Shepherd v. Pepper
Shepherd v. Pepper
Dissenting Opinion
dissenting:
;■ I dissent from so much of the judgment of the court in this case as requires the entire property to b.e sold together and •make provision afterwards for dividing the proceeds according -to the váluation that may be made to. ascertain how much of ■the money should go to appellant,. Maria Gray.
<■ I am of opinion that she has a right to haye the .piece of ..ground, on which her mortgage is declared to be the first lien, sold separately, so that she can bid whatever sum she may see ' proper in satisfaction of her mortgage'. If this sum should be -..more than would satisfy the mortgage, of course the excess . would go' to the satisfaction of Pepper’s debt.'' .If it should
Opinion of the Court
delivered the opinion ot the court.
On the 1st of Juné, 1874, Alexander K. Shepherd and his •wife made a’deed of trust to Andréw C. Bradley and William. H. Philipiy’conveying to. them real estate situated in th'e city?
. On the 22d of March, 1875,-Shepherd and his wife executed to William F. Mattingly and the said Andrew O. Bradley another deed of trust, covering the same premises by the same description as in the first deed, to secure the payment to the said Pepper of a promissory note dated March 22, 1875, for $10,000, payable five years' after date, with interest, payablb semi-annually, at the rate .of nine per cent per annum, until paid, accompanied by 10 coupon notes of $450 each, represent*.
'On the 15th of May, 1876, Shepherd and his wife executed a deed of trust to James E. Fitch and Lewis J. Davis, covering premises described as follows: “All that certain piece or parcel of ground situate and lying in the city of Washington, District of Columbia, and known and described upon the ground plat or plan of said city as lot number three (3), in A. K. Shepherd’s subdivision of square number one hundred and ’ sixty-four (164), said lot number three (3), fronting forty-three feet and nine inches (43 ft. 9 in.) on K Street N..W., and one hundred and. nine feet and one-half inch (109 ft. -J- in.). on Connecticut Avenue.” The deed was made to secure the payment of a promissory note for $35,000, made by Shepherd, dated May 15, 1876, given to Mercy Maria Carter, payable three' years after date with interest at the rate of nine per cent per annum, payable quarterly. This deed ■ covered the same premises embraced in the first two deeds of trust, and an additional piece of land in the rear of those premises, having a frontage on Connecticut Avenue of 28 feet 2J inches, and running eastward across the rear part of the premises covered by the first two deeds of trust.
On the 15th of November, 1876, Shepherd and his wife executed an assignment, for the benefit of the creditors of Shepherd, to George Taylor, Henry A. Willard, and Samuel Cross, which assignment covered “lot 3 in square 164.” Willard refused to accept the trust, and Peter F. Bacon was duly appointed assignee in his place.
On the 11th of April, 1878, Pepper filed á bill in equity, in the Supreme Court of the District of Columbia, making as defendants Shepherd and his wife, Bradley, Philip, Mattingly, Taylor, Cross and Bacon. The bill set forth the making and contents of the two deeds of trust in favor of Pepper and of the assignment by Shepherd; that Pepper was still the holder of the note for $35,000 and the note for $10,000, and the coupon notes belonging thereto; that there were large arrears.of interest due.thereon; that the property was largely
There was and is a dwelling-house on the lánd, which covers the entire width on K Street, and at least a part of it extends the entire depth of the land embraced in the first two deeds of trust; and a part of the rear part of it is built upon the land covered by the deed of trust in favor of Mercy Maria Carter which is not embraced in the two deeds of trust in favor of Pepper.
The bill averred that at the time the two loans were negotiated by Pepper he was informed and believed that the two deeds, of trust covered the whole of the house and lots; that he had nothing to do with the preparation of those deeds, but they were prepared bv Shepherd or his attorney; that Pepper' never saw them until after the negotiations Were concluded and the money paid; that Shepherd aloné was responsible for any mistake or omission; that at the dates of the deeds of trust the house was completed and occupied by Shepherd as a dwelling; that sub-lot A in square 164, being the-premises not covered by the two deeds of trust in favor'of Pepper, was at that time owned by Shepherd;, that it was-understood that the two deeds of trust in favor of Pepper would- and did cover the whole area occupied by the house and grounds; that the part of the house not included in those two deeds of trust was what is known as the “picture gallery;” that the rear end of it could be detached without marring .or lessening the value of the property; that the plaintiff was entitled to enforce the collection of the moneys due to him, irrespective of any injury which the sale might do to Shepherd or any one holding under him; and that, in any event, the
, The prayer of the bill was that a trustee. might, be appointed by the court in place of the trustees under the two deeds of trust, with directions and authority forthwith to execute the trusts of the two deeds.
