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Silver and Cooper v. Benson

Decided: February 19, 1962.

SILVER AND COOPER, TRUSTEE
v.
BENSON ET AL.



Appeal from the Circuit Court for Anne Arundel County; Evans, J.

Brune, C. J., and Henderson, Hammond, Horney and Marbury, JJ. Henderson, J., delivered the opinion of the Court.

Henderson

Robert C. Benson, eighty-three years of age, his wife and daughter, Kathryn Benson, were the owners of a tract of land laid out in building lots, which they agreed to sell to Twin

Development Company, Inc., for a total price of $28,300. They received down payments totalling $2,500, and at the settlement on May 13, 1959, received two checks from Thomas P. Burgee, President of the purchasing corporation, drawn on his personal account, one in the sum of $18,300, and the other in a sum to cover an adjustment of rent and taxes. They executed and delivered a deed to the property, which was subsequently recorded, as was a purchase money mortgage for $7,500, representing the balance of the purchase price. Both checks were returned with the notation "no such account", but the vendors took no immediate action because of Burgee's promises to make good, which he never performed.

The appellant, Silver, advanced $19,000 to Burgee in exchange for a mortgage of $22,000 which was recorded on August 5, 1959. Foreclosure proceedings were instituted on October 23, 1959. Burgee had also purported to convey some of the lots to other parties. On November 23, 1959, the Bensons filed a bill in equity praying the court to assume jurisdiction over the property, to determine the rights of the various parties, and to determine whether the mortgage to Silver was a bona fide transaction, and "what consideration, if any, passed for said mortgage". The bill also prayed an injunction to prevent the respondents from selling or encumbering the property, and to prevent Cooper, trustee under the Silver mortgage, from making the foreclosure sale "now scheduled for December 1, 1959." The chancellor signed an order to show cause. Both Silver and Cooper answered, claiming that the mortgage was bona fide, and for a good consideration. None of the other respondents answered, and as to them the bill was taken pro confesso. The record does not disclose that any injunction was issued, but the scheduled sale was not held, and apparently the pending foreclosure proceeding was dismissed.

The record shows that there was an extended hearing on the merits of the case. On January 13, 1961, the chancellor filed an opinion in which he found as a fact that the checks given by Burgee were known by him to be drawn on non-existing accounts, and that Burgee took improper advantage of his relationship with Miss Benson, in a fraudulent scheme to obtain the property. Hence he declared that the deed should

be set aside, and the title revested in the Bensons. He found, however, that Silver had advanced money upon the faith of the conveyance and without knowledge of the fraud, that the undisputed evidence showed that there was consideration for the mortgage, $19,000, paid to Burgee and $3,000, "retained as a service and legal fee", and that the mortgage "was a bona fide transaction for a valid consideration." He stated that he would sign a decree setting aside the deed, subject, however, to the legal operation and effect of the mortgage.

Apparently, counsel on each side submitted decrees. The form of decree submitted on behalf of Silver and Cooper stated that the mortgage was valid to the extent of $22,000. The form of decree submitted on behalf of the Bensons declared the mortgage valid only to the extent of $19,000. This latter form of decree was signed on February 28, 1961, but amended by interlineation dated March 17, 1961, to declare the mortgage valid to the extent of $20,000.

The appellants then filed a petition, claiming that the decree was contrary to the court's opinion, and alleging that after the date of the filing of the opinion they had instituted a foreclosure proceeding before another judge of the same court. They prayed a dissolution of the restraining order incorporated in the decree. The court declined to modify its decree, and an appeal to this Court was duly entered. Thereafter, a decree was passed submitting the matter to an auditor, and his report of the sum due Silver under the prior decree was filed and accepted by the parties. On the basis of a mortgage indebtedness of $20,000, with interest and allowances for expenditures and rents collected, the amount due was fixed at $22,087.58. A decree was signed providing that if said sum was not paid into court before September 5, 1961, the trustees named in the prior decree should proceed with public sale of the mortgaged property. This sum was duly paid into court. Thereupon, an order was passed discharging the trustees.

The appellees moved to dismiss the appeal on the ground that the appellants failed to comply with Maryland Rule 828 b. The appellants deny that they are raising any factual issue, and that it was necessary to print those portions of the record ...


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