterwards, Erb, the mortgagor, applied for the benefit of the Bankrupt Act, and his assignees applied to the District Court of the United States in Bankruptcy to enjoin the appellant and the trustee appointed under the decree of the Circuit Court for Carroll County, from selling the mortgaged property. The appellant employed additional counsel to resist this application on the part of the assignees in bankruptcy, and for the professional services thus rendered was obliged to pay the sum of two hundred dollars.

The mortgaged property was sold by the trustee under the decree of the Circuit Court for Carroll County, and upon the distribution of the proceeds of sale in that Court, the above fee of two hundred dollars, together with the sum of $457-47, being five per cent, commissions paid by the mortgagee to his solicitor for collecting the mortgage debt, were allowed in the audit. Upon exceptions filed by the assignees in bankruptcy, these claims were disallowed by the Court below, from which ruling and the final order directing distribution of the amounts thus allowed to the assignees in bankruptcy, this appeal was taken. The question, then, is whether the mortgagee, nowoippellant, is entitled to an allowance of these claims under the mortgage. In support of the ruling below, the appellees contend, 1st, That the claims thus disallowed are not within the ²³⁶ terms of the mortgage; and, 2ndly, that if within the terms, they are excluded by section '2, of Article 64 of the Code.

This section, which is a codification of the Act of 1825, chap. 50, provides that, “No mortgage or deed in the nature of a mortgage, shall be a lien or charge, on any estate or property for any other or different principal sum or sums of money than the principal sum or sums that shall appear on the face of such mortgage, and be specified and recited therein, and particularly mentioned and expressed to be secured thereby at the time of executing the same; this not to apply to mortgages to indemnify the mortgagee against loss from being endorser or security.” In the matter of the estate of Notley Young, 3 Md. Ch. Dec., 461, the late Chancellor held, that under the Act of 1825, no allowance could be made for charges and com'missions, although the deed or assignment in that case provided for the payment of the same. The decision of the late Chancellor is. justly entitled to great weight, but in regard to the Act of 1825, after a careful examination of the same, we are obliged to differ with him in the construction thus placed upon it. In Cole, trustee, vs. Albert & Runge, 1 Gill, 423 , the construction and purposes for which the Act of 1825 was passed, were fully considered by this Court.

In that case the mortgage was to secure the mortgagees to the extent of $10,000. It appeared in evidence, that, at the time of its execution, a much less sum was due from the mortgagor, but that the mortgagees were responsible for other sums on account of the mortgagor, and that it was the intention of the mortgagor, as shown upon the face of the mortgage, to protect them to the amount of the $10,000, mentioned as the consideration. The Court held the mortgage was a valid security to the amount of $10,000, because that sum being mentioned in itj no one could be deceived or prejudiced. “The design of the law-makers,” says Judge Archer, ²³⁷ “in the passage of the Act of 1825, chap. 50, was to prevent liens on property to the prejudice of creditors, for amounts and claims never