. . Answers to this bill were put in by Mattingly, Bradley and Shepherd, the answer of Shepherd setting úp that the loans to him by Pepper were usurious and void under the laws of the State of Pennsylvania, which governed the contracts. Issue was joined, proofs were taken, and the case was heard at ■special term, which, on the 12th of May, 1879,, entered a decree overruling the defence of - usury, and further decreeing as follows; “That James M.. Johnston be, and is hereby, appointed trustee in the place and stead of Andrew C. Bradley in the deed of trust, and recorded in Liber-, folio-, óf the land records for the District of Columbia, and referred to in the record in this cause. This decree, is without prejudice to all other rights of defendant.”. Shepherd, on the 14th of May, 1879, appealed from this decree to the general term; but, after the sale to Pepper hereinafter mentioned,. he dismissed his appeal.
Johnston and Philip, claiming and purporting to act under the deed of trust of June 1, 1874, and regarding Johnston as having been appointed trustee in the place of Bradley, under that deed, by virtue of the decree .of May 12, 1879, advertised for sale at public auction the premises described in that deed, by, the ^description contained in it. The sale took place on the 23d of October, 1879, and the property was sold to Pepper, at such auction, for $50,000; and Philip and Johnston as trustees, executed and delivered to Pepper a deed of the property.
On the 14th of November, 1879, Shepherd filed a bill in equity in the Supreme Court of the District of Columbia, against. Philip, Johnston, and Pepper, setting forth the sale and the fieecl to Pepper, and alleging that Johnston and Philip' acted without authority in selling the property, inasmuch as •Johnston was not a trustee under the deed of trust, and the
The prayer of the bill was that the sale be set aside and the deed to Pepper cancelled; that the defendants be restrained from interfering with the property, or attempting to enforce aj; law any legal right claimed as a consequence of the sale or the deed; and for general relief.
Philip and Johnston answered the bill, as also did Pepper. Pepper also filed a cross-bill against Shepherd, Philip and Johnston, setting forth the contents of the original bill and. of the answers to it, and praying that the sale to Pepper be decreed to be legal and valid, and the deed to him effectual to convey to. him an unencumbered fee simple title to the real estate; for a writ of assistance to put him in possession of the premises; for a receiver to collect the accruing rents; for an injunction to restrain Shepherd and all persons claiming under him from interfering with the plaintiff in respect of the premises and for general relief.
- A'replication was filed to the .answers to the original bill, and Shepherd, and also Philip and Johnston, answered the cross-bill.' Issue was joined on such answers and proofs were taken. The case was heard at special term, and a decree was made on the 30th of October, 1880, dismissing the bill, with costs, the decree being made by Mr. Justice James. It stated that Shepherd appealed to the general term from the decree. •
On the 24th of December, 1880, Mr. Justice James filed an opinion in the suit, in which he stated that the decree of May 12, 1879, in the suit' of Pepper against Shepherd, was inoperarti ve and void for uncertainty. He added: “It purports to
On the 14th of January, 1881, the defendants in the suit of Shepherd against Pepper entered an appeal from the decree of October 30, 1880. On the 11th of February, 1881, Shepherd dismissed his appeal from that decree. A motion by Shepherd to dismiss the appeal from that decree taken by the defend.ants therein, appears to have been granted by default; and they, on the 25th of February, 1881, filed petitions praying' . the court in general term to reinstate their appeal. . The ground of these petitions was, that the opinion of Mr. Justice James found as a fact that the trustees, Philip and Johnston, had no power to make a sale, which finding did not appear in the decree of October 30, 1880. The court acted upon the petitions for reinstating, by making an order, on the- 17th of June,'18.81;'striking from the files of the court the opinion of Mr. Justice James. This left the decree of the special term, made October 30,. 1880, to stand as a decree merely dismissing the bill of Shepherd.
