Ahern v. White

Miller, J., delivered the opinion of the Court. In this case, ejectment was brought by the appellee against the appellant, for two lots of ground in the City of Baltimore. The plaintiff derived title in fee to these lots, by deed from Fenton and wife, dated the 3rd of July, 1857. On the 4th of April, 1871, he leased them to Ijams for ninety-nine years, renewable forever, and at the same time, took from him a mortgage of them to secure advances, to be made for the purpose of erecting houses upon them. The defendant’s title is that of purchaser of the lots at sheriff’s sale, under execution on a judgment against Ijams recovered in June, 1869. The main question in the case is, whether the lien of this judgment superseded the mortgage? From the face of the instruments themselves, and the proof in the cause there can be no doubt but that the lease and mortgage constituted one and the,same transaction. They were both executed on the same day, attested by and acknowledged before the same magistrate, and were left for record together, and recorded at the same time, to wit: at half past three o’clock, on the 4th of April, 1871. In the mortgage there is a recital, to the effect that its execution, delivery and recording was a condition agreed upon, prior to the making of the lease to which it refers, and prior to the agreement for making the loan or advance which it secures, and prior to entering — 417 — into or breaking open the ground or any part thereof. Though the execution of the lease preceded that of the mortgage, yet there was no interval of time which the law will recognize between the operation of the two deeds. They constituted one and the same transaction just as effectually in law, as if the two had been embodied in the same instrument. Unless there be some positive provision of a statute, or some inexorable rule of law, or some express and binding decision of the Courts to that effect, there is clearly no ground on which the judgment creditor can have any just claim to priority over this mortgage. There is no statute which so declares. By Art. 64, sec. 3, of the Code, it is provided that if a purchaser of lands at the same time that he receives his conveyance, gives a mortgage to secure the payment of the purchase money, the mortgage shall be preferred to any previous judgment against the purchaser, but it is not enacted that in every other possible case such judgment shall have preference over every subsequent mortgage. There is no doubt it is a well settled rule of law that a judgment is a general lien on all the real estate which the judgment debtor owns at its date, and that it attaches to all that he may thereafter acquire, and a leasehold interest like the present is by the Act of 1861, ch. 70, placed on the same footing in this respect as real estate. But the question here is, whether it is possible in any case under this rule, for a subsequent acquisition of property to be so coupled with the lien of a mortgage placed upon it eo instanti its acquisition, as to prevent the lien of a previous judgment from attaching to the prejudice of the mortgage? On that question how stand the authorities? In Woollen vs. Hillen, 9 Gill, 185, a senior mortgage was released without having been paid, and at the same time a new mortgage was taken for the same sum, and the question was, whether that let in to priority a mortgaga — 418 — on the same land junior in date to that which was released. The Court held that it did, but rested their decision upon the effect of the release which was absolute in its terms, and by deed duly executed and acknowledged, and said it was a case clearly distinguishable from those of dower, in which it had been adjudged that if there was but an instantaneous seizin in the husband, and where he had or took no beneficial interest, the wife was not dowable. To the same effect and upon the same reasoning is the case of Neidig vs. Whiteford, 29 Md., 178, where a junior mortgage was released and a judgment let in to priority over the mortgage taken subsequently to the release, but for the same consideration as the first mortgage. In Clabaugh vs. Byerly, 7 Gill, 354, it was decided a junior mortgage was entitled to no preference over a prior one by showing the money secured by it was applied in payment of judgments prior in date to the elder incumbrance, and the same ruling was followed in Alderson vs. Ames, 6 Md., 52, where part of the money of the junior mortgage was applied in discharge of a vendor’s lien on the land. In both it was held the prior liens were extinguished by being paid, there being no assignment of either to the junior mortgagee. In Watson vs. Bane, 7 Md., 117, a vendor united with his vendee in a mortgage of part of the lands, and it was held he had thereby waived his lien on the land so mortgaged, in favor of a judgment against the vendee prior in date to the mortgage, and that there was no assignment of the vendor’s lien to the mortgagee byimplication or construction. In Martin vs. Martin, 7 Md., 368, it was determined that a purchaser at sheriff’s sale under a judgment against the lessor before the lease, was entitled to the rent falling due after the accrual of his title, though