White v. Malcolm

Eccleston, J., delivered the opinion of this court. These three appeals are all taken from an order of the Circuit court for Baltimore county, setting aside certain sales of real estate, situate in that county, which had been mortgaged by Robert Howard to 'White & Elder. The sales were made and reported by T. Parkin Scott, Esq., as “Attorney, agent or trustee,” for the mortgagees, under the Act of 1826, ch. 192. Before the sales, the Great Falls Iron Company received a deed from Robert Howard, which it is alleged, by the appellants, combed all liis equity of redemption, in all the mortgaged premises then held by or remaining in him.

After the sales, under the mortgage, James Malcolm and William II. Brown, were appointed trustees on the application of the said Howard for the benefit of the insolvent laws. The mortgage to White & Elder, from Howard and his wife, is dated the 6th of October 1857. The conveyance from Howard and wife to the Great Falls Iron Company bears date the 25lb of January 1858.

On the 17th of June 1858, White & Elder executed the power of attorney or authority to Thos. Parkin Scott, authorizing him to sell the mortgaged premises, “according to the provisions of the Act of Assembly, in such case made and provided.” And on the 22nd day of the same month, the said T. P. Scott gave bond to the State, with security, which was duly filed and approved, conditioned to “abide by and fulfil any order or decree which should be made by the Circuit court of Baltimore county, in relation to the sale of the mortgaged premises, or the proceeds thereof.” The said power of attorney, mortgage and bond, were filed in the said Circuit court, on the day last mentioned. Mr. Scott, as trustee and attorney, made sundry sales of ⁵³⁸ the mortgaged premises, on the 29th of November 1858, and on (he 3rd of December following, reported the same to the said court. It is admitted that Robert Howard applied for the benefit of the insolvent laws, on the 21st of December 1858, when •James Malcolm and William H. Brown were appointed his trustees, and bonded as such.

On the 23rd of the same month these trustees filed two exceptions to the sales, and on the 19th of February 1859, they filed twelve additional exceptions. The first two are: 1. That said Robert Howard applied for the benefit of the insolvent laws upon the 21st of December 1858, and your petitioners were duly appointed his trustees, and have duly bonded as such, and therefore the sale reported in this case ■ought not to be ratified. 2. They also allege that said mortgage was given upon a usurious consideration of ten thousand dollars, and ought not therefore to be ratified; and for other reasons that will be urged upon the hearing of these objections to said sale.

The additional exceptions referred to are the following: 3. That the said White and Elder have not filed their . bond of indemnity, as required by the section 2, of the Act of 1826, ch. 192. 4. That the sales reported were made in the city of Baltimore, beyond and without the limits of Baltimore county. 5. That the said trustee and attorney did not give twenty days notice of the time, place, manner and terms of sale in two daily newspapers, printed in the city of Baltimore. 6.

That the said trustee and attorney did not give twenty days notice of the time, place, manner and terms- of sale in two daily newspapers, printed in Baltimore county. 7. That the said attorney and trustee did not in any notice of sale, given by him, sufficiently describe the premises proposed to be sold. 8. That the sales were made on terms not authorized by -law. 9. That the sale of lot No. 1, as described in the report of ⁵³⁹ the said trustee and attorney, is not warranted by any notice of sale given by said trustee and attorney, and that the said description is vague, indefinite and uncertain. 10.

That the sale of lot No. 2, as described in said report, is not warranted by any notice of sale given by said trustee and attorney, and that the said description is vague, indefinite and uncertain. 11, 12, 13. These three exceptions are similar to the 10th, and relate to the sales of lots Nos. 3, 4 and 5. 14. That the said trustee and attorney hath not made a report of the terms on which said sales were made, nor of the compliance by the purchasers, or any of them, with said terms of sale, in whole or in part. On the 21st of May 1859, exceptions to the ratification of the sales were filed by the Great Palls Iron Company, “for the reasons assigned” in the former exceptions.

Mr. Scott, as solicitor for "White & Elder, objected t.o these exceptions: 1st. Because they were not filed in time. 2nd. Because they were not filed until the day for hearing the exceptions of the trustees in insolvency. 3rd. "Because the testimony taken on the part of the said trustees was not admissible in evidence, on these exceptions.