On the 20th of July, 1881, Pepper began the present suit by ' filing in the Supreme Court of the District of Columbia a bill-in equity against Shepherd and his wife; Mercy Maria Carter, ' who had been married and become Mercy Maria Carter Gray;
The bill sets forth the two deeds, of trust in favor of Pepper and the deed of trust in favor of Mrs. Gray. It avers that Pepper owns and holds the promissory note for $35,000 and the one for $10,000 ; that they are both overdue; that a large amount of interest is due upon them ; that Pepper has advanced moneys on account of taxes and insurance on the premises covered by the three deeds of trust, which moneys are secured by the two deeds of trust in his favor ; that Mrs.. Gray still holds her promissory note for $35,000, which is overdue, with interest from May 15, 1877; and that the parties who claim to be secured by the assignment of Noveinber 15, 1876, a copy of which is annexed to the bill, are very numerous and cannot without inconvenience and delay be brought before the court. It then sets forth the filing of the former bill by Pepper; the contents of the decree of May 12, 1879; the appeal by Shepherd from that decree; the sale of the property to Pepper by Philip and Johnston, trustees; the filing of the bill by Shepherd, the proceedings thereunder, and the entry of the decree of October 30, 1880; the filing of the opinion of Mr. Justice James; and the order striking that opinion from the files.
The bill further alleges, that it is competent to show at any time the grounds upon which the decree of October 30, 188$, was placed by the opinion of the court; that, as that opinion states that the decree of May 12,1879, did not give to Johnston any power to sell, the decree of October 30,1880, was in effect an adjudication upon, and favorable to, the averments in the bill filed by Shepherd; that the sale to Pepper was made, without authority, and that the deed of Philip and Johnston to Pepper was null and void ; that, as Shepherd had always insisted that
The bill further alleges that the said principal sums3 with large arrears of interest, are due to Pepper and to Mrs. Gray, respectively, and sums are also due to Pepper for premiums of insurance and taxes paid by him; that Shepherd had been receiving $6000 per annum as rent for the premises and the furniture in the house; that the incumbrances on the real estate in favor of Pepper and Mrs. Gray, with the arrears of taxes, amount to about $120,000, and are increasing at the rate of about $9000 a year; that the real estate is an inadequate security for the sums charged upon it, and cannot be,sold for a sum sufficient to meet even the existing liens on it, and will not yield from rents an adequate income on ' the sum charged upon it; that Shepherd is insolvent, and there are Unsatisfied judgments of record against him in the Supreme. Court of the District of Columbia, besides unsecured debts estimated by Shepherd to amount to $310,000; that Shepherd is unwilling and unable to make good the deficiency due to Pepper, after properly applying the net proceeds of the sale of the property; and that Bradley refused to sell the property vested in him as trustee under the first deed of trust, and has endeavored to delay and prevent its sale.
The prayer of the bill is for the appointment of a receiver to receive the rents due and to become due for lot 3 and thé improvements upon it; for the appointment of a trustee or trustees-to sell the whole of such lot and improvements ; that the rents and the proceeds of the sale of lot 3 be applied first to pay said indebtedness to Pepper, with all interest, costs,' charges and expenses due to him by reason of the premises; that Shepherd may discover the name of the holder of the legal title to said sub-lot A, and be restrained from receiving or .disposing of any part of the rent paid or to become due for lot 3 and the improvements thereon; and for general relief.
Bradley answered the bill, and took the ground that in the' first bill filed by Pepper the latter had insisted upon his right to the sale of the property as described in the two deeds of trust made in his favor, and did not ask to have the defective description corrected, and had procured the property to ■ be sold, and had purchased it . and received a deed for it, and claimed title to it, by the desóription contained in .those two deeds-of trust." Bradley’s answer also set up that Pepper had brought a suit at law, on the 20th of April, 1880, against' Shepherd to recover on the several promissory notes mentioned' in the first two deeds of trust. .
. The bill was taken as confessed by Pitch,-Mattingly, Alexander and Barker.
Mrs. Gray answered the bill, alleging that at the time the deed of trust in her favor was made she was informed and believed that the two prior deeds of trust covered only the property described in them, and that the deed of trust given to secure her was a second lien op the part of lot 3 described in those deeds of trust, and the first lien on the remaining part of that lot; that, relying on that information, which was true, she loaned to Shepherd the $36,000 on the security of that lot; that she had no knowledge or. information that Pepper claimed that there was any accident, mistake, or fraud in connection with .the first two deeds of trust, or that they should have covered any property beyond what they actually covered;.- and that Pepper has no right to have the first two deeds of trust amended, extended, or changed, as against her, or. any right -to any lien on any part of lot 3, as against her, except that part described in the first two deeds of trust. She objects to a' sale of lot 3.
