Warfield v. Christiansen

Delaplaine, J., delivered the opinion of the Court. In 1950 Clarence M. Christiansen, trustee for Harry S. Christiansen, purchased from H. Deets Warfield and wife a tract of about 53 acres of land in Carroll County. There has been a mortgage for $3,500 on this property since 1922, but no interest has been paid on it for more than 20 years, and the Warfields considered that the mortgage was no longer a lien on the property. Christiansen, however, demanded that the sum of $4,000 be withheld in escrow as an indemnity against any loss by reason of the mortgage, and thereupon instituted this suit in equity for a declaratory decree determining whether the mortgage is a lien on the property. ²⁵⁶ The links in The chain of title are as follows: (1) On December 20, 1922, Dorsey B. Stout and wife, of Mount Airy, executed a purchase money mortgage on the property for $3,500, payable to Oscar R. Hood two years after date, with interest at 6 per cent.

(2) Hood, the mortgagee, died in February, 1924, and his will was probated by the Orphans’ Court of Carroll County on March 3, 1924. The will directed that the residue of his estate be divided into two equal parts, the income from the first part to be paid to his daughter, Sarah Elizabeth Hood, until she shall reach legal age, when this part shall belong to her absolutely; the income from the second part to be paid to his widow, Annie M. Hood, as long as she shall live, and at her death the income to be paid to his daughter as long as she shall live, and at her death this part shall belong to “the heirs or children” of said daughter, but in case of her death without issue, then this part to belong to the nearest heirs of the testator. (3) In accordance with Hood’s will, his executrix, in her administration account filed on July 21, 1925, distributed half of the residue to her daughter and half to herself, her half including the mortgage note for $3,500 payable by the Stouts on December 20, 1924. (4) In 1927 the Stouts moved from Carroll County, Maryland, to Cumberland County, Virginia.

On December 22, 1928, they conveyed the property to Mrs. Hood. Their deed contains the following provision: “This conveyance, however, is made subject to a certain duly recorded mortgage, executed by Dorsey B. Stout and Gertrude Grace Stout, his wife. The party of the second part, by the acceptance of this deed, does hereby assume the said mortgage and relieves the parties of the first part from the payment theréof and all obligations thereunder.” (5) Upon the death of Mrs. Hood intestate on July 27, 1933, the property passed by descent to her daughter. ²⁵⁷ (6) In May, 1942, the daughter, under the name of Sue E. Denny, and her husband, David Denny, conveyed the property to Bertram B. Starkie and wife. (7) In December, 1947, the Starkies conveyed the property to the Warfields.

(8) On October 18, 1950, the Warfields conveyed the property to complainant. The bill named as defendants the Warfields, Fred A. Brown, administrator d. b. n. c. t. a. of Hood’s estate, and Hood’s daughter, known as Sue E. Denny and Sue E. Saltzman, a non-resident of the State of Maryland. After Brown was returned mortuus, the Orphans’ Court appointed Stanford I. Hoff substituted administrator d. b. n. c. t. a. The Stouts testified that when they conveyed the property to Mrs. Hood in December, 1928, it was understood that they “were turning it back to her in satisfaction of the mortgage.” They further testified that they had not paid any interest on the mortgage since that time.

The Court, assuming jurisdiction of the trust created by Hood’s will, decreed that, upon the death of Mrs. Hood, her daughter was entitled to the interest from the trust estate, but when she conveyed the property to the Starkies, she became estopped from claiming interest. The Court declared in the decree that the mortgage is a lien on the property and the mortgage debt is not barred by limitations. The Court ordered the costs of suit to be paid out of the trust estate. The Warfields have appealed here from the decree, but no appeal was taken by complainant, as he is protected by the indemnity deposit.

First, appellants contended that the mortgage was extinguished by the deed of the equity of redemption from the Stouts, the mortgagors, to Mrs. Hood. Generally, the acquisition of the