A mortgage foreclosure proceeding under a power of sale cannot be attacked collaterally. [Ed. Note.-For other cases, see Mortgages, Cent. Dig. § 1140; Dec. Dig. § 378.*]

5. MORTGAGES (§ 372*)-FORECLOSURE SALE— TITLE ACQUIRED.

Under Code Pub. Gen. Laws 1904, art. 66, § 11, providing that a mortgage foreclosure sale under power of sale shall pass the title which mortgagor had "at the time of recording the mortgage,' a sale passes title, though at the time of foreclosure mortgagor may have been without title.

Dec. Dig. § 372.*1
[Ed. Note.-For other cases, see Mortgages,

ing in one's possession, with intent to sell, | 4. MORTGAGES (§ 378*)—FORECLOSUre-Colmilk to which a foreign substance has been LATERAL ATTACK. added, is committed by having with that intent cream to which boracic acid has been added." 1 Cyc. 945, note 25. In the case of Commonwealth v. Smith, 149 Mass. 9, 20 N. E. 161, the court said: "The complaint is for selling milk not of the standard quality of pure milk; that is, milk containing less that 13 per cent. of milk solids. The defendant had a right to sell skimmed milk, which is not of the standard quality of pure milk from cans marked in a certain manner. If he sold milk not of the standard quality of pure milk, and not sold as skimmed milk from duly-marked vessels, he would be liable on this complaint." Under a statute declaring that milk from which the cream has been removed is impure milk, and prohibiting the sale of impure milk, it would not be a sufficient answer to the charge of violating the statute to say that the article sold was skimmed milk; so, under the sections of the Code referred to, prohibiting the sale of impure condensed milk, that is condensed milk manufactured from milk from which the cream has been removed, an indictment charging the sale of impure condensed milk cannot be effectively met by the plea that the article sold was "condensed skimmed milk."

We cannot therefore accept the view earnestly pressed by the learned counsel for the appellant, but, concurring in the conclusions reached by the court below, must affirm the judgment.

Judgment affirmed, with costs.

(109 Md. 474)

FELGNER'S ADM'RS v. SLINGLUFF. SLINGLUFF v. FELGNER'S ADM'RS. (Court of Appeals of Maryland. Jan. 12, 1909.) 1. MORTGAGES (§ 295*)-ACQUISITION OF PROPERTY BY MORTGAGEE-MERGER.

Where, prior to a deed by mortgagors to mortgagee, the mortgage had been assigned to a third person, there was no merger of the mortgage, since for that there must be a union of titles in the same person at the same time.

[Ed. Note. For other cases, see Mortgages, Cent. Dig. § 829; Dec. Dig. § 295.*]

2. MORTGAGES (§ 295*)-ACQUISITION OF PropERTY BY MORTGAGEE-MERGER.

Though the equity of redemption is acquired by the mortgagee, the mortgage is not thereby necessarily merged, but it depends on mortgagee's intent; and, where it is for his benefit to do so, the presumption is that he intended to keep the mortgage alive.

6. MORTGAGES (§ 378*) — FORECLOSURE — EF

FECT.

Where a mortgage foreclosure sale was made to perfect what was deemed to be a defective title under a deed from mortgagors or mortgagee, the title thereby acquired by mortgagee did not destroy the equity which one of the mortgagors had under an agreement that the deed should be executed to mortgagee, but that such mortgagor should have the surplus, if any, more than his claim. if the mortgagee should sell the premises for

[Ed. Note. For other cases, see Mortgages, Dec. Dig. § 378.*]

7. MORTGAGES (§ 378*)-FORECLOSURE-CONCLUSIVENESS-MATTERS Concluded.

A mortgage foreclosure proceeding under a power of sale, confirmed by the court, is not res judicata of a subsequent bill by one of the mortgagors against mortgagee for an accounting, under an agreement to execute a deed to mortgagee, but that such mortgagor should have the surplus, if any, if the premises should be sold for more than mortgagee's claim.