Cross and Bacon put in an answer to the bill; and the court; on the 1st of December, 1881, on a hearing, granted an injunction as prayed, against all of the defendants except Alexander and Barker, and appointed a receiver of the rents accrued and to become due. The order states that each of. the defendants enjoined appealed from it. Johnston afterwards withdrew his
Shepherd put in an answer to the bill, on • the 1st of June, 1882, denying thát the bill filed by him was dismissed for want of jurisdiction; denying that the omission of sub-lot A from the first two deeds of trust was an accident ór a fraud on his part or on that of his agents ; and -denying that Pepper has the right to have the deeds corrected so as to include sub-lot A; but admitting that he (Shepherd) executed the first two deeds of trust in the belief that the whole property covered by the house was embraced in them. The answer sets up that Pepper has no right to the rents of the house or to the rent of the furniture contained in it, and no interest in the premises •except to have them sold and his claims paid out of the proceeds of sale; that the subject matter of the bill' is embraced, in the prior suit brought by Pepper, which is still pending; and that, if Pepper has any right to relief, he must seek it in that suit by bill of review or otherwise.
On the 21st of July, 1882, Pepper amended his bill by averring that lot 3 was wholly insufficient security for the debt admitted by Shepherd to be due to Pepper and charged thereon, and could not be sold for a sum sufficient to meet the debt so admitted, and would not yield in rents an adequate income on the value of the same, even assuming such value to be equal to the amount of the debt admitted to be due to Pepper and charged on the lot. The amendment also stated that Philip died intestate, leaving surviving him a widow and four children, infants, whose names were given, and added the names, of' such children as defendants. It also stated that Pepper was willing to surrender, and did thereby surrender, for the purpose of a resale' of the said real estate, any title in fee simple which he might have thereto by reason of the deed to him from ^Philip and Johnston, trustees; and that, for the purpose of reselling such real 'estate, he waived any interest, claim, or title vested in him by that deed, and offered to make any conveyance which the court might deem proper or necessary to accomplish the purpose indicated.
The bill and amendments were answered' by Davis, Pitch
Shepherd also answered the amendments, alleging that the' proposed offer by' Pepper was no actual surrender of any interest or waiver of any right.
The order fro confesso as to Mattingly having been vacated,' he put in a plea, setting up the sale and the. deed to Pepper, the filing of the bill by Shepherd and of the cross-bill by Pepper, and the decree of October 30,.1880, and averring that Pepper, ever since the deed to him, had claimed to be the owner of the property in fee simple, and still so claimed.
The bill was taken as confessed against the wife of Shepherd ; a guardian ad litem was appointed for the infant.children of Philip, who put in an answer to the bill; Johnston and Bartlett also answered it and the amendments; issue- was joined as to all the. defendants who had answered; and the plea of Mattingly was ordered'to stand as his answer;
Proofs were táken on b,oth sides, the cause’was heard by the court in. special .term, and afterwards, on the 24th of March, 1885, Shepherd presented to the court two petitions, wherein he set forth the bringing of á suit at law against him by Pepper, on the 20th of May, 1882, .upon the promissory notes;, that at the hearing he learned for the first 'time that Pepper claimed a personal decree . against him,-under the prayer in the bill for general relief; that, when the. claim to such personal decree was made at the hearing, his personal liability upon the notes w^as barred by the statute of limitations, because the notes were all of them then more than three years overdue; and; that he ought to be allowed to interpuse that objection to a personal decree. He therefore prayed, for a hearing on’ the subject of the- right of Pépper to a personal decree.against him, and’ to be allowed to take proof as.tojthe
On the 26th of March, 1885, the court in special term made a decree,' that unless Shepherd should pay to Pepper, on or before the 1st of July, 1885, $35,000, with interest thereon at the rate of nine per cent per annum from the 1st day of June, 1879, until paid, and the further sum of $9450, being the amount of six coupon notes, all dated June 1, 1874, signed by Shepherd, and representing six semi-annual instalments of ■interest due by him on the principal sum of $35,000, with interest upon them at the rate of six per cent per annum until paid, namely, upon six sums of $1575 each, one from December 1, 1876, one from June 1, 1877, one from December 1, 1877, one from June 1, 1878, one from December 1, 1878, and one from June 1,1879, and also the sum of $10,000 due to Pepper, with interest thereon at the rate of nine per cent per annum from March 22,1880, until paid, and the further sum of $3150, being the amount of seven coupon notes, all dated March 22, 1875, signed by Shepherd and representing seven semi-annual instalments of interest due by him on the principal sum of $10,000, with interest on them at the rate of six per cent per annum until paid, namely, upon seven sums of $450 each, one.. from Marcel 22, 1877, one from September 22, 1877, one from March 22,1878, one from September 22,1878, one from March 22, 1879, one from September 22, 1879, and ope from March'" 22, 1880, and also the taxed costs of the suit," lot 3 in Shepherd’s subdivision of square 164, with the buildings and improvements thereon, be sold at public auction, by Henry W.
