Solomon Glass v. Third National Building & Loan Ass'n

Sloan, J., delivered the opinion of the Court. This is an appeal from an order of the Circuit- Court of Baltimore City dismissing the exceptions of the appellants to the auditor’s account distributing the proceeds of a sale under a mortgage made by the appellants to the appellee. The Modern Realty Corporation was the owner of a lot of ground and premises known as No. 4131 Dalrymple Avenue in Baltimore. By agreement made November 16th, 1923, it sold the lot to Solomon Glass, one of the appellants, at the price of $10,000, in the event that the title should be taken in fee simple, or at $8,200 if title should be taken subject to an annual ground rent of $108; the purchaser paying $100 cash at the signing of the agreement and agreeing to pay the additional sum of $400 on the date of settlement, to give a note for $500 to be payable with interest six months after the date of settlement, “and the balance between this payment of cash and interest and the purchase price, the party of the first part, the Modem Realty Corporation agrees to- finance for the second part so that the party of the second part will not be required to- pay in any more money than herein specified on account of the purchase of the -aforementioned property; and the financing will be so arranged that the party of the second part will only be required to pay approximately $20 per week to take care of the payments- -on any mortgage or mortgages which may be obtained by the party of the first part on such advances. .The party of the first part has the option of financing the same by creating a ground ²⁸ rent of $108, and upon completion of the above arrangements for the financing of the aforesaid property as hereinbefore set forth, thei party of the first part will transfer title to the aforesaid property by a good and merchantable title to the party of the second part, it being understood that the word “expense” in this instance shall not mean expenses in connection with securing the proper financing or creation of the ground rent on the aforesaid property, but it means such expenses as attorney fees, recording, insurance, etc.” In pursuance of this agreement a first mortgage was given to the Clifton Savings Bank for $3,100 — the record does not show by whom — which is not involved in this proceeding, and a second mortgage was made by Solomon Glass and his wife, the appellants, to the Third Fational Building & Loan Association for $3,400, and it is the distribution of the fund arising from the foreclosure of the latter mortgage which is involved in this case, and particularly the sum of $615, which is included in the memorandum of settlement between the appellee and the appellants as an “entrance fee,” the appellants contending that this sum was ai usurious charge made by the appellee against the appellants, and the appellee contending that this was a charge paid the appellee by the Modem Fealty Corporation for financing the mortgage loan from the appellee to the appellants.

It appears that the purchaser, Solomon Glass, chose to take the property subject to a ground rent of $108 per year, so that he purchased the leasehold estate at $8,200, and that this was the gross amount under his agreement which he was required to pay for the property; and, because he was not required by the appellee to' pay $675 or any sum in addition to the purchase price fixed in his agreement with the Modem Fealty Corporation, the appellee contends that the usurious charge was not paid by him but was paid to the appellee by the Modem Building Corporation, and it being a third party to the transaction, appellants, under the decision in Chipman v. Farmers & Merchants Bank, 121 Md. 343 , could not avail themselves of the claim of usury against the appellee., ²⁹ According to the evidence the mortgage was made directly by Solomon Glass, the purchaser, and wife, to- the appellee. The appellee delivered to Emmanuel Gorfine, appellee’s attorney, its check for $3,400 payable to tbe order of Solomon Glass and wife. Gorfine remitted to the appellee the sum of $675, “which was its bonus, charge for making the loan of $3,400,” and thereafter the appellee collected in the regular way from the appellant on the basis of a loan of $3,400. 1'n addition to this the record shows that the appellee deducted $35 for title examination, $3 for president’s fee, $5 for recording and $.68 for revenue stamps, so that the mortgagor paid all the expenses of the loan in addition to the bonus. It is time that Solomon Glass agreed to, purchase this leasehold property for $8,200, and that his, liability under that contract was not increased except for interest and dues of the building association, and, if we were not at liberty to make any further inquiry into the transaction than the agreement of purchase shows, there could be no, other conclusion than that, because the appellant’s obligation under tbe agreen ment of purchase has not been increased, tbe appellee’s contention would ho sound.

But this court, speaking through Judge Parke in