Stirling v. McLane

⁴⁸ Pearce, J., delivered the opinion of the Court. The appeal in this case is from an order of the Circuit Court for Baltimore County, as a Court of equity, overruling exceptions to the ratification of á sale of mortgaged premises made under a decree of said Court, and finally ratifying said sale. The mortgage debt was $16,000, with interest due at time of sale for eleven months, and the State and county taxes for 1903 and 1904. were also due and unpaid, all aggregating near $17,250. And the mortgaged premises comprised fifty-four aces of land situated in the Green Spring Valley in Baltimore County on the Garrison Forest road, improved by a good dwelling-house, gardener’s house, barn and other outbuildings.

The decree was passed April 26th, 1905, appointing H. Oliver Thompson and George Whitelock, trustees to sell, the terms of the safe being one-third cash, one-third in six months, and one-third in twelve months, or all cash at the purchaser’s option; the decree also authorized the trustees to report to the Court in their discretion any offer received for the purchase of the property or any part thereof, and pending sale, to rent the property or any part thereof in their discretion. The trustees advertised the property according to the requirements of the decree, and on May 29th, 1905, at the Court House door in Towson, sold the same as a whole to James L. McLane, the highest bidder therefor, for the sum of nineteen thousand dollars., Eight judgment creditors of the mortgagors were made parties defendant to the proceedings, whose claims. aggregated near $6,000, but none of these joined in the exceptions filed by the mortgagors, George Howard Stirling and Mary Stirling, his wife, nor filed any exceptions in their own behalf. The exceptions of the mortgagors were: 1st. That the price obtained was grossly inadequate.. 2nd.

That it was offered only as a whole and so sold, whereas it was susceptible of division into smaller tracts or parcels, and if so divided, the several parcels could have been advantageously sold, and a much.larger price realized. 3rd. That it should have been sold* on the premises in the vicinity of which resided most of those likely to become pur ⁴⁹ chasers for such property, and that Towsonwas an inconvenient place for many who desired to attend the sale. 4th. That the plat shown by the trustees at the sale was defective and misleading, and did not give purchasers a fair impression of the property. 5th. That the sale was badly announced, as persons who were in attendance were not clearly informed that it was taking place, or what was being sold. 6th.

That more land was sold than was necessary to pay the mortgage debt and costs, and 7th. That the sale was not made in accordance with' the requirements of the decree. Considerable testimony was taken, but it related exclusively to the objection that the tract should have been subdivided,, and offered in parcels before offering it as a whole. This testimony of course indirectly involves the consideration of the first and sixth exceptions, relating to the inadequacy of price, and the sale of more land than was necessary, but there was absolutely no testimony tending to sustain the other exceptions, the plat shown by the trustees at the sale not even being included in the record or alluded to, and these exceptions therefore need not be considered.

It has been settled by repeated decisions in this State that “a trustee is bound, for the protection of the interest of all the parties concerned, to bring the property into the market in such manner as to obtain a fair market price; he must exercise the same degree of judgment and prudence that a careful owner would exercise in the sale of his own property, and in doing that he should consider the best mode of offering the property, not only as to whether it was advisable to offer it in-lots or parcels,obut also as to the proper location and outlines of each parcel.” Carroll v. Hutton, 88 Md. 679; Thomas v. Fewster, 95 Md. 449 , and cases there cited. These principles are founded in justice and humanity, and their application has. been not infrequently required, to restrain the careless exercise or ábuse of authority, and sometimes the malevolence or rapacity of its possessor. But as was said in Bank of Com ⁵⁰ merce v. Lanahan, trustee, 45 Md. 410 : “Bad faith or negligence on the part of the trustee will not be presumed, but, on the contrary, the presumption is that he has discharged his duty faithfully, and that presumption prevails until it is made to appear otherwise by those seeking to impeach the sale. Sales like the present are not to be impeached by slight circumstances.