And therefore the court was asked to direct the clerk to take said exceptions from the file, and that the court would disregard them, because not taken in conformity with the provisions of the Acts of 1826, ch. 192, and 1845, ch. 352. On the 26th of May 1859, the judge below passed the following order: “The exceptions against the sales made and reported by T. P. Scott, trustee and attorney for the mortgagees, filed by James Malcolm and William H. Brown, trustees for the creditors of Robert Howard, and those filed by the Great Falls Iron Company, and the motion filed by the said White & Elder to take the aforesaid exceptions of the Great Falls Iron Company from the files of the court, standing ready for hearing and being argued by counsel for the parties and submitted, and the proceedings being considered by the court, it is thereupon adjudged and ordered ⁵⁴⁰ for the reasons stated in the opinion of the court, filed with this order, that the aforesaid sales, so made and reported as aforesaid, be and the same are hereby set aside and annulled.” The reason assigned in the opinion of the court for setting aside the sales, or why they should not be confirmed is: “Because the terms on which the sales were made, are not stated in the report., ’ ’ From the order setting aside the sales these appeals are taken. The appellees have contended that all said appeals should be dismissed, on the ground that the order on which they have been taken, was passed in the exercise of a specially delegated authority, and not in the progress of a cause at law or in equity, and that in such case no provision is ju&dejfor an appeal. But, in Williams vs. Williams, 7 Gill, 302 , the right of appeal was sustained, in a case arising under the Act of 1833, ch. 181, in regard to a sale of mortgaged property; which Act provides a summary mode of effecting such a sale, different from the established general practice in chancery of obtaining decrees for selling property under a mortgage.

And, in analogy with the principle decided in that case, a majority of the judges, sitting in the present case, are of the opinion that appeals may be taken from decrees, or decretal orders passed by the court, where sales have been made and reported, under the Act of 1826, ch. 192. The 5th section of that Act provides for a decision, by the court, in reference to reasons filed, why a sale should not be affirmed, as also in regard to claims for the proceeds of the property; and then the section declares that, “said court shall have the same power in the premises as they now have over sales made by trustees of their own creation, or in the distribution of moneys in the hands of such trustees.” The appellees have said, conceding it to be true, that parties whose .rights are affected by such an order as the one before us, may appeal, still as Mr. Scott has no interest in the controversy, save only as trustee, agent or attorney for the mortgagees, he has no right to appeal. ⁵⁴¹ But such a position is at variance with what is said in Salmon, Trustee of Boon, vs. Pierson, 8 Md. Rep., 299 , and in Teakle, Trustee, vs. Crosby & Bevan, 14 Md. Rep., 23 and 24. In both of which cases the principle is most distinctly announced, that where a decision is made which injuriously affects the claim of an insolvent’s trustee for commissions, he may appeal. This principle is considered properly applicable to the present case.

The fourth exception is an objection to the sales, because they were made in the city of Baltimore, and not in Baltimore county. In support of this exception, the Act of 1825, ch. 203, sec. 10, has been relied upon. It provides, “That all mortgage sales, after the first day of May next, shall be made in the county where the mortgaged premises are situated; and provided that where the lands described in any mortgage, are or shall be situated in more than one county; in such case the sale thereof may be made in either of the counties within which such lands are situated.” The 3rd, 4th, 5th, 6th, 7th and 8th sections of the Act, contain provisions exclusively applicable to mortgage sales, which should be made according to the mode established by that law. And although it may be said the 10th section is. not, in express terms, restricted to mortgage sales under that Act, yet, looking to the other sections which have been mentioned, it is believed, by a majority of the court, that the 10th section should be construed as having reference to such sales only.

It is, therefore, not applicable to the sales now in dispute . The 7th, 9th, 10th, 11th, 12th and 13th exceptions present objections based upon the ground that the notice or advertisement of sale given by the trustee and attorney, did not sufficiently describe the premises intended or proposed to be sold. The notice, as given, was not made part of the report of sales, but was filed, and appears in the record. Upon examination thereof, a majority of the court think there was no ground for setting aside the sales on account of the description of the property given in the notice. ⁵⁴² The third exception assumes that the 2nd section of the Act of 182G should be construed as requiring the bond therein provided for, to have been given by the mortgagees, and that the bond of the attorney and trustee was not a compliance with the requirements of the law.

In this we do not concur. The first section authorizes a mortgagee or mortgagees, or his, her or their duly authorized attorney, agent or trustee, to sell the mortgaged property, as fully and freely in every respect, as any trustee acting under a decree of any court, may do. The second section then provides, “ That before any person shall be entitled to act in virtue of the authority vested by the preceding section, he or she shall give bond,” &c. Looking to the language of the whole section, it does not seem to require more than one bond.

It directs that “such bond shall be and remain as an indemnity to and for the security of all persons interested in such mortgaged property, or the proceeds thereof.” If, then, where the sale is to be made by an attorney or trustee, the law is to be understood as requiring the bond to be given by the mortgagee, and the law does not provide for one by the trustee, what security will the mortgagee have for his interest in the proceeds of the property? It can hardly be supposed the Legislature intended the attorney or trustee should be authorized to sell without a bond. The third section declares “that every person making sale of