Shepherd, Bartlett, Bacon and Cross appealed to the geiy eral term from this decree; Mrs. Gray appealed from so mueh of it as directed the sale of sub-lot A; and Pepper also.appealed from it.
Shepherd, Cross, Bacon, Bartlett and Mrs. Grajr appealed in open court to this court, from the decree of October 29, 1885, the appeal was allowed, and the amount of the supersedeas bond on behalf of the defendants other than Mrs. Gray was fixed at $1000, and that on her behalf at $100. The appeal of. Pepper was abandoned. The defendants other than Mrs. Gray gave the - bond required of them. Mrs. Gray did not give the necessary bond; and, although the record was filed in this court on the 9th of October, 1886, she took na action to perfect her appeal to this court until, the case came on for hearing, on the 26th of November, 1889, when she offered to the' court to be filed a proper bond in the sum of $100. No citation was necessary on her appeal, as she had taken it in open court, the recprd had been duly filed in'this court," on October 9pl886, and, under the circumstances, we will permit'the bond
At the time the loans were made by Pepper to Shepherd; Shepherd claimed to own and agreed to give as security therefor, the land and improvements situated at the .northeast corner of Connecticut Avenue and K Street, fronting 43 feet 9 inches on K Street, and 109 feet inch on Connecticut Avenue, containing 8466.22 square feet, known as lot No. 3 in Shepherd’s subdivision of lots in square No. 164. The improve-, ments covered nearly the whole of that lot, the portion not so covered being enclosed and used in connection with the house. It was the intention of both Pepper and Shepherd that the whole of this property should be included in the deeds of trust; and if Pepper had any knowledge, information or. suspicion to the contrary, he would not have loaned any of the money. Shepherd testifies that when he executed the deeds of trust, he supposed that they embraced the whole property. On the piece of land known as sub-lot A,- being that part of lot 3 which fronts 28 ■ feet 2-|- inches on Connecticut Avenue, and has such a depth that it contains 3656 square feet, there had been actually constructed at - the time a -portion of the dwelling-house, which includes the coal-vaults, the laundry, the servants’ apartments, and a .portion of the. picture gallery.
It is not'denied by Shepherd that the debts due byjiim to Pepper are Iona, fide debts, and are overdue; and their existence and amounts are satisfactorily proved. The sole defence of Shepherd amounts to this, that by the uncertainty and delay of. the law, and by mistakes in the legal proceedings, Pepper has lost all right to the execution of the trusts created for his' benefit; and it is urged that, by reason of the proceedings'in the prior suit brought by Pepper, he is estopped from maintaining the present bill.