It requires good and substantial grounds to justify the Court in_ setting them aside, when regularly made; for otherwise all confidence in their performance and security would be destroyed, and the public would be loth ever to bid for property thus offered. Where a stranger or third person becomes the purchaser in good faith, something more than a mere offer of a higher price must appear to induce a resale; such as fraud or misconduct of the master, or other person having the control of the sale, or surprise upon the party interested, or his having been misled as to the time and place of sale.” It is in the light of these principles that the evidence adduced in cases of this character must be considered. Several witnesses were examined for the exceptant. Of these, Mr. Disney was a surveyor of large experience, who was familiar with this property, and who, subsequent to this sale, at the request of the mortgagor, Mr. Stirling, subdivided this tract into seven parcels.

He testified that in his opinion the tract should have been offered in parcels as shown in the accompanying plat, and that a much better price could have been thus obtained than by a sale as a whole. Under his plan of division, Lots 4, 5, 6 and 7 front on Garrison Forest road an improved public highway, and contain respectively 4x/i, 7%, 4% and iji acres, No. 5 being improved by a commodious dwelling and good outbuildings, and No. 4 having on it a suitable house for a gardener and a barn. Lot No. 3 contains io}i acres, lies in the rear of Lots 4, 5, 6 and 7 with a narrow front on a road leading from Garrison Forest to Chattolanee. No. 2 contains 107^ acres, all woodland, adjoins no road whatever, and has no outlet except over a proposed right of way running over Lot No. 3 for its whole ⁵¹ length, and connecting with the Chattolanee road just mentioned.

No. i contains 13^ acres, adjoins No. 2,but adjoins no road, and is reached by a private road belonging to Mr. Stirling, now constructed between the Baldwin and Oliver properties shown on the plat, for the use of the Thompson property, and reserved, but not yet constructed over the Thompson poroperty up to the line of Lot No. 1. There are no improvements on Lots 1, 2, 3, 6 and J: Upon Lot No. 2 there is a large spring upon which the buildings upon Lots 4 and 5 depend for their water supply. Upon cross-examination Mr. Disney said that upon the Reistertown pike, near the extreme western end of the Green Spring Valley, people asked for small lots, but he admitted that in the immediate vicinity of this property and generally in that part of the valley, he knew of no demand for small lots; that most of the residents were large holders of land, and instead óf selling off lots were adding to their holdings. The testimony showed that this is due to the fact that in that section of the valley most of the land is owned and occupied as residences by persons of large wealth, who either do not care to sell at all, or who refuse to sell except to those whom they regard as desirable acquisitions to the social colony which has been established there.

It is obvious that these considerations must discourage and operate to deter persons of moderate means from settling in that immediate neighborhood, and must tend to limit competition among purchasers to those who can afford to hold large areas of unimproved land, until there is a demand for it from those of equal wealth. Mr. Disney was asked if his subdivision of this property was made to meet any present demand for small lots, and his answer was, “not that, but to fix it for people to come in that neighborhood,” and when asked if this was not in the nature of an experiment, he replied, “I would like to see the experiment, tried.” Mr. Linton, a broker of some experience, and acquainted with that neighborhood, thought it was bad judgment to offer the fifty-four acres as a whole, and said that in his opinion, ⁵² Lot i ought to bring at a forced sale $2,700; Lot 2, $3,000; Lot 3, $3,000; Lot 4, $3,000; Lot s, $10,000; Lot 6, $2,000; Lot 7, $1,000; aggregating $24,700. He said that in the fall of 1904 he had offered Mr. Stirling $17,000 for Lots 3, 4, 5, 6 and 7 with the right to use the spring on Lot 2 for an unlimited water supply to Lots 3,4, 5, 6 and 7, but without any right of way for Lot 2 over Lot 3 as shown on Mr. Disney’s plat. It will be observed that this offer is $2,000 less than the valuation put by him on these lots as separate parcels, without the valuable water rights required in his offer, and free from the right of way for'Lot 2 over Lot 3.

How much the value of Lot 2 would be diminished by the imposition of these water rights as affecting the safety of the supply for Lot 2 and by leaving it without any outlet to a highway, does not appear from the testimony, but it is plain that purchasers would take it into serious account, and when a reasonable deduction is made from Lot 2, for that reason, there