Miller v. Mitnick

Adkins, J., delivered the opinion of the Court. On July 21st, 1931, appellant became the purchaser at $12,000 of certain leasehold lots Eos. 708, 710, and 712 Eorth Calhoun Street and 1400 Rice Street, Baltimore, at a foreclosure sale under a mortgage from the Dollar Dry Cleaning Company, Incorporated, to Eleazer Winakur, and deposited $3,000 on account of purchase money. The mortgage debt was about $6,500. Immediately after the sale, on the same day, appellant took an assignment from his brother-in-law, Edward E. Kaplan, of a second mortgage from the said mortgagor to Kaplan for $45,000.

After the publication of the usual order nisi, the sale was finally ratified on August 24th, 1931, no exceptions having been filed. On August ¹¹⁵ 10th, 1931, Robert J. MacGregor, receive]- in bankruptcy of the said mortgagor, filed a petition asking the court to pass an order directing the auditor to allow petitioner the surplus proceeds of sale, which order was passed subject to the usual exceptions. On September 1st, 1931, Isidor Miller filed a petition alleging that he was the holder of said second mortgage, and as such entitled to the surplus proceeds of sale over the balance due on tbe first mortgage, and prayed the court to pass an order modifying the previous order passed on the receiver’s petition, and directing the auditor to allow Miller the surplus proceeds of sale, on which an order was passed as prayed, subject to the usual exceptions. On September 4th, 1931, the receiver filed exceptions to the order signed on Miller’s petition, alleging that said second mortgage filed by Miller was fraudulent and was made in fraud of the creditors of the mortgagor, and that the assignment thereof to Miller was fraudulent and was made in fraud of said creditors, and praying the court to strike out and rescind the order passed on 'Miller’s petition, and to make absolute the order passed on the receiver’s petition.

On September 15th, 1931, Louis Mitnick, the trustee in the foreclosure proceedings, filed a petition for resale of the mortgaged premises and chattels, on which an order nisi was passed, whereupon Miller and his counsel came into court and stated to the court that Miller would not consummate the sale. O21 September 29th, 1931, the court passed an order directing the said trustee to resell, at the risk and expense of Isidor Miller, former purchaser, the said mortgaged premises and chattels, “Isidore Miller, and his counsel having been present 121 open court and stated that the said Isidore Miller would not consummate the sale made to him.” Accordingly, under said order, the trustee advertised the property for resale at paiblic auction “at the risk and expense of Isidore Miller, former purchaser” on October 26th, 1931. At said sale the chattels were sold separately piecemeal, and were reported by the trustee as having been sold for $3,-4-73.25, and the sale was finally ratified. The four leasehold lots were reported as sold to Matilda Stevens for $5,650. ¹¹⁶ Exceptions were filed by the purchaser on the ground that at the time of sale the attorney and agent of the purchaser questioned the trustee about whether or not the ground rent to which each of the four lots was subject was redeemable or' irredeemable, and was told by the trustees that each of them was redeemable, and that the purchaser bought the lots relying on the representation; that on an examination of title it was found that three of the rents were irredeemable.' The chancellor on December 11th, 1931, sustained the exceptions and set aside the sale.

On December 30th, 1931, Isidor Miller, the appellant, filed a petition, in which he recited the foreclosure sale on July 21st, 1931, at which he became the purchaser of the leasehold property and chattels advertised; that after said sale petitioner was advised that of the items sold several were missing; that petitioner advised the trustee after the sale that he would not take the property and called upon him for a return of his deposit, which the trustee declined to return; that thereafter the trustee, without authority and without right in law or equity, proceeded to resell said property and sold the same on October 26th, 1931; that subsequently the purchaser at the resale excepted to the ratification of the sale, and on said exceptions the sale was set aside; that on or about December 22nd, 1931, petitioner learned that the leasehold properties which were included in said sale, Eos. 708, 71,0, and 712 Eorth Calhoun Street, were subject to irredeemable ground rents, and also that said properties