Treiber v. Lanahan

Baiitol, J.,

delivered the opinion of this Court:

We have examined this case with a good deal of care, and without entering into any particular statement of the pleadings and proofs contained in the record, shall briefly state the conclusions we have reached upon the whole case.

A majority of the Court are of opinion that the relation existing between Treiber and Elurshutz in their ownership of the Revere House” property, was not that of partners. But that under their contract with Beall, they held an equitable estate, as tenants in common, in the lot of ground therein described.

The whole Courj; concur in the opinion that the Circuit Court properly excluded from the consideration of the case the statement or settlement made by Elurshutz with Trei-ber, on the 4th of March 1852, marked “ Exhibit Gr.” As to Lanahan, that settlement was res inter alios;, his rights under the deed of trust of the 14th of April 1851, could not be impaired by any declarations of Elurshutz, thereafter made. The cases of Stewart vs. Redditt, and Glenn vs. Grover, 3 Md. Rep., 67 and 212, referred to by the Judge of the Circuit Court, fully support his opinion on this point.

There is evidence in the cause, however, independent of Exhibit Gr, to show that although Treiber and Elurshutz held the hotel property as tenants in common, they did not bold it in equal moieties; but tbat tbe contract between them was tbat eacb should bold an interest, to be fixed according to tbe payments made by eacb in improving tbe property. Tbis agreement is evidenced by Exbibit D, executed on tbe 3rd day of December 1850. It is contended by tbe appellee tbat tbis agreement was a secret equity existing between Treiber and Flursbutz, of wbicb Lanaban bad no notice at tbe time be toot tbe deed of trust; and being inconsistent with tbe title of Flursbutz, on tbe face of tbe contract with -Beall, it is not to affect Lanahan’s rights.

We do not concur in tbis view. Lanaban is not a tona fide purchaser of a legal title; at tbe time tbe deed of trust was made, Flursbutz held only an equitable title under tbe contract with Beall, and Lanaban or Roman, as purchaser of .an equity merely, took subject to prior equities. “Between equities, tbe established rule is, tbat be who has tbe prior equity in point of time, is entitled to tbe like priority in point of right.” 2 Story’s Eq. Jur., seo. 1502. Boone vs. Chiles, 10 Peters, 177, 210. Karthaus vs. Owings, 4 H. & J., 262.

Tbe agreement between Treiber and Flursbutz, evidenced by Exhibit D, determining their respective interests in tbe property to be according to tbe amounts respectively contributed by them in its improvement, was a valid agreement; being made before Lanaban’s rights accrued, it was not in derogation of bis rights, and therefore be took under tbe deed only such interest in tbe property as Flursbutz was entitled to under bis agreement with Treiber, to be determined according to tbe amount or proportion be bad contributed, or might contribute, towards tbe cost of tbe lot and improvements.

We do not concur in the view suggested by tbe appellee, tbat tbe agreement is to be construed as having reference only to the building described in tbe contract for lease. The object and intention of tbe parties being to erect a building, with- appurtenances and internal arrangements suitable for a large hotel, they must have contemplated expenditures beyond the mere erection of the main building, and their whole subsequent conduct in fitting up and preparing the improvement for the purpose designed, demonstrates such to have been the intention of their agreement. Nor do we agree with the appellee in the position, that the cost and expenses of the improvement made after the execution of the deed of trust, are to be disregarded in making the computation necessary to ascertain the extent of Elurshutz’s interest in the property. Those costs and expenses being in the contemplation of the parties from the beginning, and within the scope and purview of their agreement, and Lanahan having acquired his rights subject to the agreement, cannot be permitted to defeat it. And this view of the equitable rights of th.e parties is strengthened by the proof that these expenditures for improvements on the property, made after the deed of trust, were made with the knowledge of Roman, the grantee in the deed, who prepared the lease to Hefelfinger, in which Treiber and Elur-shutz bound themselves to make extensive improvements on the property, which it must be presumed were necessary in order to secure a suitable tenant.

It results from these views, that in order to fix the pro-pe^basis for distribution of the fund in Court, arising from the sale of the “Revere House,” it is. necessary that an account be stated between Treiber and Elurshutz, showing the amounts respectively paid and contributed by them in paying for the whole improvement. In stating this account, as has been already said, “Exhibit Gr” cannot be considered as legal proof of the admissions contained in it.

In stating the account, it is necessary to debit Treiber with all moneys received for rent, as well as with all money or property of. Elurshutz which has come to his hands, allowing to him credits for all moneys paid by him towards the lot and improvements, and moneys paid for Elurshutz. The result of such accounting will show the proportion or share of Flurshutz in the fund in controversy; out of which ls first to be paid so much, of Beall’s mortgage as Flurshutz owed, and tbe residue thereof, or so much thereof as may be required, ought to be awarded to Lanahan, in satisfaction, in whole or in part, of his claim secured by the deed of trust, and exhibited in the record.

(Decided May 23rd, 1865.)

Under the decision of this Court, in Wilson vs. Russell, 13 Md. Rep., 494, Lanahan is entitled to receive $3,000, that amount being specified in the deed, with interest thereon; provided Flurshutz’s share of the fund, to be ascertained as above stated, shall be sufficient to pay it. The excess of the claim of Lanahan, beyond this sum, is not covered by the mortgage.

The whole mortgage debt due Beall, being a prior lien, is first to be paid out of the fund, the shares of Treiber and Flurshutz respectively contributing their proper proportions thereof, according to their agreement in Exhibit D.

In the opinion of this Court, Treiber is chargeable with interest on the purchase money of the “Revere House” from the time of his purchase from the ■ trustee. By the terms of sale, .the money was payable upon the ratification of the sale; but the proof is, that from the time of his purchase Treiber was in possession of the property, receiving rents therefor, and it is equitable that interest' should be paid by him on the purchase money. |⅜

In order that proper accounts should be stated in this case, and that a final order may be passed therein, in accordance with the views expressed in this opinion, this Court, without affirming or reversing the decree below, will remand the cause to the Circuit Court for further proceedings under the Act of 1832, ch. 302, (Code, Art. 5, sec. 28.)

Cause remanded.