The opinion of' the court in general temí, delivered by Mr. Justice Merrick, is reported in 4 Mackey, 269. It states that when the'decree of May 12,1879, in the suit brought by Pepper,came to be made, there was by inadvertence an error-in the description of the property in the decree, by leaving a blank in the designation of the trust deed,, the result of which was
The bill in the first suit brought by Pepper was a bill merely to substitute a trustee in the place of the trustees in the first two deeds of trust.,' The prayer of the bill was that such trustee be appointed, with directions and authority forthwith to execute all 'the trusts reposed by the first two deeds-of trust in the trustees mentioned therein.' It does not pray that' an officer of the court shall make- the sale, or that the trustee, to be-appointed by the court shall make the sale under any po\vér to be given to him by the court; but it prays that' he may execute the trusts under the deeds of trust. - Moreover, j-ihe decree of May 12, 1879, declares that it is made “ without prejudice to all other rights-of defendant.” '■ This reserved the right of Shepherd to be heard on -the question of the right of Pepper' to foreclose under the deeds of trust. The present suit is a suit for foreclosure, and in it all defences to-the claims - .of Pepper were open to be made by Shepherd. In respect of
For the same reason, Pepper cannot be regarded as having made any election, in the first suit brought by him, to enforce •a sale of the property described in the first two deeds of trust aside from a sale with it of sub-lot A, so as to be estopped from now asserting a lien upon, sub-lot A. • "When the first bill was filed by Pepper, he knew that Shepherd had merely a tax title to sub-lot A; and Shepherd, in his answer to that bill, averred that the title to sub-lot A never belonged to him, and that he theretofore purchased what is called a tax title to sub-jot A, but it turned out to be void and of no effect. Therefore, Pepper could not at that time have attempted to reform the first'two deeds'of trust so as to include sub-lot A, because Shepherd then had no title to that sub-lot. But the fact that both Pepper and Shepherd agree that it was intended by them that the first two deeds of trust should include sub-lot A, gave Pepper a right to assert an equitable mortgage against that sub-lot; so that afterwards, when Shepherd bought in the proprietary title to it, as the evidence shows he did, Pepper was for the first time in a position to assert a lien against it.
It is, we think, very plain that Pepper acquired no title by the deed to him under the sale by the trustees, arid that the decree dismissing the bill filed by Shepherd had no effect to .establish any legal title in Pepper to the real estate in question. Even if resort may not be had to the opinion of Mr. ■Justice. James, still it is manifest that the proposition^ stated in that opinion are sound, namely, that -if the decree’of May; 12, 1879, was uncertain on its face, in the respects and to the extent before mentioned, the alleged title of Pepper, through the deed from the trustees to. him, was not a cloud upon the title of Shepherd, and therefore the court could not , grant
This view of the case is taken by Pepper, in his bill in the present suit, because he says therein, in regard to the decree of May 12, 1879, and the opinion of Mr. Justice James, “that,, as- it appears by the said opinion of the court that the said decree did not give to the said Johnston-any power to sell, said decree was in effect, an adjudication upon and favorable to -the averments in said Shepherd’s bill of complaint in said court that said sale was made without authority- and the deed of said Philip and Johnston was null and- void, and, as the said Shepherd has always averred' and insisted that said decree was void and said sale a nullity, and to the end that said lot 3 of said Shepherd’s subdivision may be sold as a whole, the complainant files this bill in order that an undisputed title to the whole property may be obtained by means of foreclosure proceedings under the order and decree of this court.” Then the bill prays accordingly, “ that a trustee or trustees may be appointed by this court to. sell the whole ..of lot,3, in A. P. Shepherd’s subdivision of square numbered 164, .with the improvements thereon.” Therefore, it- is not true that Pepper is still asserting a legal title in himself. -
We think that Pepper is entitled to.have thó whole of lot 3 sold. It was omitted at least by accident from the first two trust deeds, when both parties supposed -they covered it. Lot 3 embraces not only sub-lot A, but the próperty covered by the first two deeds of trust. Shepherd, in his answer to the first bill filed by Pepper, said, “ that, .in his opinion, it would be impossible to make á sale and division of. the said property, under the said deed of trust without irreparable injury to, if not total destruction of, a large portion of the dwelling-house which is erected upon the said lot; . -. . that the said dwelling-house would be entirely incomplete without the addition of that portion called the ‘ picture-gallery; ’ that the ser- • vants’ apartments and’ the laundry and drying-room, etc., fete., are underneath the said portion of said dwelling-house,, as well as the heating apparatus foi, alargfe portion'of the house-; and that, if the said lot A, which is not included in the deed of
In regard to 'Mrs. Gray, the letter to her, written by Mr. Brown, of the firm of Fitch, Fox & Brown, who were negotiating for her the loan to Shepherd, the letter being dated April 18, 1876, speaks of the loan as one “to be secured by a second mortgage, the prior mortgage being for $45,000.” Bésides this, the first' two deeds of trust were recorded respectively June 3, 1874, and March 24, 1875, and they conveyed, to secure ’ Pepper, the. premises described in them, “ together with' all the improvements, ways, easements, rights, privileges, and appurtenances to the same belonging or in anywise appertaining, and all the estate, right, title, interest and claim, whatsoever, whether at law or in equity; of the said parties of the first part, of, in, to, or out of the said piece or parcel of land and premises.” .The improvements and easements in question were visibly necessary for' the dwelling-house as then -Constructed, and were visibly upon, or required the use of, sub-. lot A, ás stated- by Shepherd, as before recited.