[Ed. Note. For other cases, see Mortgages, Dec. Dig. 378.*]

8. MORTGAGES (§ 376*) — ACCOUNTING - EVIDENCE-SUFFICIENCY.

Evidence upon a bill for an accounting, under an alleged agreement by mortgagors to deed the premises to mortgagee, but that one of them should take any balance over mortgagee's claim, held to establish that there was such an agreement.

Cent. Dig. § 1132; Dec. Dig. § 376.*]
[Ed. Note.-For other cases, see Mortgages,

9. MORTGAGES (§ 376*) — ACCOUNTING — EVIDENCE-SUFFICIENCY.

Evidence held not to show a mistake in the amount of the mortgage.

[Ed. Note. For other cases, see Mortgages, Dec. Dig. § 376.*]

10. MORTGAGES (§ 376*)—ACCOUNTING-EVIDENCE-SUFFICIENCY.

Evidence held not to show that mortgagor was entitled to a certain credit. [Ed. Note.-For other cases, see Mortgages, Dec. Dig. § 376.*]

11. MORtgages (§ 376*)—ACCOUNTING.

The mortgagor was properly not charged with the costs of a mortgage foreclosure sale of the premises, where there was no necessity for that proceeding, and under the agreement it should not have been resorted to without consulting mortgagors.

[Ed. Note. For other cases, see Mortgages, Cent. Dig. § 1132; Dec. Dig. § 376.*] 12. MORTGAGES (§ 376*)-ACCOUNTING.

The mortgagor. should not be charged with the expenses connected with a supposed defect

[Ed. Note. For other cases, see Pledges, Dec.luff, and Mr. and Mrs. Slingluff gave Mr. Dig. § 30.*]

Cross-Appeals from Circuit Court of Balti-gether with an adjustment of taxes, $17.97, more City; Thos. Ireland Elliott, Judge.

this was to get the property in a condition | ceived, the insurance money, and rents more that would enable them to dispose of it to the than paid Mr. Felgner, who she alleges was best advantage, in order to pay off the mort- compelled to give her the surplus under the gage and have some surplus for the benefit agreement. The defendant denies there was of Mrs. Slingluff, which she claims it was any surplus, but contends that if there was, agreed she should have. The insurance poli- the foreclosure proceedings preclude any recy was assigned to Mr. Felgner, but the trus- covery. The first question, therefore, to be tees in bankruptcy of Mr. Slingluff made a determined by us is the effect of those prodemand for it, and after some litigation the ceedings. matter was finally compromised by dividing the value of the policy, which resulted in Mr. Felgner receiving $3,574.15. Mr. Slingluff, who represented his wife, and Mr. Dillehunt, who represented Mr. Felgner, who was his father-in-law, practically agree as to what that agreement was, excepting Mr. Slingluff claims that the rents for 1900 were to go to Mr. Felgner, while Mr. Dillehunt contends that the payment of rents to him was to begin with those of 1901. The rents were derived from the property during the summer season. Mr. Slingluff rented the property to David Hutzler for the summer of 1900 at $1,400, to Louis Hamburger for the summer of 1901 at $1,400, and to Levi Greif for the summer of 1902 at $1,200, and Mr. and Mrs. Slingluff expended money and time with a view to making the property attractive to purchasers.

There were a number of interviews between Mr. Slingluff and Mr. Dillehunt, and considerable correspondence passed between them, some of which will be hereafter referred to; the letter of October 11, 1902, bearing more particularly on the agreement that Mrs. Slingluff was to have the surplus, over and above the claims and expenses of Mr. Felgner, out of a sale of the property. On February 24, 1903, a deed was executed by the Slingluffs to Mr. Felgner for the property embraced in the mortgage, which was duly delivered to Mr. Dillehunt, but he put it in his safe and never recorded it. On April 17, 1903, Mr. Dillehunt, as assignee of the mortgage, reported a sale of the property under the power of sale to the circuit court for Baltimore county, in which report he states that he sold the property on April 8, 1903, to Mr. Felgner for $24,000. That sale was in due course ratified by the court, an auditor's report was filed and ratified, and the deed was made by Mr. Dillehunt, assignee, to Mr. Felgner on May 13, 1903. Both Mr. and Mrs. Slingluff deny any knowledge of that foreclosure sale until the matters connected with this suit were placed in the hands of Mr. Bartlett, who, they allege, first told them of it, and they claim that they supposed the deed which they executed had passed the title to Mr. Felgner, subject to the agreement which they say then existed. Before this bill was filed Mr. Felgner had sold part of the property to Charles D. Fitzgerald for $27,500 (as we understand the amount), and the balance to the Western Maryland Railroad Company for $5,812.50, and the

