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Western Maryland Railroad, Land & Imp. Co. of Baltimore City v. Goodwin, 77 Md. 271, 26 A. 319

Facts

Charles Ridgly Goodwin, as trustee under the will of George G. Presbury, held a mortgage on property owned by Andrew Banks. After Goodwin was relieved of his duties as trustee, Howard Munnikhuysen was appointed as his successor. Munnikhuysen proceeded to foreclose the mortgage after a default in payment and sold the property, but the defendant objected to the validity of the sale, claiming that the assignment of the mortgage was not properly recorded.

That by a deed of mortgage dated the 3d day of September, A. D. 1889, and recorded on the following day among the mortgage records of Baltimore county in Liber J. W. S., No. 144, folio 292, etc., Andrew Banks and Rebecca E. Banks, his wife, conveyed to Charles Ridgly Goodwin, trustee under the will of George G. Presbury, late of Baltimore city, deceased, the property in said mortgage described, situated in Baltimore county, to secure the payment of a loan of twenty–four thousand and eight hundred dollars, made by the said trustee to the said Andrew Banks.

Issue

Was the sale by Munnikhuysen, trustee, to the plaintiff, under the circumstances herein related, a valid exercise of the power of sale contained in the said mortgage?

The question raised for the decision of this court is: Was the sale by the said Munnikhuysen, trustee, assignee, to the plaintiff, under the circumstances herein related, a valid exercise of the power of sale contained in the said mortgage?

Rule

The power of sale contained in the mortgage allows the trustee or their successors to sell the mortgaged property after default. The assignment of a debt secured by a mortgage operates as an assignment of the mortgage itself.

The terms and provisions of a mortgage constitute the contract between the parties to it. They are at liberty to make such contract as they deem proper, if in so doing they violate no provision of law.

Analysis

The court determined that Munnikhuysen, as the successor trustee, was entitled to exercise the power of sale because he held both the mortgage and the mortgage debt. The court emphasized that the mortgage is a security for the debt, and the assignment of the debt inherently includes the mortgage. The failure to record the assignment did not affect the legal sufficiency of Munnikhuysen's title to the property sold.

The court below, by its order releasing said Goodwin from the further discharge of the duties of the trust, directs him to assign to Munnikhuysen, the newly appointed trustee, the said mortgage and mortgage debt, which was evidenced by a negotiable promissory note for the amount thereof.

Conclusion

The court affirmed the lower court's decree, concluding that Munnikhuysen's sale of the property was valid and that the plaintiff could convey a good and merchantable title.

We have, perhaps, gone to unnecessary length in the examination of this question, but the magnitude of the interests involved seemed to justify it. We, however, entertain no doubt as to the correctness of the answer given by the court below, and we therefore affirm the decree appealed from.

Who won?

Charles Ridgly Goodwin prevailed in the case because the court upheld the validity of the sale conducted by Munnikhuysen, affirming that the assignment of the mortgage and the debt was sufficient for the exercise of the power of sale.

The court below answered and determined this question in the affirmative, and decreed accordingly, so that the sole question now presented for our consideration and determination on this appeal is that which the parties to the cause have formulated and submitted.

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