New York Security & Trust Co. v. Davis

Briscoe, J., delivered the opinion of the Court. This proceeding was instituted in the Circuit Court for Howard County, sitting in equity, to- foreclose a mortgage dated the 10th day of March, 1871, to secure a loan of $11,000, and executed by William Davis and others, defendants, to Caroline E. Parks, of the State of New York, execu ⁸⁵ trix of Charles E. Parks, the predecessor in the trust, of the appellants. The defendants answered the bill and on the 20th of February, 1 goo, upon the written assent of the defendants, a decree was passed directing the mortgaged property to be sold, and the money arising on the sale to be brought into and to be distributed under the direction of the Court. The property sold for the sum of twelve thousand and fifty dollars, and the sale was duly ratified on the 15th of September, 1902.

There were two audits filed in the case. The first was stated according to the contention of the appellants, and showed a deficit of $2,023.86, due the trustees, after applying the proceeds of sale, and the allowances for costs and expenses of sale. On the 14th of May, 1901, the appellee, Wm. Davis, filed exceptions to the first audit, stating that the charge of interest at the rate of seven per cent, as set forth in the mortgage is usurious, and having paid interest on the mortgage at the rate of seven per cent for ten years, he is entitled to have the payments made by him in excess of the legal rate of interest, according to the law of Maryland, credited as of the time of the payment upon the principal of the mortgage debt.

An answer was filed by the appellants to these exceptions, in which among other things the defense was relied upon, “ that the mortgage notes in the case being contracts intended by the parties thereto to be executed and performed in the State of New York, their validity as regards the rate of interest to be paid must be determined by the laws of the State of New York in force at the time the notes were made, and that the legal rate of interest in the State of New York at that time was seven per cent per annum.” On the 8th day of April, 1902, the exceptions filed to the ratification of the auditor’s account by the appellee were sustained and a new account was directed to be made. On the 28th day of June, 1902, the exceptions to the second audit were overruled and the account having been finally ratified and confirmed this appeal has been taken. There can be no question that under the evidence disclosed by the record that the contract sought to be enforced in this ⁸⁶ case, is a Maryland contract and must therefore be construed' according to our Maryland law. The original agreement for the sale of the property which is located in Howard County, Maryland, and which is signed by a Maryland agent is to the following effect: Jany. 10th, 1871. ‘ ‘ Received from William Davis and Samuel E. Davis the sum of one hundred dollars being so much paid on account of the purchase of the village of Marriottsville containing about 207 acres of land in fee-simple except one lot subject to ground rent of thirty dollars a year; which I as agent of Robert Seaman have sold to the said William and Samuel E. Davis