1. We cannot agree with the counsel for Mrs. Slingluff that there was a merger by virtue of the deed of February 24, 1903. A sufficient answer to that contention is that before the deed was made, to wit, on October 31, 1902, the mortgage had been assigned to Mr. Dillehunt. While he undoubtedly took the assignment subject to all equities existing between the mortgagor and mortgagee, the legal title was transferred to him, and hence there was no merger by reason of the deed to Mr. Felgner. The general rule is that "in order for the mortgage to be extinguished by the union of titles of the mortgagor and the mortgagee, such titles must unite in the same person at one and the same time." 20 Am. & Eng. Ency. of Law, 1068. Even when a mortgagee acquires the equity of redemption in his own name, it does not necessarily follow that the mortgage becomes merged and extinguished, but it depends upon the intention of the mortgagee; and, when it is for his benefit to do so, the presumption is that he intended to keep the mortgage alive. Id., 1064; Poke v. Reynolds, 31 Md. 106.

2. But notwithstanding there was no merger, and assuming for the present that there was an agreement that the surplus derived from the sale of the property was to go to Mrs. Slingluff, which we will consider later, was the effect of the foreclosure proceedings such as the defendant contends for? It cannot be doubted that the doctrine of res adjudicata applies to a mortgage foreclosure proceeding, such as this, as it does to other judicial proceedings, and of course the proceedings taken in reference to the foreclosure of the mortgage cannot be attacked collaterally. Again we must differ from the position taken by the counsel for the plaintiff that, inasmuch as Mrs. Slingluff had no title at the time of the foreclosure, the sale passed no title. The statute expressly provides that "all such sales, when confirmed by the court and the purchase money is paid, shall pass all the title which the mortgagor had in the said mortgaged premises at the time of the recording of the mortgage." Section 11, art. 66, Code Pub. Gen. Laws 1904. If that were not so, and it only passed the title which the mortgagor had at the time of the foreclosure, the mortgagor could deprive the mortgagee of the security by selling the property. The case of Queen City Bldg. Ass'n v. Price, 53 Md. 397, cited by the plaintiff, involved an altogether different question. There it was held that the supposed power

the subsequent proceedings were void. It | April 4, 1902, $911.51 was paid, for interest. was there said that "the mortgage stood as On October 11, 1902, Mr. Dillehunt wrote a if no power of sale had been inserted in it," letter to Mr. Slingluff, in which he said: "Inbut in this case there is no question about closed please find deed to be executed by the validity of the power of sale; and, if it yourself and wife under the agreement. In could no longer be exercised by reason of the consideration of Mr. Felgner's forbearance deed, the objection should have been made to foreclose the mortgage on Upton you were in the foreclosure case, or if the plaintiff was to give him an absolute deed for the propkept in ignorance of it, by reason of the con- erty, he agreeing on his part to allow you to duct of the mortgagee, a bill of review, or sell the property before March 1st next and some appropriate proceeding in that court, pay him his claim and expenses, you to take was the proper remedy, if it be necessary to any balance left. After March 1st next, he have that sale set aside. will be privileged to sell the property at his own price without any recourse to him by you or your wife or any one else." That deed was not executed for some reason, and was lost, but another one was sent later, which was the one executed February 24, 1903. Mr. Dillehunt was asked whether that deed was drawn in accordance with the letter of October 11th, and replied that it was not. “It was a new agreement, with the same contents in it," "really a renewal of the old agreement, that is what it was." And he admitted on cross-examination that the Slingluffs did not agree on February 24, 1903, that all their rights were to expire on March 1st.

