Homer v. Grosholz

G-rason, J., delivered the opinion of the Court. These are cross-appeals from an order of the Circuit Court for Baltimore City, over-ruling exceptions of — 525 — Homer to an auditor’s account, and finally ratifying the account, Homer appealing because he was not allowed the full amount of his claim under the mortgage of the 26th day of August, 1868, and Gfrosholz and Coquentin appealing first, because they were not allowed the whole proceeds of the sale of the merchandise, purchased of them by Husgen ; and second, because -Homer was allowed to participate in the distribution of said proceeds of sale with the other creditors of Husgen. On Homer’s appeal, it was contended by the counsel of the appellees, that the appellant is estopped from setting up his claim, to the extent of five thousand five hundred dollars, because it was included in the deed of trust of February, 1867, and was, by the deed of release of January, 1868, declared to be paid and fully satisfied. It has been settled by various decisions in this State, that the recital of the payment of purchase money in a deed, or of the receipt of the mortgage debt in a release of mortgage, is not conclusive upon the parties, but is always open to explanation. Wolfe vs. Hauver, 1 Gill, 84 ; Robinett vs. Wilson, 8 Gill, 181 ; Shepherd vs. Bevin, 9 Gill, 36; Carr vs. Hobbs, 11 Md., 229; Dangerfield vs. May, 31 Md , 344. The deed of January, 1868, released the security but not the debt, and in an action by Homer against Husgen to recover the debt, the former would not have been estopped by the recital in the deed, from showing that the debt was still due. But, it was also contended that the recital in the deed of January, 1868, that this debt had been paid, and the recording of the deed was notice to the world that the debt had been paid, without which the appellees would not have parted with their goods to Husgen on credit, and therefore, that such declaration operates as an estoppel in pais, against Homer, as to his claim of five thousand five hundred dollars. In the case of the Welland Canal Company vs. Hathaway, 8 Wend., 483, the Court say, iCto constitute such an — 526 — estoppel, there must be acts or admissions intended and designed to influence the conduct of another; the acts or admissions must come to the knowledge of the party, his conduct must be influenced by them, and a denial of them will operate to the injury of the party, whose conduct is influenced by them. The Court of Appeals, in the case of Alexander vs. Walter, 8 Gill, 249, adopt the rule laid down in the Welland Canal Co. vs. Hathaway, as the correct doctrine, and applied it to the case then before them, and it must be regarded as the law of this State. The same-doctrine has been held in other States of the Union, and is to be found in the cases cited in the appellant’s brief. There must not only be acts or admissions, which come to the party’s knowledge, but his conduct must be influenced by them. Conceding then that the registration of the deed of January, 1868, imparted to the appellees, a knowledge of the recitals therein contained, that the debt had been paid, yet one of the necessary ingredients of' an estoppel is still wanting, as there is no proof whatever that the appellees, or either of them, were influenced thereby to part with their merchandise to Husgen upon credit. On the contrary the proof shows that Husgen had been purchasing goods on credit from time to time, from Coquentin in Paris, at the very time that the deed of trust was in existence and upon record, and notice of which, he is therefore presumed to have had; and this fact furnishes a strong presumption that the goods sold to Husgen, after the release had been executed and recorded would have been sold to the same amount, and upon the same terms, even if the deed of release had never been executed and recorded. Under these circumstances, and in the. absence of proof, that the appellees were influenced by the release to sell their goods on credit; we think it very clear that Homer is not estopped from setting up his claim to the five thousand five hundred dollars, which was rejected by the Court below. — 527 — Upon the appeal of G-rosholz and Coquentin, it was contended first, that they were entitled to a separate account from Homer as executor of Husgen, of the proceeds of the sale of their goods sold to Husgen after the deed of release had been recorded, on the ground that Hus-gen was insolvent, and that there was a corrupt agreement between him and Homer by means of which he obtained false credit with the appellants, when he had no reasonable expectation of paying, and because the mortgage to Homer was given to secure a past indebtedness, and to a creditor who took with full notice, and his title was therefore no bettor than Husgen’s. The proof shows that Husgen was regarded as perfectly solvent at the time the release was executed, at the time the goods were purchased in Paris, and at the time the mortgage was executed. In October, 1868, a petition in bankruptcy was filed in the United States Court, by Grosholz and Coquentin against Husgen, and after a full investigation, the deeds, now the subject of consideration in this case, having then been offered in evidence, the Court dismissed the petition. Nor is there any proof of any corrupt agreement between Homer and Husgen, by means of which Husgen was to obtain false credit. The proof shows that Husgen was indebted to Homer, and that the latter had endorsed largely for him, and that the deed of trust was executed, to enable Homer to pay himself out of the sale of the property conveyed, the amount due him, as well as to securé him against his liability as endorser, and also to pay some debts due by Husgen to other parties. All this indebtedness was paid off, except the sum of five or six thousand dollars due Homer, when Husgen requested him to execute the deed of release, stating that it made him look bad with Bradstreet, or on Bradstreet’s books, the party named being a commercial agent. Homer, at first declined to execute the release, but believing that Husgen was perfectly sol — 528 — vent, and would pay the debt, and being willing to comply with the request of Husgen, who was his brother-in-law, consented to his request to release, and it was accordingly executed and put upon record. This was done without any agreement or understanding between the parties, as far as the proof discloses, that any security was to be demanded or given in the future for the debt then due. On the other hand the proof shows that this transaction took place in good faith, and without intention to injure any one. The proof further shows that Husgen had been dealing with the appellants for a long time, and that while he purchased goods of them after the release, to the amount of 16,375 francs, their account shows that he had, during the same period, paid them nearly 21,000 francs, a larger part of which was paid after the bill of 16,375 francs was contracted. We are therefore of opinion that the appellants are not entitled to have a separate account of sales of the goods sold hv them to Husgen in the spring and summer of 1868. But it was contended, secondly that the mortgage of the 26th August, 1868, was fraudulent and void against Husgen’s creditors ; it being, as it alleged, the result of a fraudulent scheme, whereby the records were made use of to spread a falsehood before the public, and especially before those from whom Husgen was to buy his goods, and after he had thus obtained them, Homer at once appropriated them to his own use. Much that we have said upon the first point of the appellants, applies with equal force to this. There is no evidence in the record of any such scheme, or that any one was induced by the recital of the release to give credit to Husgen ; he was at that time and down to the time of his death, solvent. The proof further shows, that Homer kept no hooks, but that his son attended to his business for him ; that Husgen returned from Europe in failing health, and that Homer held no evidence of Husgen’s indebtedness to him — 529 — nor of his ownership of the stock he had loaned him ; and fearing that Husgen’s death might be disastrous to him in the then condition of accounts, he saw Husgen and obtained from him a statement of the amount due him, and procured the execution of the mortgage of 26th August, 1868, so as to be provided with some evidence of the indebtedness, and security for its payment. The proof further shows, that the amount for which the mortgage was given was actually due. We can discover no ground of objection to its validity. (Decided 10th July, 1873.) The order appealed from will be reversed in part, and affirmed in part, and the cause remanded for further proceedings in conformity with the views expressed in this opinion. Order reversed in part, and affirmed in part, and cause remanded, for further proceedings. Alvey, J., dissented.