Beard v. Payne
| Decision Date | 20 April 1917 |
| Docket Number | 9,236 |
| Citation | 115 N.E. 782,64 Ind.App. 324 |
| Parties | BEARD ET AL. v. PAYNE |
| Court | Indiana Appellate Court |
From Madison Circuit Court; Luther F. Pence, Judge.
Action by Charles F. Payne against Clarence H. Beard and others. From a judgment for plaintiff, the defendants appeal.
Affirmed.
Albert D. Ogborn, Clarence M. Brown and Robert S. Hunter, for appellants.
H. G Yergin, W. O. Barnard and W. E. Jeffrey, for appellee.
Appellee filed his complaint in the court below against appellants on a promissory note and to enforce a vendor's lien. So much of such complaint as is necessary for the determination of the questions raised with reference thereto is substantially as follows: That on January 31 1912, appellee Edward Payne and Lafe Bell sold and conveyed to the appellant, Clarence H. Beard, by their warranty deed of that date, certain real estate in Henry county, Indiana, (describing it) for the sum of $ 4,000; that said Beard thereupon executed to said grantors his promissory note for said sum; that a lien for said purchase money on said real estate was declared, expressed and confirmed in said deed, which deed was duly recorded in the recorder's office of said county; that said grantors, for a valuable consideration, sold and assigned said promissory note to the Citizens State Bank of Newcastle, Indiana, by endorsement in writing on the back thereof, and delivered the same to it; that sometime after said note had been sold, assigned and delivered to said bank the said appellant Beard failing and refusing to pay the balance due thereon, on demand, said bank required and compelled the appellee as an endorser thereon to pay and take up said note, which he did in 1913, and that by so doing he became the owner and holder of said note and the debt evidenced thereby, and the owner and holder of said lien given to secure its payment; that since the conveyance of said real estate by said grantors to the appellant Beard, the said Beard sold and conveyed the same to the appellant Olna H. Bradway; that said Bradway took and accepted the said deed of conveyance with full notice and knowledge that said purchase money as aforesaid was unpaid, and that the lien therefor on said real estate was unsatisfied; that by reason of the premises, there is due and owing appellee the sum of $ 3,500, which sum is a lien on said real estate. The demand is for judgment in the sum of $ 3,500; that the same be declared a lien on said real estate, and an order entered for the sale of the same in satisfaction thereof.
To this complaint appellant Olna H. Bradway filed his demurrer for want of facts, and based the same on the following memorandum filed therewith: This demurrer was overruled and an exception reserved.
Appellant Olna H. Bradway has assigned this ruling of the court as error. Under the statute we are only required to consider the objection to the complaint, stated in such memorandum as all other objections are deemed waived. § 344, cl. 6, Burns 1914, Acts 1911 p. 415; Pittsburgh, etc., R. Co. v. Farmers Trust, etc., Co. (1915), 183 Ind. 287, 108 N.E. 108; Spiro v. Robertson (1914), 57 Ind.App. 229, 106 N.E. 726; Gifford v. Gifford (1914), 58 Ind.App. 665, 107 N.E. 308.
It will be observed that the complaint not only alleges that the note was given for the purchase money of the real estate, but it expressly avers that it was declared to be a lien thereon, in the deed executed therefor. Such allegations were sufficient to show the existence of a vendor's lien. It is further alleged that such note was sold and assigned to the Citizens State Bank of Newcastle, by endorsement in writing on the back thereof.
Inasmuch as such lien was an incident to the note, and nothing appears to show that it had been released or otherwise discharged, such assignment of the note carried the lien with it to the assignee, without a special assignment thereof. Kern v. Hazlerigg (1858), 11 Ind. 443, 71 Am. Dec. 360; Perry v. Roberts (1868), 30 Ind. 244, 95 Am. Dec. 689; Felton v. Smith (1882), 84 Ind. 485; Upland Land Co. v. Ginn (1896), 144 Ind. 434, 43 N.E. 443, 55 Am. St. 181; Smith v. Mills (1896), 145 Ind. 334, 43 N.E. 564, 44 N.E. 362.
