Leonard v. Groome

Stewart, J., delivered the opinion of the Court. In this case exceptions on the part of the purchaser were filed to the sale made by the trustees appointed hy the Court to foreclose an elder mortgage, alleging amongst other things, that there were outstanding junior liens, the holders of which had not been made parties to these proceedings, and his title was thus encumbered. The Circuit Court properly overruled the exception and confirmed the sale. - The right of the purchaser under the sale made in this case is paramount to any junior mortgages or liens, whether the holders of such liens are made parties or not. They are presumed to have notice of the existence of the prior mortgage, and whilst proceedings are pending for its foreclosure, may come into the Court of equity, be made parties, redeem the elder mortgage or assert their claims to any surplus, after satisfaction of the elder mortgage and incidental expenses. The sam'e rule governs at law. The purchaser at a sale under process of execution upon a senior judgment holds the title above junior judgments and cannot be disturbed thereby. The holders of the junior judgments may resort in that forum to any surplus after satisfaction of the execution. Where sales are made under power given in the mortgage in pursuance of the provisions of the 64th Art. of the Code, the purchaser acquires all the title which the mortgagor held in the mortgaged premises at the time of recording the mortgage. (Sec. 10, Art. 64, Code.) By the 11th sec., any person claiming an interest in the equity of redemption, may apply to have the surplus of the proceeds equitably applied and distributed. [505] (Decided February 20th, 1878.) This is analogous to the right existing on the part of subsequent holders of liens in regard to sales in Chancery under the usual modes of proceeding. Upon a bill filed to enforce an elder mortgage, it is always proper that junior mortgagees should be made parties, and if application for that purpose be made to the Court while the proceedings are in fieri, or if the Court’s attention is called to the fact that there are junior mortgages or encumbrances, the Court will direct such junior encumbrancers to bo made parties. This is in accordance with the best practice. But after a decree and sale, the omission to make such junior encumbrancers parties, is no valid objection to the ratification of the sale, especially not by the purchaser,— who holds his title disencumbered of any claims of junior lien-holders. See Brawner vs. Watkins, 28 Md., 217. Order affirmed, and cause remanded.