Green v. Western National Bank , 86 Md. 279 ( 1897 )

Page, J.,

delivered the opinion of the Court.

This is an appeal from an order of the Court below ratifying an audit distributing the proceeds of the sale of certain market stalls, in the Lexington and Hanover Markets in the city of Baltimore.

The stalls were originally the property of Charles Brown, now deceased. In May, 1892, he borrowed $250 from the appellant, and to secure its payment pledged to him stalls Nos. 5 and 51^, in the Lexington Market. There is no controversy over this transaction. On the 24th February, 1892, the Baltimore Butchers’ Mutual Protective Association loaned him $2,000 and on the 4th of April, 1894, the further sum of $500. To secure the payment of these two sums, amounting in the aggregate to $2,500, the association received a 'mortgage from Brown on all the stalls, and also the transfer of the licenses therefor on the books of the City Comptroller. At the same time, to comply with the rules of the association, Charles W. Brown, the son of Charles Brown, in his own name as trustee for Elenora Brown, his wife, subscribed for certain shares of stock of the association, and pledged them as additional security.for the loan. In his lifetime Charles Brown paid no portion of this debt. Charles W.. Brown, however, kept the stock paid up, according to the rules of the association. Brown states as the reason why the shares were subscribed for by him as trustee that the association required the borrower to become a member by subscribing for its stock, and his father not being “ in a condition ” to do so, he consented to take them as trustee for his wife, and pledge them for the debt of his father. It was not insisted at the argument that the payments made by Brown on account of the stock was out of his wife’s money, as Brown in his answer had alleged. There is no proof in the case that would enable us to find that Mrs. Brown’s money was so used. Although at the requirement of the association, she joined in the receipt to it for the amount standing to the credit of her husband, trustee, there is nothing in the record to satisfy us that she had any interest in the matter whatever.

In January, 1895, Charles Brown died and within a month thereafter, Charles W. Brown and Emil Budnitz qualified as the administrators of his estate. On the 27th of November, 1895, the appellees recovered a judgment in the Baltimore City Court against Charles W. Brown for $1,209,80 with interest and costs, and on the same day execution by way of fieri facias was issued and reached the sheriffs hands two days later.. It is clear, that at the time of the issuing of this writ, the title to the stalls was in the administrators of Charles Brown, subject to the lien of George Green on stalls Nos. 5 and 5 in the Lexington Market, and the lien of the Butchers’ Association on all the stalls of the deceased in both markets. On the fourth day of December, 1895, the Orphans’ Court passed an order directing the administrators to make sale of the stalls. The report of the administrators to the Orphans’ Court fails to give the date of the sale made in pursuance of the order. But Mr. Budnitz in his answer states that,, it was made, reported and ratified before the ninth day of December. He also testifies that Brown told him “ two or three days before the report of sale,” that Green was to be reported as purchaser, and acting on this he (Budnitz) prepared the report and filed it. It was immediately ratified ; and “ the appointment was then made for all the parties in interest to meet at his office on the ninth of December.” That the sale was completed before that day is further borne out by a consideration of the purpose and plan Brown had in view. His purpose was to secure the title to himself; his plan, to have Green returned purchaser, so that the latter could hold the legal title until the loan was repaid ; and to effect all this, it was necessary when the time came for Green to advance the money and for the association to release the mortgage, that the title should be safely vested in Green. How long before the ninth of December the sale was made, is not material; because if it was made at any time prior to that day, the lien of the appellant’s judgment fastened upon the property. Nor is it proper to enquire whether upon the facts proved, the title became vested in Charles W. Brown. The Circuit Court by its decree of the sixth of October, 1896, so determined, and with the correctness of that decision, it not having been appealed from, we are not now concerned. Phelps v. Stewart, 17 Md. 242. This appeal having been taken from an order distributing the proceeds of sale, the original decree authorizing the sale is not open to review by this Court. Newbold v. Schlens, 66 Md. 590; Porter v. Askew, 11 G. & J. 351.

Brown’s title having accrued prior to the return day of the writ, that is prior to the 9th day of December, if it be assumed that market stalls are such property as may be taken in execution, it is clear the appellees acquired a lien, subject to such prior liens as might exist. The fact that the Butchers’ Association held a mortgage, whereby the legal title was in it, with only an equity of redemption in Brown, could not avail to defeat the lien of the execution. It could not be enforced at law, it is true, and because of that it is that the appellant had the right to seek the intervention of a Court of Equity in order that he may be paid his claim, after the prior lien has been discharged. “ It is an established legal principle, that a debtor’s equitable estate in personal property cannot be seized and sold under a writ of fieri facias. The usual mode is, to issue a fi. fa., cause it to be levied or returned, thus showing that his remedy at law has failed ; by which acts of diligence a creditor acquires, in the eye of a Court of Equity, a priority of right from the time his execution was placed in the sheriff’s hands, anda Court of Equity will permit him to redeem the prior incumbrance or grant a decree for a sale.” Myers v. Amey, 21 Md. 305.