the lessor may have anticipated it by orders on the tenant which the latter had accepted; and the Court in that case reiterate what is well settled, that the defendant in a — 419 — judgment binding his land, cannot create liens upon it to the prejudice of the judgment, 'and that all persons dealing with him in reference to the land, acquire rights, if any, in subordination to the judgment lien. These are the cases mainly relied on by the appellant, but in none of them is the question now before us settled. On the other hand, in Rawlings vs. Lowndes, 34 Md., 639, it was determined, alter a careful consideration of the authorities, that a widow is not entitled to dower, as against the mortgagee, where the seizin of the husband was under a deed executed and delivered simultaneously with a mortgage by him to secure the purchase money, but that in such case the lien of the mortgage takes precedence of the right of dower, although the title of the mortgagee, like that of the widow, is derived from the seizin of the husband. In that case the widow was allowed her dower because more than two weeks elapsed between the execution and delivery of the deed, and the acknowledgment and delivery of the mortgage, and the Court say, “ In order to exclude the dower right in such cases the deed and mortgage should constitute and form part of one and the same transaction, for if the deed is delivered, no agreement made subsequent thereto between the vendor and purchaser, can affect in any manner, the inchoate right of dower which attached upon the seizin of the husband. It may be laid down as a general rule, therefore, that the deed and mortgage should be executed and delivered simultaneously, or if executed on different days, should be delivered at the same time, as in Mabury vs. Brien, 15 Peters, 21, where the Court say that although the deed was executed prior to the mortgage, the proof is clear that both instruments were delivered and consequently took effect at the same time.” In Heuisler vs. Nickum, 38 Md., 270, a party purchased and received his deed for the land, and three days after-wards mortgaged it, not to the vendor, but to a third — 420 — party, and we held, after a review of the previous decisions, including that of Rawlings vs. Lowndes, that a prior judgment against the vendee had preference over the mortgage, because of the interval of three days during which the interest of the mortgagor in fee under the deed to him, was subject to be seized in execution on the judgment. An agreement of counsel in the case, which at first had escaped the attention of the Court, to the effect that the mortgage was given simultaneously with the deed, and that the money obtained from the mortgagee was applied in payment of the purchase money, induced the filing of a supplemental opinion, in which it was determined that the 3rd section of Article 64 of the Code, applied only to cases where the mortgage is given to the vendor to secure the purchase money, and not to a case where it is given to a third party, though the money thus obtained may have been applied to pay for the property. That was all the Court intended to decide by this supplemental opinion. The priority of the judgment was left' to stand as in the original opinion upon the interval of time between the deed and the mortgage, during which the interest of the purchaser under his deed,-was liable to be seized in execution on the judgment. In Knell vs. Green Street Building Association, 34 Md., 67, there was a judgment after the execution, and before the recording of the mortgage. The latter however, was recorded within the time prescribed by law, and when so recorded, the statute, (Code, Art. 24, sec. 14,) said “it shall take effect as between the parties thereto from its date.” It was there insisted, that as against a judgment creditor without actual notice of the mortgage, it operated only from the time it was recorded. But the decision was otherwise, and the judgment was subordinated to the mortgage. The Court in that case at some length consider the nature of a judgment and the rights it confers. It gives the judgment creditor no right to the land nor — 421 — any estate in it, but simply a lien on it for payment of his debt; and such lien, being a general one, in no wise affects or impairs the vendor’s lien for unpaid purchase money. He is neither in fact nor in law a bona fide purchaser, and must stand or fall by the real, and not by the apparent rights of the defendant in the judgment. Under the doctrine of the first of these cases, (Rawlings vs. Lowndes,) it- is very clear that if instead of a lease, there had here been an absolute deed, and a mortgage, the right of dower in the wife of Ijams, would not have attached as against the mortgage. And we can see no reason why a prior judgment should stand on a better footing than dower, a claim which the law favors above all others. Here the owner of vacant lots in a city, desiring to have them improved, leases them in the usual way, and at the same instant of time takes, a mortgage from his lessee, to secure advances to a specified amount to be paid as the improvements progress. And this is done for the express purpose of enabling the lessee