3. But is that necessary under the circumstances of this case? The plaintiff is not contending that title to the property did not pass to Mr. Felgner. On the contrary, she contends that it had already passed by the deed. Mr. Dillehunt thus explains in his testimony why the foreclosure proceedings were taken: "After having gotten that deed I was afraid to record it because of the relationship between the mortgagor and mortgageeI was afraid that somebody would say that they made it under duress, or something of that sort-I was a little fearful of it, and I did not record the deed, and then followed those foreclosure proceedings." He also said he thought at first of having the deed made to him, "so in case there was any trouble, the mortgage then could be foreclosed," but he changed his mind, and thought it looked better to have it made to Mr. Felgner. The object of the foreclosure proceedings is thus clearly shown to have been simply to acquire the title in a way that Mr. Dillehunt thought was free from question, but he does not say that he ever notified either Mr. or Mrs. Slingluff of those proceedings, or of his intention to so proceed, and both of them swore that they were not aware of them. He never told them that he had not placed the deed on record, and Mr. Slingluff testified that when he heard of the sales made by Mr. Felgner, he supposed they were made under the deed. It is difficult to believe that Mr. and Mrs. Slingluff would have executed the deed on February 24, 1903, if they had supposed, or if Mr. Dillehunt had then told them, that he would advertise the property for sale under the mortgage in less than a month, which he did. In Mr. Slingluff's letter of March 1, 1902, he appealed to Mr. Dillehunt not to advertise the property as he was then thinking of doing. He said that they would "be mortified and humbled in the eyes of the community, and all our effort set at naught, and my business injured by having the place advertised for sale at foreclosure proceedings." He offered to make a deed which Mr. Dillehunt was to hold until April 1st, and if they in the meantime paid the interest due, he was to return the deed, and if the interest was not paid by that time, Mr. Dillehunt was to put the deed on record, and they were to give quiet and peaceful possession of the

It, therefore, appears from Mr. Dillehunt's own testimony, and the letters, that the object in making the deed was to avoid a foreclosure, and that the foreclosure proceedings were taken in order that the title might be perfected, which Mr. Dillehunt thought doubtful under the deed alone, and not for the purpose of getting rid of whatever rights Mrs. Slingluff had acquired under the agreement. Indeed no other conclusion could be reached without implying that Mr. Dillehunt was guilty of fraud, for he does not pretend that he informed Mr. and Mrs. Slingluff that he would not make use of the deed, or that he had not recorded it. The sale was made under proceedings which had been begun on October 31, 1902-nearly four months before the deed of February 24, 1903-—and must have been advertised in about three weeks after the deed was made, as the report shows it was advertised for more than 20 days before the day of sale, which was April 8, 1903. It cannot be pretended that there is anything in the record to suggest, much less prove, any agreement or arrangement between February 24th and the advertisement or sale of the property, by which such rights as Mrs. Slingluff had in the surplus, by virtue of the agreement, were surrendered, or were intended to be surrendered, and it is difficult to imagine a more effectual way of misleading the Slingluffs than was adopted, if such effect must be given the foreclosure proceedings as is now claimed for them. In justice to Mr. Dillehunt we must say that his testimony shows that no such effect was intended, but the sale was made, according to him, to perfect what he deemed would be