We are of opinion there is nothing in the nature of the right or estate acquired by the purchaser of market stalls to exempt them from the lien of an execution. Such right is “ in the nature of an easement in, not a title to, a freehold in the land ; * * it is limited in duration to the existence of the market and is to be understood as acquired subject to such changes and modifications in the market during its existence as the public needs may require. The purchase confers an exclusive right to occupy the particular stalls, with their appendages for the purposes of the market and none other.” Rose v. M. & C. C. of Balto., 51 Md. 270. It is a valuable right, sold by the municipal authorities under the power conferred by the Legislature “ to lease, sell or dispose of” it “in any manner and for any term” they may think proper. Public Local Code, Art. 4, sec. 678. It is transferable, may be given and taken as security for debts or sold; and special provision is made in the City Code for the passage of the title. Border State Savings Institution v. Wilcox, 63 Md. 531. It is also an interest issuing out of the realty of determinate duration, such as the term of years for which it may be granted, or during the existence of the market. It is a chattel real and personal property (2 Blackstone, 386); and therefore liable for the debts of the owner and subject to seizure and sale under a fieri facias. 2 Tidd’s Practice, 1039.

Subsequently to the sale, by appointment, Mr. Budnitz testifies the “parties in interest” met in his office on the ninth of December. At that time Green was chargeable with full knowledge of the exact state of the title. He had actual notice of the mortgage and of the fact that the association held the license as collateral security only, for the payment of the debt due to it by Charles Brown. An examination of the records in the Orphans’ Court would have informed him that the administrators had included the market stalls in the inventory of the estate, had obtained an order for the sale and had sold them, and reported him as the purchaser without his knowledge or consent. He knew he was not the owner of the stalls, and inasmuch as it was within his knowledge that Brown wanted to get the stalls free from the claim of the association, and the title in “ some individual, where he could pay the money on notes when it came due,” it required no especial astuteness to enable him to infer that whatever was done, was at the instigation of Brown himself. He states in his evidence he asked Brown “ if the stalls were all right in his name and he said they were,” and that satisfied him. He seems to have made no examination, either among the Orphans’ Court proceedings or in the Comptroller’s office. It was under these circumstances that on the 9th of December, the claim of the association was paid and its mortgage released. The release recites, “whereas all covenants, &c., have been performed and the whole sum of money and interest secured thereby has been paid, the said body corporate doth grant and release, &c.” The receipt of the association is for $2,514.34, of which $ 1,086.74 was paid by the check of Green ; the residue was settled for by the receipt of Brown and wife for $1,427.37, the same being the amount to their credit on the books of the association. The amount so paid by Green’s check was part of the $1,200 loaned to Brown and was so paid at Brown’s request; the residue of the loan was paid to Brown. At the same time Green obtained a transfer of the license from the association, and also entered into an agreement with Brown to sell the stalls to Brown’s firm (Brown & Merritt) for $1,200, payable in two years, they to have the possession of them upon payment of that sum with interest and the license and all expenses thereon. It is not contended that Green acquired any title or interest in the property by the transfer of the license, superior to the lien of the execution. It is also clear that up to the date of the sale by the administrators the equitable title to the stalls was in Charles Brown or his representatives ; and after that in Charles W. Brown. So that when the mortgage was released, its lien was absolutely destroyed, and the lien of the execution became the first, unless upon some principle of equity Green can be subrogated to the lien of the mortgage. Upon this point the counsel for the appellant have cited many decisions of Courts beyond the State, but we deem it unnecessary to enter upon an examination of them, for the reason that, as to a case of this kind, the proposition involved has been firmly settled by our own Courts, and, we may add, in conformity to the great weight of authority everywhere. Boyd v. Parker, 43 Md. 201.

It may be premised, in view of the facts as we have stated them, that to hold the lien of the association still exists, would be to defeat the intent of the parties manifested by declarations and acts in the most unequivocal manner. When Brown obtained the loan from Green, it was well understood by both of them that the money was to be used in procuring the release of the association’s mortgage. This was in- fact accomplished by the release from the association. Green, who at the time knew or ought to have known the exact condition of the title, contented himself with taking as his only security a transfer of the license from the association, who, he was well aware, held it only as a security for its claim. Why, it may be asked, should not be applied the rule, than which none is better settled, that “ those who enter into contracts must be governed by them as made, according to their true intent and meaning, and must submit to the legal consequences from them ?” Boyd v. Parker, (supra).

Can Green under these circumstances derive any aid /rom the doctrine of subrogation ? That doctrine is not founded in contract but is altogether a creature of equity, and only resorted to to afford relief to a meritorious creditor. It is never applied when by so doing it will work an injury upon other persons by destroying their legal or equitable rights. In Milholland and Wilcox, Trustees, v. Tiffany, 64 Md. 460, the Court says : “It may be applied on equitable principles in behalf of one who at the instance and request of the debtor pays a lien or incumbrance which he was under no legal obligation to pay, provided it does not interfere with intervening rights and incumbrances. It will not, of course, be applied against superior or equal equities.” Woollen's Extrs. v. Hillen, 9 Gill, 185; Com. v. C. & O. Canal, 32 Md. 546; Boyd v. Parker (supra); Clabaugh v. Byerly, 7 Gill, 354; Robertson v. Mowell, 66 Md. 538.

(Decided June 23rd, 1897).

For these reasons we think Green is not entitled to be subrogated to the lien of the mortgage.

Finding no error in the order of the Court below, it will be affirmed.

Order affirmed with costs.