Mrs. Gray is only a mortgagee, and. not the owner in fee, of sub-lot A; and her interest in the property is subject to the prior and subsequent interests' of other parties, as those interests 'are usually ascertained ■ and. administered by a court .of ' equity for the benefit of all concerned. It is not equitable . that she should be allowed to use her mortgage on sub-lot A” •to prevent a sale of the entire lot 3. Her only right can be to •'-have the proceeds of sub-lot A applied first to the payment of ■Her debt; and that-right is secured by the decree appealed from. - "
■ ;■ -The present bill is one to- obtain a decree for the sale of ¿ncumbered premises and the application of the proceeds of sale to discharge the encumbrances according to priority. The debts to Pepper and to Mrs. Gray are overdue; and under such circumstances a court of equity, on the application of a junior encumbiáncer, will provide, for. the sale of the- entire
• ' There was no, error in the dismissal of the two petitions of Shepherd, filed in March, 1885,'nor in entering a personal decree against him for any deficiency which should remain after exhausting the' property covered by the deeds of trust. .
The fact of the bringing of the suit .at law upon the notes, • by'Peppér against Shepherd, in April, 1880, was set up in the , answer óf Bradley, to the bill in the present suit, and was therefore in issue ; but it was not shown in defence that' Shepherd had ever been served'with process in any such suit at .law, or had appeared'in it, voluntarily or otherwise. Moreover, the principal notes given to Pepper were not barred by limitation when the bill in this case was filed. As to the interest, notes or coupons, although some of the unpaid ones for each of such two principal notes had been overdue more than three years when the bill was filed, yet it makes a claim' to recover ■ all the interest, and Shepherd does not, in his, answer,- set up the statute of limitation as a bar to any part of the principal or interest claimed.
The bill in this suit prays for. general relief, and a decree
As to the question of the disposition of the rents in the hands of the receiver we think the action of the court below-was proper. The pecuniary condition of Shepherd, his failure to pay taxes, premiums of insurance, or interest, the inadequacy of the property to pay the claims of Pepper and Mrs., Gray, and the diversion of the income from rents, from making such payments, to thp use of Shepherd, up to the time of the appointment of the receiver, were adequate- grounds for the appointment of the receiver. Kountze v. Omaha Hotel Co., 107 U. S. 378, 395; Grant v. Insurance Co., 121 U. S. 105. The court, through its receiver, took possession of the rents in order to preserve them for that party to the suit who. should! ultimately be found to be equitably entitled to them. Hitz v. Jenks, 123 U. S. 297, 306. The various reports of the receiver contained in the record, as to" his payment of taxes, premiums of insurance and the expenses of repairs on the
It is contended on behalf of Shepherd that the decree appealed from is erroneous, because it allows interest at the rate of nine per centum per annum on the principal of the notes, from June 1,1879, and March 22,1880, respectively, until paid; and it is urged, that the interest should have been fixed at the rate of six per cent, from the date of the decree, March 26, 1885, on the ground that that was the rate of interest fixed by the statute on judgments and decrees.
Section 713 of the Revised Statutes relating to the District of Columbia provides as follows: “ The rate of interest upon judgments or decrees, and upon the loan or forbearance of any money, goods or things in actions,- shall continue to be six dollars upon one hundred dollars- for one year, and after that rate for a greater or less sum, or for a longer or shorter time, except as provided in this, chapter.” Section 829 of said Revised Statutes provides as follows: “Upon all judgments rendered .on the common law side of the court in actions founded on contracts, interest at the rate of six per cen.tum per annum shall be awarded on the principal sum due until the judgment shall be satisfied, and .the amount Avhich. is to bear interest and the time from which it is to be paid shall.be' ascertained by the verdict of the jury sworn in the cause.” ■ Section 714 authorizes parties to contract in Avriting for the payment of interest at the rate of 10 per cent per annum.