Equity Pleading, § 783a: "But a former adjudication, even in a court of equity, will not be a bar to a subsequent bill, unless the case made by the latter and the equity are substantially the same. It is said the grounds

so, we must hold that the title acquired by | have been without service on her, and then Mr. Felgner under the foreclosure sale was a court of equity would not have passed a not intended to, and did not, destroy the personal decree against her, if she had esequity, if any, which Mrs. Slingluff acquired tablished the claim she now makes. It would under the agreement, and which resulted in be a fraud on her which a court of equity the execution of the deed. If the Slingluffs would not assist in, if satisfied that her were not aware of the sale, they could not agreement was such as she now claims. Aftbe expected or required, under the circum-er discussing the subject, it is said in Story's stances, to object to it, and if they did know of it, they could not be supposed to believe or know that it was intended thereby to give any greater effect to it than Mr. Dillehunt admits, namely, to perfect what he thought was a defective title. They certain-of the latter suit must be substantially idenly did not have any reason to believe that such equity as they acquired when or before the deed was given was intended thereby to be destroyed. We cannot therefore hesitate to hold that under the peculiar circumstances of this case the plaintiff is not precluded by the ratification of the sale from obtaining the relief sought in this case.

4. The ratification of the audit at first seemed to present more difficulty, in so far as some of the items involved are concerned. But on further consideration we have no doubt about them. If Mrs. Slingluff had either actual or constructive notice of the | foreclosure proceedings, as may be conceded, it is clear that if she is right in her contention as to the agreement, it could not have been the intention of the parties that after she and her husband had executed and delivered the deed, with the understanding that she should have the surplus, if any, if the property could be sold for more than the claim of Mr. Felgner, she was to be further subjected to large expenses in perfecting the title, especially without any notice to her of the necessity or desirability of proceedings to accomplish that end. She not only did not contest the proceedings, but if she had actually known of them she might very well have concluded that they did not affect her. She was not claiming the equity of redemption which the law gave her as mortgagor. On the contrary she had surrendered it, as she and her husband believed then, and do not deny now. The sale under the power was to pass the interest she had when the mortgage was recorded, and not such as she acquired afterwards from the mortgagee. If she had filed exceptions to the sale, and the court was of the opinion that Mr. Dillehunt's fears were well founded, it might have very properly overruled the exceptions, on the ground that Mrs. Slingluff could not be financially injured by the proceeding, if her contention as to the agreement was right. And after the sale was ratified the assignee of the mortgage might very well have claimed the right to have an audit made, so as to have the accounts between him and the real owner of the mortgage stated. There was no attempt to secure a decree in personam against Mrs. Slingluff for the balance as

tical with those of the former." That being so, as it undoubtedly is, and the equity claimed in this case being substantially different, and by no means identical from that determined by the ex parte proceedings in the circuit court for Baltimore county, we are of opinion that they do not preclude the plaintiff from asserting her claim under this bill.

As it was not raised at the argument, we have not deemed it necessary to discuss the question whether the defense of res adjudicata was properly presented in this case, inasmuch as it was not made in the pleadings, or the further question whether section 36, art. 5, of Code Pub. Gen. Laws 1904, would require us to consider that defense, although not raised below. We would only add that it is not altogether free from doubt, as the evidence which might be used for that defense was perhaps admissible for other purposes, and hence we say it is at least doubtful whether section 36, art. 5, would apply. That such defenses should be raised in equity by the pleadings is the general rule. 9 Ency. of Pl. & Pr. 616, and notes; Phelps on Jurid. Eq. § 63; Barroll's Chy. Pr. 129; Wagoner v. Wagoner, 76 Md. 311, 25 Atl. 338. But we will base our decision on the grounds stated above.

5. We come now to the question whether there was such an agreement as the plaintiff claims. It cannot be doubted that there was at one time. After Mr. Slingluff failed, he and his wife on the one hand, and Mr. Dillehunt, representing Mr. Felgner, on the other hand, were endeavoring to arrange so that Mr. Felgner would not lose as mortgagee, and Mrs. Slingluff would eventually get something out of the property. In their effort to accomplish that, she, together with her husband, became responsible for a mortgage of $30,495, and assigned the policy of insurance which was then supposed to be worth over $7,000. Mr. and Mrs. Slingluff apparently worked earnestly to pay Mr. Felgner the interest, and to save something for themselves. Mr. Dillehunt was evidently anxious, and feared that his father-in-law might not recover the money which he had loaned for him, and was also kindly disposed towards the Slingluffs. The mortgage was dated May 1, 1901, and the first interest was due November 1, 1901, and by that