Werner v. Clark

Pearce, J., delivered the opinion of the Court. This is an appeal from an order of the Circuit Court for Howard County, sitting as a Court of equity, ratifying a sale of mortgaged premises made under powers of sale contained in two mortgages. The record discloses the following facts. The property in question was the property of one Charles J. Werner, deceased.

After his death, intestate, his widow and six children on April 20th, 1894, united in the execution of a mortgage upon a tract of land in Howard County to Gabriella Mackubin to secure a loan to them of $1,200 payable one year after date with interest. On October 6th, 1902, the same parties, together with Louis Werner and Ethel Werner, united in the execution of another mortgage upon the same tract of land ⁶²⁸ and also upon another tract in Baltimore County, unto the German Building Association of Howard County, a body corporate, to secure a loan to them of $1,000 payable one year-after date with interest, and these two mortgages wéré subsequently duly assigned to the appellee, Louis T. Clark for foreclosure, after default made thereunder. On September ioth, 1907, the appellee filed copies of these-two mortgages together with a bond as required by law, and! advertised both said tracts of land for sale under the powers contained therein, but actually sold only the tract in Howard County. His report of sale, filed December 20th, 1907, shows that he sold this tract on December 18th, 1907, to Miss Catherine Werner for $3,850, who “elected to pay all cash on final ratification of sale, and gave satisfactory assurances of her compliance.” The report also set forth that the proceeds of this sale would be more than sufficient to satisfy both mortgages, and that for this reason the appellee did not offer the other tractifor sale.

The usual order nisi was published, and. on February 1st, 1908, this sale was finally ratified and confirmed. . .On February 24th, 1908, the appellee filed a petition alleging that the purchaser, Miss Catherine Werner, had failed to comply with the purchase and found herself unable to do so, and he prayed for an order upon her “to show cause why an order should not be passed setting aside said sale, and directing an order of resale of said property at the risk of said purchaser.”' On the same day, the Court passed an order requiring “Catherine Werner to show cause on or before March nth, 1908, why said sale made in the above entitled cause should not be set aside, and a resale ordered at her risk,” provided a copy of said petition and order be served on her on or before February 27th, 1908. ' She failed to show cause as required, and on March 20th, 1908, in due course of law, an order was passed “that the property mentioned in this cause, and sold by the petitioner, be resold by the said petitioner,_ Louis T. Clark, 'assignee, plaintiff in the above • entitled cause, for the payment of the ⁶²⁹ purchase money thereof, viz. $3,850, as reported in the rer port of sale filed December 20th, 1907, &c. and it is further ordered that said resale be made at the risk of the said Catherine Werner.” It will be observed here that this order did not, in terms, provide that said sale should be set aside as prayed in the petition, and as provided in the order to show cause. On April 24th, 1908, the appellee filed a report setting forth that in pursuance of said order of resale, he did, after due notice and advertisement, offer said property at public sale on April 21st, 1908, and sold the same to John G. Rogers for $2,800, and that said sale was made at the risk of the former purchaser, Miss Catherine Werner. The usual order nisi was again published, and on May 22nd, 1908, the day before the •expiration of this order, two of the mortgagors in each of the two mortgages, Augustus H. and Frederick A. Werner, filed ten exceptions to the ratification of this sale. . On May 29th, 1908, the appellee filed a motion to dismiss these exceptions and that a day be set for the hearing, and on the same day the Court set the motion down to be heard on June 4th, 1908, after notice to the exceptants.

The motion does not state the ground on which it was based, nor does the record disclose the ground, nor whether any hearing was had; but the appellee in his brief states that “this was upon the theory that the ex-ceptants had no standing in Court in the proceeding relating to the resale,” and there could be no other rational ground for declining to hear the exceptions. On June 4th, 1908, an order was passed “that motion to dismiss be sustained, and exceptants be dismissed,” and on the same day the resale was finally ratified and confirmed. The appeal was taken “from the order of Court dated June 4th, 1908.” The two orders of that date though separately signed, cover but one transaction, and might properly have been made effective by one signing, as they were evidently concurrent in execution. The appeal will therefore be treated as taken from both orders.

The narrow question thus presented is well stated in the ⁶³⁰ appellants brief in these words: “When property has been sold under a power in a mortgage, and the purchaser fails to comply with the terms of sale, and a resale of the property is ordered and made, has the mortgagor any standing in Court to except to the ratification of the resale?” It is conceded in the brief of the appellee, and could not reasonably have been denied, that Miss Catherine Werner, as the defaulting ptir chaser, might have excepted to the ratification of the resale, though she was one of the mortgagors, but she did not except; therefore the concrete facts as hereinbefore recited, are accurately embraced in the question framed by the appellants’ counsel, which must be taken as implying that the excepting purchaser is not one of several mortgagors, who if the sale to him were ratified, would acquire the interest of the other mortgagors in the property. The appellee rests his case wholly upon the proposition that the effect of the ratification of the original sale, was to devest absolutely the title of the mortgagors, and to vest a complete equitable title in the defaulting purchaser, and that upon ratification alone, without more, “the mortgaged real estate became personal property, and the mortgagor’s rights and interest in the former were transferred to the fund arising from the ratified mortgage sale.” It has certainly never been expressly so decided in this State, and we do not think it could be so held consistently with our decisions involving this question. Dalymple vs. Taneyhill, 4 Md. Ch. 171 , decided in 1853, appears to be the earliest case decided after thepassageof theAct of 1841, now sec. 209 of Art. 16 of the Code, declaring the authority of the Court to compel purchasers under a decree to comply with all the terms of sale, byr process of attachment or other execution suited to the case, or to direct a resale at the risk of the purchaser. In that case, land belonging to an infant had been sold under a decree for that purpose, and the sale had been ratified.

The purchaser having utterly failed to comply with the terms of sale, a resale was ordered at his risk. The infant died ⁶³¹ October 4th, 1852, and on the 12th of the same month the property was resold, and that sale was ratified. The controversy in the case was over the proceeds of this resale. The infant’s personal representative claiming the proceeds as personal property while her heir at law claimed them as real estate — the question being whether there had been a conversion from real to personal estate, at the original sale during the life of the infant.

Chancellor Johnson held there had been no conversion, and that the proceeds of sale, though actually money was in legal contemplation, real estate, and went to the heir at law. He supported this conclusion by reference to the cases of State v. Krebs, 6 H. & J. 31 ; Leadenham v. Nicholson, 1 H. & G. 267 , and Hammond v. Stier, 2 G. & J. 81 , in which, as he says, “it was held upon great deliberation” — that —‘ ‘the "mutation of real into personal estate was complete when the sale was ratified by the Court, and the purchaser has complied with the terms of it by paying the money if the sale is for cash, or by giving bonds if the sale is on credit;” and the Chancellor adds, “no case can be found in which it has been held or intimated that the concurrence of all these circumstances is not necessary to effect the change.” The appellee cites the case of Early v. Dorsett, 45 Md. 462 , in support of his contention above, but we do not so understand that decision. Judge Miller in the opinion in that case, expressly says: “It has been the settled law of this State since the case of Leadenham v. Nicholson, 1 H. & G. 267 , that where land is sold under a decree like the present, the mutation from realty to personalty is complete when the sale is ratified and the purchaser has complied with the terms of sale as prescribed by the decree.” The decree in that case was for sale of real estate devised by