Bank of Louisville v. Baumiester

• Decision Date: 18 February 1888
• Citation: 7 S.W. 170,87 Ky. 6
• Parties: BANK OF LOUISVILLE et al. v. BAUMIESTER.
• Court: Kentucky Court of Appeals

7 S.W. 170

87 Ky. 6

BANK OF LOUISVILLE et al. v. BAUMIESTER.

Court of Appeals of Kentucky.

February 18, 1888

Appeal from Louisville chancery court.

John Baumiester instituted this action against the Bank of Louisville, George Spalding, Henry G. Spalding, and Mrs Bullitt, to sell certain property, and apply the proceeds to pay a certain indebtedness. From the judgment entered in the case the bank appeals.

Helm &amp Bruce, H. R. Phillips, and Wm. Lindsay, for appellant.

Muir &amp Heyman and Dodd & Grubbs, for appellee.

LEWIS J.

September 14, 1883, by written contract between them, Mrs. V. H Bullitt leased to George Spalding, for the term of five years, for an agreed rent, a lot of land situated in the city of Louisville, which contract contained a provision, the principal subject of controversy, and hereafter mentioned. September 22, 1883, Spalding made a contract with appellee, Baumiester, for the erection upon the lot of a warehouse, for which he was to pay $5,700, in 10 semi-annual installments, appellee, Olds, agreeing to become surety therefor, upon condition Spalding would indemnify him against loss; and October 1, 1883, a mortgage was executed for that purpose, Mrs. Bullitt being party thereto. In that mortgage is the following recital: "Whereas, by lease dated 14th day of September, 1883, Mrs. Bullitt leased to Spalding a tract of ground, (describing it,) said lease giving to said Spalding the option to purchase the leased premises at any time within five years, for the sum of five thousand dollars to be paid cash in hand, to which lease reference is made for greater certainty, the same having been duly lodged for record in the Jefferson county clerk's office." Following the further recital that Olds had become surety in the notes to Baumiester is this clause: Now, in consideration of the premises the said Spalding does hereby sell, assign, and transfer to said Henry G. Olds the said lease, together with all right, title, and interest of said Spalding in and to said lease, and the premises therein described, and any improvement or buildings which may be placed upon said premises, together with the option to purchase said leased premises," etc. On the part of Mrs. Bullitt is the following agreement and reservation: "The said Virginia H. Bullitt unites herein for the sole purpose of signifying her assent to the transfer of the said lease and option. It is distinctly agreed and understood that Spalding does not by reason of this assignment cease to be responsible to the fullest extent to Mrs. Bullitt for the fulfillment of said contract of lease between them. " October 6, 1884, Baumiester having in the mean time erected the warehouse in compliance of his contract, Mrs. Bullitt conveyed the lot to Spalding for the price mentioned; but they so modified the original agreement that instead of the entire purchase money, only $1,000 of it was then paid,--a lien being retained in the deed for the residue, made payable September 14, 1888, the day when the lease would have ended. January 26, 1885, Spalding mortgaged this lot, the warehouse being then on it, to appellant, the Bank of Louisville, to secure certain debts he owed on it; and June 13, 1885, he executed a mortgage to Baumiester on the lot, "with all the rents, issues, and profits thereof," to secure payment of a note of that date for $3,500; and in that mortgage "it was agreed that if said note shall not be paid at its maturity, then said second party may immediately enter upon and take possession of said real estate, and collect the rents and apply the same to the satisfaction of the debt. " This action was instituted June 16, 1886, by Baumiester,--Spalding, Mrs. Bullitt, Olds, and the Bank of Louisville, being defendants; and in his petition he prayed judgment for his debt, and application of proceeds of sale of the lot, and rents accrued and accruing during the pendency of the action, to satisfy it. The defendants, creditors of Spalding, respectively asked judgment for their debts, and enforcement of their liens, and, Spalding having consented that each of the debts against him might be treated as due, personal judgments therefor were rendered, and the priority of liens fixed, and proceeds of the sale directed to be applied in the following order: (1) To Mrs. Bullitt, for the balance of purchase money unpaid; (2) to Baumiester...