Warner v. Grayson

These are appeals from a decree of the court of appeals of the District of Columbia, affirming a decree of the supreme court of the District. The bill in the original case was filed by Grayson and others against Wood, Talbott, Duke, and others, for the appointment of a receiver for certain property situated in Washington, known as the Victoria flats; also praying an injunction to restrain the sale of the property by the trustees of the first mortgage; to have an adjudication of the right of an easement alleged to be appurtenant to the property, and for the sale of the Victoria flats and certain property adjacent thereto, for the marshaling of encumbrances, and for general relief. The facts necessary to an adjudication of the case, as we view it, being principally those found in the court of appeals, are as follows: Mrs. Alice S. Hill was the owner of lots 1 and 2 in block 45 of Hill's subdivision, University park, city of Washington. A diagram of these lots is herewith given:

(See opposite page.)

These lots fronted 150 feet (75 feet each) on Fourteenth street, and 190 feet on Welling place (now Douglas street). On January 13, 1897, Mrs. Hill conveyed these lots to Nicholas T. Haller. Haller intended to erect an apartment house, which was subsequently placed thereon, and became known as the Victoria flats. To enable him to build this structure, Haller negotiated a loan of $75,000, and, on January 22, 1897, executed a deed of trust of that date to B. H. Warner and Louis D. Wine, as trustees, hereinafter called the Warner trust, describing in the deed the north 120 feet of the two lots, and running westwardly to the depth of 124 feet, as shown on the plat. At the same time Haller executed a deed of trust to McReynolds and Meriweather, as trustees, hereinafter known as the McReynolds trust, upon the remaining portion of said lots 1 and 2, to [NOTE: MATERIAL SET AT THIS POINT IS NOT DISPLAYABLE (GRAPHIC OR TABULAR MATERIAL)]

secure his notes to the amount of $12,315. There were no improvements on the lots 1 and 2 at the time of making these deeds of trust. Thereafter Haller erected the apartment house on the portions of lots 1 and 2 described in the deed of trust to Warner. In the erection of the building Haller had become indebted to mechanics and materialmen in the sum of $30,087.65, and in the further sum of $10,350 for borrowed money. To avoid mechanics' liens on the property, and to secure the borrowed money, a second deed of trust was placed on the property by the same description contained in the Warner deed, Grayson and Heald being the trustees named therein, hereinafter known as the Grayson trust, and bears date December 20, 1897. These deeds of trust were duly recorded. When the Grayson trust was executed and delivered, the building had been erected by Haller, the mortgagor. The building contained, upon the south and west sides, in connection with which an easement is said to arise, a large number of doors, windows, and porches, the porches encroaching over the line of the property deeded in the McReynolds trust 4 feet and 9 inches; and it is averred in the bill, and not denied in the answers, that the areaways encroach 5 feet. There are thirty-six windows in the west wall, nineteen in the south wall, twenty-two doors in the west wall, five doors in the south wall, four cellar windows each in the west and south walls. It was stipulated in the case when it went back for final decree in the supreme court as follows:

'The areaways on the west, and south sides mentioned by the witness, William J. McClure, consist of excavations from the surface of the ground downwards, projecting into the cement walk, and protected by wooden platforms, on grade with and forming part of the said walk, and provided with interstices or openings admitting light to the windows below.

'On the south side of the building there is one doorway or entrance, and on the west side, four doorways or entrances opening out upon the said cement walk, and not otherwise accessible from the exterior of said building.

'On the said west wall, projecting out upon the said cement walk, there are three garbage chutes for collection of garbage from the building, and two openings into the cellar, through which the coal supply of the building is received, the said garbage chutes and coal cellars being accessible from the exterior only by means of the said cement walk.'

In both deeds of trust, in addition to the conveyance of the parcels of ground described, there is the following language:

'Together with all and singular the improvements, ways, easements, rights, privileges, and appurtenances to the same belonging, or in any wise appertaining, and all the estate, right, title, interest, and claim, either at law or in equity, or otherwise, however, of the parties of the first part, of, in, to, or out of the said land and premises, to have and to hold the said land, premises, and appurtenances unto and to the only use of the parties of the second part, the survivor of them, his heirs and assigns.'

A default having been made in the payment of interest due upon the notes secured by the deeds of trust, it was arranged that Warner and Wine were to collect the rents from the building, and afterwards Woods collected the rents of the building for a while. There is considerable testimony in the record tending to show an alleged combination on the part of Wood and Talbot, who had acquired the interest of Haller, to scale down the second, or Grayson and Heald, trust, and to prevent the property being sold advantageously, all of which we deem unnecessary to consider in determining the rights of the parties, and shall not undertake to state the details concerning the same. It appears that Haller originally intended to place the building so as to leave ample space on the west and south, between the building and the lines of the lot as covered by the trust deeds, but being notified that a space of 40 feet must be left on the east of the property and 20 feet on the north side, because of restrictions in the title of the property, the building was placed practically on the lines of the premises on the west and south, as described in the deeds of trust. The porches and areaways thus necessarily encroached on the adjoining property, as hereinbefore stated. In the view we take of the case, it is important to state how Wood and Talbot acquired their interest in the property. In March, 1898, Wood obtained from Haller, in exchange for an equity of Wood's in another property, an undivided one-half interest in the flats property, and Haller conveyed the premises as described in the deed of trust to Warner, together with a 10-foot strip of ground on the south and west sides of the building (see plat), the deed being made for the same by Haller to one Duke, who executed a declaration (dated April 9, 1898) that he held the property in trust for Haller and Wood, one half each. About the same time an arrangement was undertaken to be made by Haller, with the knowledge of Wood, by the terms of which, upon the payment of $4,000 upon the McReynold's trust, the 10-foot strip would be released therefrom, and $4,000 was borrowed from a bank upon the security of $4,000 of the McReynold's notes, which loan, not having been paid, the release has not been obtained. On the first of April, 1899, Talbot purchased Haller's remaining one-half interest in the Victoria flats property, and also one half interest in that covered by the McReynold's trust, and Wood purchased Haller's remaining one-half interest in the McReynold's equity. The purchase price paid by Talbot was $3,100, and by Wood, for the remaining one-half interest in the McReynold's equity, $250. Thus Wood and Talbot became the owners of the equities of redemption in both lots.

The supreme court gave the Warner trust a lien upon the 10-foot strip as part of the mortgage premises, a second lien to the Grayson trust, and ordered the property sold as an entirety, at the option of the trustees appointed to sell.

When the case was in the court of appeals, upon appeal from the original decree of sale, that court modified the decree below in so far as it gave the Warner trust any lien upon the 10-foot strip on the south and west sides, and ordered a decree in favor of the Grayson trust upon this strip as an easement, and that the property be sold as an entirety or in parts, according to the discretion of the trustees ordered to sell. 22 App. D. C. 432. When the case went back to the supreme court the modified decree of sale was entered, from which an appeal was taken to the court of appeals, which affirmed the decree of the supreme court (24 App. D. C. 55), and these appeals were sued out to this court.

Messrs. B. W. Parker and R. Golden Donaldson for Warner and Wine, trustees.

[Argument of Counsel from pages 262-264 intentionally omitted]

Messrs. John Ridont and Charles F. Carusi for Wood and talbott.

Mr. J. J. Darlington for Grayson, trustee.

Statement by Mr. Justice Day:

[Argument of Counsel from pages 265-267 intentionally omitted]

Mr. Justice Day, after making the foregoing statement, delivered the opinion of the court: