Shipley v. Fox

Irvine, J., delivered the opinion of the Court. On the 15th of June, 1885, Caleb C. Merritt executed to Moses Fox, the appellee, a mortgage -upon certain property to indemnify and save him harmless from all loss and damage that might befall the mortgagee by reason of his entering security for the mortgagor in a bond to dissolve a certain attachment proceeding in the ⁵⁷⁴ Superior Court, of Baltimore City against Merritt at the suit of one Andrew Saks. Judgment was obtained against Merritt, the mortgagor, in the attachment suit, and the mortgagee, Moses Fox, was compelled to. pay, and did pay, on account thereof the sum of thirty-three hundred and twelve dollars, and seventy-two cents, ($3312.72) and filed his bill upon the mortgage of indemnity, to obtain a sale of the mortgaged property, for his reimbursement. From the decree of the Circuit Court of the City of Baltimore directing the payment to Fox of this sum, which he paid for Merritt in the attachment suit, and, in default of such payment, directing the sale of the property mortgaged, this appeal was taken.

At the time of the execution of this mortgage to Fox there were two prior mortgages from Merritt, resting on the same property. One of these-mortgages, was in favor of Hall and Brehme, dated 2nd of May, 1884, to secure a loan of $2000 ; and'the other was dated August 22,1884, and was executed to Charles. Shipley and wife, administrators of. Joseph Merritt, indemnifying them against a certain attachment of Moses Fox against Caleb C. Merritt, and a judgment of one-Andrew Hoffman against Caleb C. Merritt.

On the 28th of, September, 1885, Caleb C. Merritt and wife conveyed to Ida Shipley, wife of Charles Shipley, all his (Caleb C. Merritt's) real estate including the portion thereof covered by the mortgages above recited, and they being made defendants in the suit, of Moses Fox for the foreclosure of his mortgage of indemnity, have appealed from the decree in favor of the appellee. All these conveyances the hill set out.' The appellants had set up in defence an assignment of the Hall and Brehme mortgage to them, dated the 28th of September, 1885, and this mortgage the decree-had declared cancelled and paid. They had also set up a claim for money paid by them on the Hoffman ⁵⁷⁵ judgment, against Merritt, for the payment of which the Court in its decree made no provision. They also contended that Fox was estopped from setting up his indemnity mortgage; and, that if he was not estopped, they were entitled to a large credit thereon.

The same contentions are pressed in this Court as grounds of error, and we will consider them seriatim. 1. Proceedings having been instituted for foreclosure under the Hall and Brehme mortgage, and decree for sale obtained, Merritt and his counsel applied to the appellants to assume its payment until certain property of the mortgagor, Merritt, could be sold. Negotiations were then pending for the sale of certain property on Paca street, wherein Merritt had one-fourth interest, his uncle owning one-half, and his sister, Mrs. Shipley, the other fourth. Shipley agreed to make such advances as were necessary to stop the sale under decree of Hall and Brehme for foreclosure, and was to be reimbursed out of the sale of the Paca street property as far as it would go; and to protect him in so doing, he was to have an assignment of the Hall and Brehme note.

This was the understanding entered into by Merritt and his counsel with Shipley and his counsel. Accordingly on the 24th of August, 1885, Shipley gave his check lor 8214.30 to D. S. Briscoe, attorney of Hall and Brehme, the amount needed to pay costs, &c., and secure a stoppage of the sale under the foreclosure decree. In a few days thereafter, viz., on the first day of September, 1885, the negotiation for the sale of the Paca street property was concluded, and the same was conveyed to Griffith and Turner, who paid Shipley not only his wife’s share of the purchase money, but also Merritt’s share thereof, which, according to the proof, was to be 82000; Merritt, having assented to the sale on the condition he was to have $2000 clear. On the third of September, 1885, Shipley paid D. S. Briscoe, ⁵⁷⁶ attorney of Hall and Brehme, $2003.00, the amount of their claim; and on the same day Briscoe filed .an order of satisfaction, of the claim and decree, on the Court record of it; but the same was not in statutory form, which requires the same to be executed by the mortgagor, and in a certain way.

