Gelston v. Thompson

Mortgages ; assignment by mortgagor ; rights of assignee, as TO RENTS AND PROFITS, AND RIGHT TO REDEEM. RENTS ; JURISDICTION IN equity ; laches and limitations ; commissions. Court of Common Pleas ; jurisdiction. G. and R. purchased in February, 1858, certain leasehold property at a sheriff’s sale, made by virtue oí a writ-oí levari facias, issued out oí the Court of Common Pleas, on a judgment to enforce a mechanics’ lien, and entered into possession shortly thereafter. Subsequently they became the assignees of the mortgagee of the same property. Upon a bill filed in October, 1865, against G. and R., by the assignee of the mortgagor, claiming the right to redeem and an account of rents and profits. Held: The sale was inoperative and void, the Court of Common Pleas having no jurisdiction in cases of mechanics’ lien. ' p. 599 The legal estate being in the assignees of the mortgagee, the assignee of the mortgagor could not have recovered rents and profits by an action at law, and a Court of Equity which recognizes rents and profits as incidents de jure of the right of redemption, was therefore the proper forum to administer relief. p. 600 While as between mortgagor and mortgagee, upon a bill to redeem by the former, he must pay not only the mortgage debt, but all other debts due from him to the mortgagee; but this equity does not extend to an assignee of the mortgagor, (a) p. 601 . The assignee of the mortgagor was not barred by lapse of time and limitations from recovering beyond the three years immediately preceding the filing of the bill. p. 600 That the assignees of the mortgagee should not be allowed the purchase money paid at the sheriff’s sale, nor the debt due to one of them by the mortgagor. pp. 600-601 That the assignee of the mortgagee who collected the rents arising from the property, was not entitled to claim commissions for collecting the same. (b) p. 601

Appeal from the Superior Court of Baltimore City, in Equity. The bill in this case was filed on the 2nd of October, 1865, by the appellee. Henry G. Willis, being the lessee'for ninety-mine years, renewable forever, of a lot of ground at the corner of Walsh and Greenwillow streets, in the City of Baltimore, assigned the same to Richard F. Gardner. On the 14th of September, 1855, Willis executed a mortgage of his interest to Charles Myers, to secure the sum of $450. On the 16th of May, 1857, Gardner assigned his interest in the property to the appellee. On the 15th of February, 1858, the Sheriff of Baltimore City, under a writ of levari facias, issued out of the Court of Common Pleas on a judgment to enforce a mechanics’ lien, sold the lot to the appellants for $130, and on the 22nd of the same month, delivered to, them a duly executed deed of conveyance; and on the 4th of March, following, they entered into possession of the property. On the nth of October, 3858, Myers, assigned his mortgage to the appellants for $467.37. The bill prayed for an account and discovery of the rents and profits received by the appellants, and that they might show what sum, if any, was yet due upon the mortgage assigned to them, and also claimed the right to redeem. The appellants answered relying on the deed of the Sheriff to them, denying the jurisdiction of the court as a Court of Equity, and pleading limitations and lapse of time. After a general replication, proof was taken under a commission. The appellants, at witnesses, proved their possession, the purchase and assignment of the mortgage, and their receipt of rents, and that they held under' both the Sheriff’s deed and the assigned mortgage. Reese proved that he received all the rent himself, and accounted to Gelston for his part. The appellee’s title as assignee of the mortgagor, and the appellants’ title as assignees of the mortgagee, were respectively made out. At the time of the institution of this suit, the appellant, Gelston, had a lien for materials furnished for the building of the house erected on the lot in question, amounting to $90.32, to enforce which, proceedings had been instituted in the Superior Court of Baltimore City. On the 13th of October, 1866, the court (Martin, J.,) passed an order referring the case to the auditor, and instructing *him to state an account of the rents and profits received by the appellants, and also the amount of the mortgage debt and interest from the proof in the cause, or such