Mayor of Baltimore v. Whittington

McShkrry, J., delivered the opinion of the Court. By section 41, of Article 49, of the Municipal Code of Baltimore City, it is enacted, in substance, that when any lots of ground are chargeable with the payment of taxes, and are subject to ground rents or leases for terms of years, renewable forever, the collector shall, in the-sale of such lots for non-payment of taxes, first sell only the leasehold interest, if it should sell for an amount sufficient to pay the taxes, but, if it should not, then that he shall sell the whole fee simple estate, provided these provisions “shall not apply to cases where the books of the city do not disclose the fact that the lot of lots are on lease as aforesaid, or unless the collector shall have actual notice of such lease prior to the sale thereof.” The city tax collector of Baltimore sold in March, 1891, for the non-payment of State and city taxes, the fee simple estate in a lot of ground on Druid Hill avenue, and the Mayor and City Council became-the purchaser. The sale was reported to the Circuit Court of Baltimore City, and was ratified in May, 1892. In October following, the city, through and by its comptroller, sold the lot to Clarence M. Ellinger, to whom it was thereafter conveyed.

When the sale was made by the collector, the lot was subject to a lease for ninety-nine years, renewable forever, which was owned by J. Henry Weber, and the reversion or fee was owned by the appellee, Whittington. The unpaid taxes were due by the owner of the leasehold estate, but the collector sold the whole fee without having first offered, or having ²³⁴ attempted to sell, the leasehold as required by the section of the City Oode to which reference has been made. There was no entry on the books of the collector showing that the lot was subject to a lease, and the single question involved in the case is whether, when the collector made the sale, he had “actual notice” of the existence of the lease. If he had, the sale was irregular.

If it was irregular, the decree of the Circuit Court of Baltimore City restraining by injunction the Mayor and City Council and its grantee, Ellinger, from disturbing the possession of the owner of the reversion, must be affirmed. It appears by the record that in 1883 proceedings were instituted in the Circuit Court of Baltimore City by Rebecca and Mary McKeen against J. Henry Weber for a sale of this same leasehold estate under a mortgage thereon, executed by Weber in 1881. Mr. T. Wallis Blakistone was appointed trustee to make the sale. He took possestion of the property, and collected the rents and profits, but owing to a depreciation in its value made no sale of it; In the meantime the ground rent was regularly paid to the appellee up to July, 1892, but the State and city taxes for the eight years beginning with 1882 remained unpaid.

On the first day of December, 1890, Lewis N. Hopkins, city collector, filed a petition in the foreclosure proceedings representing that taxes for the years just mentioned were in arrear upon the property “decreed to be sold.” The petition further stated that the collector was unable to enforce the collection of those taxes by reason of the pendency of the foreclosure proceedings, and it prayed that the trustee might be required to pay the taxes out of the rents theretofore collected from the property, or that the collector might “be allowed to proceed to collect said taxes by sale of the property in the ordinary way.” This petition was signed by the late Mr. W. A. Hammond, ²³⁵ "“City Solicitor, Attorney for Petitioner,” and was sworn to by the deputy city collector.. Subsequently, an order was passed requiring the trustee to pay the taxes within five days, out of the funds previously collected by him ££as rents from the property decreed to be sold,” and directing, upon his failure to do so, that the property he •sold in the ordinary way by the collector. The trustee did fail to pay the taxes, and the collector made under authority of this order, the sale of March, 1891, already mentioned. It is upon these facts that the appellee relies to show that the collector had ££ actual notice ” of the existence of the leasehold estate.

Notice is of two kinds,— actual and constructive. Actual notice may be either express or implied. If tiie one, it is established by direct evidence, if the other, by the proof of circumstances from which it is inferable as a fact. Constructive notice is, on the other hand, always a presumption of law.

Express notice embraces not only knowledge, but also that which is communicated by direct information, either written or oral, from those who are cognizant of the fact communicated. Wade on Notice, sec. 6. Implied notice, which is equally actual notice, arises where the party to be charged is shown to have had knowledge of such facts and circumstances as would lead him, by the exercise of due diligence, to a knowledge of the principal fact. 16 Am. & Eng. Ene.

Lato, 790. Or, as defined by the Supreme Court of Missouri, in Rhodes vs. Outeali, 48 Mo., 370 , “a notice is regarded in law as actual when the party sought to be affected by it knows of the particular fact, or is conscious of having the means of