Laeber v. Langhor

Bowie, J.,

delivered the opinion of the Court.

This appeal is take from a decree of the Circuit Court for Baltimore County, sitting as a Court of Equity, perpetuating an injunction previously granted by said Court, and giving other and further relief.

The cause seems to have been set down for hearing, upon bill, answer, and evidence taken and returned under a commission ; no replication appears in the record, the answer was supported by affidavit.

The allegations of' the appellee, the complainant below, substantially charge,, that on the 24th of April, 1871, he executed an instrument in the form of an absolute bill of *480 sale, for the nominal consideration of seven hundred and fifty-two dollars and ninety cents, to secure the payment of two promissory notes given hy the appellee, to the appellant, of the same date, for $652.92 ; that these notes were afterwards paid to the appellant; notwithstanding which, the appellant had seized, taken and carried away, the goods and chattels described in the hill of sale, with intent to sell them, etc. The bill prayed, that the instrument purporting to be .a bill of sale, might be declared a mortgage, and delivered up to- be cancelled ; that an account might he taken between them, and the appellant enjoined from selling and disposing of the goods before mentioned. The answer denied all the material allegations of the bill, averred that the instrument was intended to be an absolute bill of sale, and not a security for the notes; denied the payment of the notes, and averred the appellee was indebted to- the appellant for a large amount, still due on the notes, which were given for other indebtedness of the appellee, on subsequent transactions; that the appellee failed to meet the notes at their maturity, and they were taken up hy the respondent, and the appellee renewed the same, but had failed to pay the renewed note. The appellant denied the taking of any articles from the possession of the appellee, except such as wei’e enumerated in the hill of sale.

The Court below decreed that the bill of sale was a security only, for the payment of the sum of money mentioned as the consideration thereof, and not an absolute sale and transfer of the property and chattels therein mentioned ; that the money thereby secured has been fully satisfied and paid hy the appellee, and the bill of sale and record thereof are void, etc., and adjudged and decreed that the appellant shall surrender the bill of sale to be cancelled, and that the injunction previously issued, be perpetual, etc. From this decree, the defendant appealed, and insists the Court below erred in matter of fact, as well as in matter of law.

*481 In the first aspect of the case, he contends, that assuming the bill of sale to have been given as a security for the notes of the same date, (24th April, 1871,) amounting to $652.90, those notes were not paid but renewed, and a balance still remains unpaid.

2nd. There is no case shown by the bill, that entitles the complainant to an injunction ; no charge of irreparable damages, or insolvency.

After a careful consideration of all the evidence, we think there is no reasonable doubt that the bill of sale of the 24th of April, 1871, although purporting on its face to be made for a money consideration, and without condition, was in fact a mortgage to secure the amount of the promissory notes of the same date, given by the appellee to the appellant, for $500 at 90 days, and $152.91 at 4 months, making $652.91. The evidence of the appellant alone, (although contradicting his answer,) taken in connection with the circumstances, is sufficient to show the bill of sale was executed to secure an antecedent debt, and that the notes above mentioned represented the debt to be secured. Whether these notes have been satisfied or not is the next inquiry.

Appellant’s exhibit L shows that, on the 24th

April, 1871, he charged the appellee, to acct.

rendered, ............$652.91

That between that date and September 11th,

1871, inclusive, he sold him other articles

amounting in all to......... 1447.91

And credited him with payments .aggregating . 671.00

Leaving a balance due on the whole transaction up to Oct. 11th, 1871, of....... 776.91

which balance was secured in part by two notes of appellee to appellant, of that date; one for $387.96; one for $366.91, at 3 and 6 months, on one of which a balance remains still due, according to appellant’s account, but *482 which, is extinguished if the payments and credits claimed by the appellee are allowed.

It .is apparent from the accounts rendered and filed by the appellant, against the appellee, there was a mingling in the dealings between them of the debt secured by the bill of sale, with the debts subsequently contracted, and upon the adjustment of accounts between them, on the 11th October, 1811, the first notes were surrendered, and others substituted for a different and larger amount, exceeding the actual debt due on the 24th of April more than $100, and greater than the nominal consideration of the bill of sale.

Can these notes, which include balances due on later sales and purchases, be called renewals of the old securities, or can they be segregated, and be regarded as renewals “pro tanto f”

Mortgages are pledges of property for certain specified debts, and cannot be a lien for any other, not particularly mentioned and expressed therein. Art. 64, sec. 2, Code.

The appellant's theory is, that all the moneys paid by the appellee, after the execution of the bill of sale, should be applied to the general account of the appellant against the appellee; the latter contends, the payments should have been applied to the notes secured by the bill of sale. If the latter proposition be correct, the debt intended to be secured by Exhibits S. L., Nos. 1 and 2, will be found satisfied. There is no evidence of any express application of payments by the appellee, at the time they Were made. The rule laid down in Gwinn vs. Whitalcer is, that if a debtor is indebted on mortgage, and simple contract, and neglects, when he makes a payment, to apply it, the law will apply it to the mortgage. 1 H. & J., 754 ; Dorsey vs. Gassaway, 2 H. & J., 402 .

The second objection of the appellant, that there is no case made by the bill, that entitles the complainant to an injunction, if. intended as an exception to the jurisdiction *483 of the Court below, comes too late. Code Public General Laws, Art. 5, sec. 27 ; Knight vs. Brawner, 14 Md., 1 .

(Decided 12th January, 1877.)

But the injunction in this case was not the primary object of the bill. It was ancillary to the relief sought by the prayer for an account, and the cancellation of the mortgage or bill of sale.

The allegations were ample to give jurisdiction on these accounts, and to authorize an injunction as an auxiliary remedy.

The decree of the Court below is affirmed, with costs to the appellee.

Decree affirmed.