It is urged that the decree is a decree Avhich fixes the amount of each of the debts due by Shepherd, and says that those sums are “ hereby decreed to be due and payable ” by Shepherd, to Pepper, with interest, eto. ; that this is the language of a judgment ; and that almost the same language is employed in reference to the accrued interest. The decree provides that, if the net proceeds of the sale shall prove insufficient to discharge the claims of Pepper, he- shall have and recover of Shepherd whatever amount may remain due of the .claims decreed to be due by Shepherd to him, after the ap
■ We think, however, that on the face of the decree the court did not intend to, and did not, merge the contract in the decree; but merely fixed the amount due according to the terms of . .the .contract on the. payment of which, before the day fixed, the decree would not go' into'effect; but the case would be-dismissed. I The statute has'no application, except as to the rate of interest charged on the deficiency which shall be found to' exist after applying the net proceeds of sale to the debt,, and the decree does not provide for interest in excess of six', per cent per annum-on such deficiency. ' ,
.. In regard to allowing interest on the principal óf the notes .at the rate of nine per cent per annum until paid, it is to be said. that such was the contract m each note.
.. It was stated at the bar that Hanna, one of the trustees ap pointed by the decree óf the special term to make the sale, had diedi If so, the court beiow will have power to appoint a new -one in his place. -
The decree in general term is, therefore,
Affirmed. ;
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- Where appeals by five defendants from a final decree were allowed in open court in October, 1885, and the amount of the supersedeas bond as to one of them^was fixed at $100, but he never gave it, and the others perfected their appeal, and the record was filed in this court in October, 1886, and, when the case came on for hearing in November, 1889, he asked leave to file a proper bond, it was granted mine pro tune as of the day of hearing. S. gave two deeds of trust of a lot of land in the District of Columbia to secure loans made by P. Afterwards he gave a deed of trust of the same lot to secure a loan made by C., that deed covering also a lot in the rear of the first lot, and fronting on a side street. At the time all the deeds were given, there was a dwelling-house on the premises, the main part of which was on the first lot,..but some of which was on the rear lot. P., on an allegation that B., a trustee in each of the first two deeds, had refused to sell the property covered by them, filed a bill asking the appointment of a trustee in place of those appointed by the- first two deeds. The suit resulted in a decree appointing a new trustee in place of B., “ in the deed of trust,” but not identifying which one. The new trustee and the remaining old one then sold the land at auction-to P., under the first trust deed. S. then-filed a hill to set aside the sale; and P. filed a cross bill to confirm it. The bill was dismissed. P. then filed, this bill against S. and C., and all necessary parties, to have a trustee appointed to sell the land covered by the three trust deeds, and the improvements on it, to have a receiver of the rents appointed, and to. have the rents and the proceeds of sale applied first to pay P. A receiver was appointed, and a decree made for the sale of the entire property, as a whole, by trustees whom the decree appointed, and for. the ascertainment by the trustees of the relative values of the land covered by the first two trust deeds and the improvements thereon, and of the' rear piece of land and the improvements thereon, and for the paymeht to 3?. of the net proceeds of sale representing the value of the land and improvements covered by the first two trust deeds, less the expenses, chargeable thereto, and of the residue to C., and, out of the rents, to P., what he had paid for taxes and insurance prem.'ims, and for a personal decree against S., in favor of P., for any deficiency in the proceeds of sale to pay the claims of P.; Held, (1) It was the intention of both S. and P. that the first two deeds of trust should include the rear land as well as the front lot; (2) The decree in the first suit by P. was so uncertain as to be practically void, and there was no effective appointment of' a trustee and no effective sale to P.; (3) P. was not estopped by that sale from having the property sold. again; (4) P. was not required, as a condition of the sale of the rear lot, to pay the whole of the debt due to C,; and the case was a proper one for selling the property as an entirety; (5) It was, also, a proper one for the appointment of a receiver of the rents, and those rents in the hands of the receiver, after paying charges, ought to go to make up any deficiency in the proceeds of sale to satisfy the corpus of all the secured debts, and ought to be first applied to pay any balance due to P.; (6) Under § 808 of the Revised Statutes relating to the District of Columbia a decree in personam for a deficiency is a necessary incident of a foreclosure suit in equity; (7) As the notes secured by the deeds of trust bore interest at the rate of nine per cent per annum-, until paid, it was proper to allow, that rate of interest on the principal until paid, and not to limit .-the rate to six per cent after decree, because the contracts were not-merged in the decree; (8) The rate of interest on the decree for deficiency is properly six per . cent, under §§ 713 and 829 of said Revised Statutes. (9) The statute of limitation rot having pleaded as to any part of the principal or interest, the defendant cannot avail himself of it.