Opinion ID: 1503815
Heading Depth: 1
Heading Rank: 2

Heading: Mortgagee as a General Creditor.

Text: There was no excuse for the mortgagee not filing with the clerk of court a statement of his claim, properly authenticated, showing the balance due him under the chattel mortgage, which was required of all creditors by the preceding notice to creditors. But, under the circumstances in this case, there was no reason why the auditor should not have allowed the mortgagee, as a general creditor, his pro rata share of the amount due him under his mortgage from the net proceeds of the sale of the merchandise. See Rogers, Brown & Co. v. Citizens' National Bank, infra. The auditor must have known that the mortgagee had filed his mortgage and an affidavit of default with the bill of complaint when this proceeding was originally instituted. He also knew, or could easily have ascertained, that the net proceeds from the sale of the fixtures would not pay in full the debt due the mortgagee. The law contemplates that all claims having any probable validity, or which may ultimately be sustained by proof, shall be stated as of course. Dorsey v. Hammond, 1 Bland Ch. 463, 470 (1828); Williamson v. Wilson, 1 Bland Ch. 418, 440-1 (1827). See also Miller, Equity Procedure, § 543. As a general rule the auditor should notice all claims which have been filed. Winn v. Albert, 2 Md. Ch. 169, 177-8 (1851). In Hignutt v. Garey, 62 Md. 190, 192-3 (1884), the lack of the usual proof was obviated by peculiar circumstances. See also Davis v. Gemmell, 73 Md. 530, 546-7, 21 A. 712 (1891), in which claims were rejected for lack of proof. Furthermore, the auditor had authority to take, and there was no reason why he should not have taken, proof of the claim of the mortgagee and of the amount thereof if the auditor deemed it necessary or was uncertain as to the exact amount of the claim. In fact, since the mortgagee's claim was filed with the bill, and on its face appeared to be just and fair, the auditor could have allowed the claim, if he knew or could have ascertained the amount thereof, regardless of whether it had been authenticated or not, and then suspended the payment thereof, and reported that fact in his report to the court. By so doing the auditor would have put the mortgagee on notice of the defect in proof, and afforded him an opportunity to supply whatever might be necessary before the audit was ready for final ratification. See footnote 2 to Miller, op. cit. supra, § 543.