Merritt’s interest in the Paca street property received by Shipley did not pay the Hall and Brehme mortgage, including costs, by $277.30, if Merritt was to receive $2000.00 net for his interest, as we think he was ; and according to appellants’ contention it failed to pay by $332.23, allowing him only $1945.07 for his share of the Paca street property. Whichever was the true amount of deficiency, we think it clear that it was fully paid in some subsequent transaction between the parties. On the day of the final payment by Shipley of the Hall and Brehme mortgage, viz., on the 3rd of September, 1885, Merritt gave Shipley his due bill for $374.44. Merritt testifies that this due bill was for previous advances on account of the Hall and Brehme mortgage, and nobody testifies to the contrary.

Still the appellants contend it was not given for those, advances, but for something else, and they rely upon the fact, that the due bill is for a different amount from- that actually paid Mr. Briscoe on the 24th of August, preceding the final payment of that claim which was $274.30. If it did not include the payment of costs, commissions, &c. to Bricoe, Mr. Shipley could easily have so testified, which he did not do. His failure to do so creates a strong, presumption in favor of the verity of Merritt’s testimony. Without doubt, the due bill does include something else 'besides the first advances paid Briscoe to stop the sale; precisely what that was we do not know; but it was both reasonable and natural, that all the then outstanding indebtedness of Merritt should he included, and Barnes testi ⁵⁷⁷ lies that Shipley was reluctant to make this advance, because some prior advances had not been repaid him by Mr. Merritt,'when this loan was requested.

Barnes, in his testimony sustains Merritt, for he says a due bill was given, he thought, for about $375, or thereabouts. The tíme when the due bill was given supplies a strong presumption that it included the advances about the negotiation and business then finally concluded. It is not likely that, on the very day when this business was finally fixed, advances over and above receipts from the Paca street property sale would be forgotten ; and only advances at other times, and for other purposes would be closed by note, omitting the later advances. Taken in connection with the testimony of Merritt and Barnes, we cannot have the slightest doubt that this due bill did include the payment first made to Mr. Briscoe.

The possession of the due bill, and its production by Merritt, is evidence of its payment, independent of his testimony about it. How it was paid, whether in a subsequent sale of property to Mrs. Shipley or otherwise, is wholly immaterial. We think the Court below was fully justified in finding all indebtedness of Merritt on account of the Hall and Brehme mortgage was fully paid, and with Merritt’s money. The contention that, notwithstanding this Hall and Brehme mortgage, which has been fully paid by Merritt’s money, can be still held under the assignment to Mrs. Shipley, in protection of her title acquired on the 28th of September, 1885, as against the mortgage of Eox which was given on the 15th of June preceding her purchase, cannot be maintained.

It is not a case for the application of the principle decided in Forbes vs. Moffatt, 18 Ves., 384, which was approved by this Court in Polk vs. Reynolds, 31 Md., 111 . Those cases only decide that where a person becomes the donee of an estate subject to a charge for his benefit ⁵⁷⁸ a merger will not be effected, if the intention he manifested to keep it alive. In this case when the original advance was made or agreed upon to stay the proceedings on Hall and Brehme's decree, as a protection in malting that advance or any other advance on the same account, Merritt did agree that the Hall and Brehme bond was to be assigned to Shipley. At that time no purchase by Shipley’s wife of the remainder of Merritt’s property was contemplated.

Merritt and his co-owners were then in treaty for the sale of the Paca street property. Griffith and Turner bought it; and Merritt’s interest therein was paid over to Shipley who paid it to Briscoe, attorney for Hall and Brehme. To that extent Shipley was the mere agent of Merritt for the payment of Hall and Brehme. He paid two thousand three dollars to Briscoe ; three dollars more than Merritt’s interest in the Paca street property, which was paid by Griffith and Turner to Shipley for Merritt.

This three dollars and the $274.30 first paid to Briscoe, would be protected by the assignment; but no more. The Hall and Brehme mortgage was paid on 3rd September, 1885. The assignment of the same to Shipley was not made until 28th of October, 1885— nearly two months after it was paid off; but supposing there was an equitable transfer of it by the delivery of the bond for the amount it secured by Merritt to whom it was delivered when paid, all that it would secure was fully paid to Shipley, and that woiild discharge it. To hold otherwise would be allowing a fraud to be wrought on Fox.

His mortgage was of record, and preceded Mrs. Shipley’s purchase of the final equity'of redemption. Fox had the equity of redemption in advance of her, and to allow her to hold an assignment of the mortgage from Merritt to Hall and Brehme prior to Fox’s, to the exclusion of Fox, when the Hall .and Brehme mortgage had been