Riverside Brick Co. v. Wheatley

Briscoe, J., delivered the opinion of the Court: The object of the proceeding in this case is to have two mortgages from one of the appellees to the appellee Conway vacated and declared void, as being in fraud of creditors and to subject the land described in them to the payment of the appellant’s claim. It is alleged by the bill that the appellant, the Riverside Brick Company, a body corporate, of the city of Baltimore, on or about August 27, 1898, sold and subsequently delivered a certain quantity of bricks, at the price of $1,843.12, to be used in building houses on the mortgaged land ; that the sale was made to one George A. Mueller, lessee of the appellee, Wheatley, upon an agreement in writing that Wheatley would pay for them on demand if Mueller should refuse to do so; ⁴¹¹ that the sale was made upon a representation by Wheatley that he was the owner in fee of the land, it having been conveyed to him by the defendant Conway, by deed dated and recorded contemporaneously with the lease to Mueller, that there was no incumbrance upon the record, and the appellant had no knowledge of any at the time of the sale of the bricks. It is further alleged that the appellant subsequently ascertained that on the 29th of August, 1898, a mortgage upon this property had been executed by Wheatley to Conway to secure an indebtedness of $3,500, but the mortgage was not recorded until September 19, 1898; that on the 1st day of October, 1898, a second mortgage on the same land was executed by the same parties to secure an additional indebtedness of $2,500, and the latter mortgage was never recorded until November 5, 1898. It is then averred that the first mortgage was purposely withheld from the records to enable the defendant Wheatley to deceive by false representation, and that the consideration mentioned in the second mortgage is false and was given as a part of a scheme to defraud.

The prayer of the bill is that the two mortgages be declared fraudulent and void and be set aside, and the land be subjected to the payment of the appellant's claim. There is also a prayer for general relief. Subsequently, on the 22nd of March, 1899, John H. Morgan was made a party defendant, and in his answer to the bill admits the execution of the first mortgage, but insists that he is a bona fide holder for value before maturity of this mortgage, without notice of any fraud or irregularity, and that he is entitled to have his rights protected by the Court. After answer by the other defendants denying the allegations of the fraud, testimony was taken on both