other proof as the parties might produce, and to state such other accounts as the parties might direct. The auditor accordingly, in obedience to the instructions of the solicitor of the appellee, stated an account, showing the amount of the mortgage debt and interest thereon from the 1st of July, 1856, and the rents received from the property from the4thof March, 1858, as between mortgagor and mortgagee. He also stated, in accordance with the instructions of the appellants’ counsel, two other accounts — the one showing the amount of rents received by Reese for the three years immediately preceding the date of the filing of the bill, and allowing him ten per cent, commissions for collecting the same and the expenses disbursed by him within that time; and the other, in .like manner, showing his receipts and expenses from the date of the filing of the bill to the 4th of September, 1866, and allowing him the like commission upon his receipts. The first account was excepted to by the appellants and the other accounts by the appellee; the exceptions on behalf of the former were overruled and those on behalf of the latter were sustained; and the court, on the 3rd of April, 1867, passed its decree, finally ratifying and confirming the first account with a slight alteration, rejecting the others and sustaining the claim of the appellee to redeem. From this decree the present appeal was taken. The appellants having taken possession of the lot and premises in question, under the Sheriff’s deed of the 22nd of February, 1858, and continued to hold and claim title under the the same, their possession must be referred to that deed, and *not to the mortgage subsequently acquired. And, consequently, even supposing that deed to be invalid, they were in the position of parties holding adversely under color of title as against whom an action at law, and not a proceeding in equity, was the appropriate remedy. Hipp v. Babin, 19 How. 2.7s ; Story’s Eq. PI. sec. 476; Neale v. Hagthorp, 3 Bland, 561; Drury v. Conner, 1 H. & G. 220, 229; Lewin on Trusts, 97 Law Lib. 752, note (1); Blennerhassett v. Day, 2 Ball. & Beatty, 104. The appellee was in default in not having appealed from the Court of Common Pleas in the case in which the levari facias issued; in standing by and permitting his property to be sold by the Sheriff without in any way attempting to prevent the same, or warning the public that the sale was not valid; and, lastly, in allowing the appellants to remain ovér seven years in quiet possession of the property, which he claims, before instituting the present suit; and being thus so largely in default has debarred himself from any redress which he might otherwise have had in equity. Brumbaugh v. Schnebly, 2 Md. 320; Moore v. Blake, 1 Ball & Beatty, 62, 69; 1 Story’s Eq. sec. 529. The appellee having clearly been guilty of laches, the court below certainly erred in holding that the appellants were liable for rents and profits beyond the 2nd of October, 1865, the date of the filing of the bill. At any rate, they ought not to have been held responsible for a longer period than the three years next preceding the commencement of the suit. Lewin on Trusts, 751, (97 Law Lib. 751); Strike’s Case, 1 Bland, 57, 73; West v. Jarrett, 3 H. & J. 483; Pettizvard v. Prescott, 7 Vesey, 54i. The appellants ought to have been allowed for the purchase money paid by them for the premises in controversy, the same having been appropriated to relieve the house from a lien which existed upon it. Under the circumstances of the case, Reese was entitled to the ten per cent, commission which he claimed for the management of the property, and which was disallowed by the *auditor and court. 1 Hilliard on Mortg. 451; Waterman v. Curtis, 26 Conn. 248. The Sheriff’s deed being a nullity, being under an execution in a case coram non judice, the relation of mortgagor and mortgagee existed, and the appellee was entitled to an account and to redeem. Miller v. Barr oil, 14 Md. 174; Quarrell v. Beck-ford, 1 Mad. Ch. J53. In such an account limitations was no bar within twenty years. Fisher on Mortgs. 482, (margin); Hertle v. McDonald, 2 Md. Ch. 133. And no allowance should be made to the appellants for receiving the rents themselves. Davis v. Dendy, 3 Mad. Ch. 95. And even if the mortgage deed had expressly stipulated that such an allowance should be made, it would have been only a cloak for usury.