Mrs. Susan L. Wallach, the wife of Charles L. Wallach, and Mrs. Catharine Burche, the wife of Raymond W. Burche, sisters and owners, as tenants in common, of land and buildings on the north-west corner of Sixth street west and D street north, in the city of Washington, joined with their husbands on January 15, 1872, in the execution to Joseph C. G. Kennedy of a deed of trust of that property to secure the payment to Mrs. Rebecca R. Mellen of a joint and several promissory note for $5,000, made by the grantors, payable at the end of five years from that date, with interest, at the rate of 10 per cent. per annum, payable in quarterly installments. The deed provided that the trustee might, on default, sell the property at public sale to the highest bidder, on such terms and conditions as he might deem most for the interest of all parties concerned in the sale, first giving at least 10 days' notice of the time, place, and terms of sale, by published advertisement. The deed provided that the proceeds of the sale, after paying its expenses, and other expenses of the trust, and a commission to the trustee, should be used to pay the debt, interest, costs, and expenses, whether due and unpaid, or unpaid though not due, and the surplus to the grantors. There was also a provision that the expense of insurance, as well as of any taxes the payment whereof might become necessary, should thereupon become a debt due and owing by the grantors, the payment of which should be secured by the deed.
There being default in the payment of interest, the trustee published a notice that he would sell the property at public auction, on December 8, 1873, on the following terms: $5,000, with interest thereon at the rate of 10 per cent. per annum, from January 15, 1873, 'together with the expenses of sale, in cash, and the balance at one and two years, for which the purchaser is to give his notes, bearing interest at the rate of 8 per cent. per annum, and secured by deed of trust on the property sold.' The property was sold for $16,509.66. The purchaser was Mrs. Burche. The charges against the purchase money were stated by the trustee to be $7,692.45, made up of $5,093.74 for note and interest, and $2,598.71 for taxes, trustee's fee, auctioneer's commission, and advertising. This left a net balance of $8,817.21, of which one-half, or $4,408.60, was stated to belong to Mrs. Wallach, and to be the sum to be secured for her benefit under the deed of trust to be given on the property sold, according to the published terms of sale. Mr. Kennedy, as trustee, and Mrs. Mellen, on December 15, 1873, made a deed to Mrs. Burche, conveying the property to her. This deed was acknowledged by the trustee on December 24, 1873. On that day Mrs. Burche executed to Mrs. Mellen a deed of trust of the same property, to secure the payment of a promissory note bearing that date, made by Mrs. Burche, for $8,200, payable to the order of Mrs. Elizabeth Hain, five years after date, with interest at the rate of 10 per cent. per annum, payable quarterly. This deed was acknowledged and recorded on that day, so as to make it a first lien on the property. On the same day Mrs. Burche executed two promissory notes, payable to the order of Mr. Kennedy, each for $2,204.30, payable one in one year and the other in two years after date, with interest at the rate of 8 per cent. per annum, and, to secure them, executed to Anthony Hyde and Albert F. Fox a deed of trust on the same property. This deed was acknowledged December 31, 1873, and recorded January 7, 1874. Of course, it was only a second lien on the property. Mrs. Mellen, Mrs. Burche, and the trustee intended that these notes to Mr. Kennedy and this second deed of trust should be the provision for the $4,408.60 for Mrs. Wallach.