to make such improvements. There is no justice in allowing in such case, outstanding judgments against the lessee to come in and reap the benefit of the mortgagee’s money thus expended, to the exclusion of his incumbrance. We have found no case which expressly sanctions the working of such injustice. On the contrary, the cases cited, recognize principles which justify as in this case, in preferring the mortgage to the judgment, and we accordingly so adjudge and determine. The validity of a mortgage to secure future advances, not to exceed a limited amount, has been definitely settled in Wilson vs. Russell, 13 Md., 494, a case which was very carefully considered, and, has been repeatedly recognized by subsequent decisions of this Court. There are three other questions presented by this appeal, and in disposing of them we find no difficulty. 1st. It is altogether unimportant to the cause, whether the question asked the plaintiff as a witness was objec — 422 — tionable because leading, or whether his answer thereto, to the effect that the lease and mortgage were the embodiment in writing of one transaction, Was admissible in evidence or not. The rulings of the Court, sustaining the question and admitting the evidence, and which form the subject of the first exception, even if erroneous, wrought no injury to the defendant; for, as we have shown, the fact that they constituted one transaction, was conclusively established by the instruments themselves, and the proof, which was undoubtedly admissible, that they were executed on the same day, and left for record together at the record office at the same time. 2nd. Besides his mortgage the plaintiff offered in evidence a record of proceedings in the Circuit Court of Baltimore City for the sale of the property described in the mortgage. These proceedings show that upon petition of the mortgagee a decree for a sale was passed by that Court, under the provisions of the Code of Public Local Laws, relating to mortgages in that city ; that the plaintiff purchased the property at the trustee’s sale under the decree, and that this sale was finally ratified by the Court. It was also agreed that the trustee’s deed for the property had been executed to plaintiff as purchaser under these proceedings. ’ The admission in evidence of these proceedings is the ground of the second exception. The appellant’s counsel insist that the terms of the mortgage do not authorize the passage of any such ex parte decree, and consequently the decree itself and all the proceedings thereunder, are absolutely void, the Circuit Court being without jurisdiction in the premises. Now assuming (without however intimating an opinion to that effect) that this position is sound, what is the result? Clearly this, that the mortgage and the title of the mortgagee thereunder, are left to stand unaffected by such proceedings; and there is no doubt but that the mortgage conveys a legal title quite sufficient to enable — 423 — the plaintiff to maintain this ejectment. There was entire forfeiture at the time the action was brought, and it contains no covenant or clause amounting to a re-demise to the mortgagor. This disposes also of the objection taken in argument, that the deed from the trustee was not executed until the day after the commencement of this suit. 3rd. It is further insisted that the failure of the plaintiff to show title by possession for twenty years in himself or those under whom he claims, is a fatal defect in his case. If the defendant had rested his case upon the plaintiff’s proof, without introducing his own title, this objection would have been well taken. But when his title was introduced it was clearly shown to the Court that he claimed as purchaser at sheriff’s sale, under a judgment against Ijams, the lessee, whilst the plaintiff claimed under a mortgage from the same party. There are many cases in which the well settled rule of ejectment law that to enable a plaintiff to recover he must show title regularly deduced from the State, or adverse possession for twenty years or more, is dispensed with. Instances of such exceptions to the general rule are where the action is brought by a mortgagee against his mortgager, by a landlord against his tenant, by a purchaser at sheriff’s sale against the judgment debtor, and also where both parties claim under conveyances from the same grantor. And in Elwood & Wife vs. Lannon’s lessee, 27 Md., 200, where by an admission of the defendants it was shown that they and the plaintiff both claimed under the same person, it was distinctly decided that it was prima facie sufficient to prove derivation of title from that party, without producing any patents or deeds to prove title in him. In our opinion, the present case falls directly within the reason of these exceptions, and that it was the duty of the Court, upon the state of the case made by the defendant himself, simply to determine — 424 — which was the better title, that under the judgment, or that under the mortgage, both being derived from the same party. (Decided 5th February, 1874.) Finding, therefore, no error prejudicial to the appellant in any of the rulings excepted to, we shall affirm the judgment. Judgment affirmed.