It is further alleged that, subsequent to the assignment of the note to said bank, it compelled appellee as an endorser thereon, to pay and take up the note, and that he thereby became the owner thereof. There is nothing to show that the lien had been released or discharged prior to the time appellee became the owner of the note in the manner alleged; and hence it would still follow the note as an incident thereto into the hands of appellee. The fact that appellee alleges that he was compelled to pay and take up the note as an endorser thereon in no way affects the lien incident thereto. If he became the owner thereof, he was entitled to the lien securing the same, regardless of the fact that he was an endorser thereon, and took the same from the bank to protect himself as such. He was not required to rely on the principle of subrogation, in order to assert such lien, as suggested in the memorandum, as the mere fact that he became the owner of the note entitled him to the security incident thereto. It is alleged that the appellant Olna H. Bradway purchased the real estate with full notice and knowledge that said purchase money was unpaid. Under such circumstances the real estate would be bound by the lien in the hands of said appellant, as such purchaser. Bryson v. Collmer (1904), 33 Ind.App. 494, 71 N.E. 229; Borror v. Carrier (1904), 34 Ind.App. 353, 73 N.E. 123. The court therefore did not err in overruling the demurrer of appellant Bradway to the complaint. Issues were joined on the complaint and a trial had. The court, on request of appellants, made a special finding of facts, and stated its conclusions of law thereon. Judgment was rendered in favor of appellee for the sum of $ 3,394.50 and costs. The lien was foreclosed, and the real estate ordered sold in satisfaction of the judgment.
The only remaining error assigned is the action of the court in overruling appellant's motion for a new trial. This motion is based on four grounds, the third and fourth of which challenge the sufficiency of the evidence to sustain special finding No. 26. These alleged grounds raise no question, as they are not proper assignments in a motion for a new trial. Scott v. Collier (1906), 166 Ind. 644, 78 N.E. 184; Hamrick v. Hoover (1907), 41 Ind.App. 411, 84 N.E. 28. The remaining grounds for a new trial are that the decision of the court is not sustained by sufficient evidence, and is contrary to law. The word "decision," when so used in this case, refers to the special finding of facts. Weaver v. Apple (1896), 147 Ind. 304, 46 N.E. 642; Parkison v. Thompson (1904), 164 Ind. 609, 73 N.E. 109, 3 Ann. Cas. 677. It therefore follows that only the special findings are challenged by the motion for a new trial.
Appellants contend that the evidence shows that the Citizens State Bank accepted three notes secured by mortgages amounting to $ 7,800, as collateral security for any debts that appellant Beard might be owing said bank; that at such time the said bank was the owner of the note in suit as assignee, and the act of accepting such collateral security waived the vendor's lien in question. They seek to apply the rule that the acceptance of security for the purchase money of real estate waives the implied lien of the vendor on such real estate therefor. The deed for the real estate in question was introduced in evidence and is made a part of the special finding of facts. It contains the following clause after the description and identification of the real estate: "Subject to a purchase money lien note of $ 4,000.00 to Lafe Bell, Ed Payne, and Charles F. Payne, payable at the Citizens State Bank of Newcastle, Indiana, of this date, with six per cent. interest from date, and signed by Clarence H. Beard." A lien thus reserved in a deed of conveyance is a lien by contract and not by implication. It is therefore an expressed and not an implied lien. It has all the essential elements of a mortgage. 3 Pomeroy, Eq. Jurisp. (2d ed.) § 1257; 2 Jones, Liens (3d ed.) §§ 1110, 1111; Dowdy v. Blake (1887), 50 Ark. 205, 6 S.W. 897, 7 Am. St. 88; Ober v. Gallagher (1876), 93 U.S. 199, 23 L.Ed. 829. In this State such a lien has been held to be in effect an equitable mortgage, or equivalent to a mortgage. Lucas v. Hendrix (1883), 92 Ind. 54; Bever v. Bever (1896), 144 Ind. 157, 41 N.E. 944; Warford v. Hankins (1897), 150 Ind. 489, 50 N.E. 468; Cassell v. Lowry (1904), 164 Ind. 1, 72 N.E. 640.
Such a lien being in effect a mortgage, the question arises as to the manner in which it may be lost or discharged. It has been expressly held in many jurisdictions that the acceptance of security for the purchase money of real estate does not waive an expressed lien therefor. 39 Cyc 1836; 29 Am. and Eng Ency. Law 788; 3 Pomeroy, Eq. Jurisp. (2d ed.) § 1259; 2 Jones, Liens (3d ed.) § 1116; Coles v. Withers (1880), 33 Grat. (Va.) 186; Price v. Lauve (...
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