Beatty v. McClellan

• Decision Date: 15 February 1951
• Docket Number: No. 18033,18033
• Citation: 96 N.E.2d 675,121 Ind.App. 242
• Parties: BEATTY et al. v. McCLELLAN.
• Court: Indiana Appellate Court

Page 675

96 N.E.2d 675

121 Ind.App. 242

BEATTY et al. v. McCLELLAN.

No. 18033.

Appellate Court of Indiana, in Banc.

Feb. 15, 1951.

Clinton H. Givan, Sol H. Esarey, Indianapolis, for appellant.

Alan W. Boyd, George Zazas, Indianapolis, (Leonidas A. Guthrie, Muncie, Roscoe D. Wheat, Portland, and Barnes, Hickam, Pantzer & Boyd, Indianapolis, of counsel), for appellee.

WILTROUT, Chief Justice.

Appellee filed this action in ejectment and to quiet title. Appellants denied the allegations of the complaint, and asserted that appellant William G. Beatty is the fee simple owner of the real estate, and that appellee has no right, title or interest therein. They also filed an answer of res judicata, based upon the case of McClellan v. Beatty, 1944, 115 Ind.App. 173, 53 N.E.2d 1013, 55 N.E.2d. 327. Appellant Beatty also filed a cross complaint to quiet title, alleging that he is the equitable owner of said real estate, and that appellee has no right, title or interest therein.

Trial by jury resulted in a verdict and judgment for appellee on his complaint and against appellant Beatty on his cross complaint.

The only questions with which we are confronted by the appellants' brief may be stated thus: (1) are the issues in this case res judicata; (2) was it error to admit the appellee's Exhibit 3 in evidence; (3) was it error to admit appellee's Exhibit 10 in evidence; (4) did the court err in permitting the clerk of the Jay Circuit Court to read in evidence the judgment docket of said court pertaining to the case of McClellan v. Tobin, later appealed to the Supreme Court and appearing in its reports as Tobin v. McClellan 1947, 225 Ind. 335, 73 N.E.2d 679, 75 N.E.2d 149; (5) did the court err in refusing to give appellants' tendered instruction No. 6? These question will be discussed in the order of their statement.

The appellants present the question of res judicata in a number of ways. They say that the verdict of the jury herein is not sustained by sufficient evidence and is contrary to law because the evidence conclusively shows that the issues in this case, both on the complaint and the cross complaint, were adjudicated adversely to the appellee in McClellan v. Beatty, supra. They further contend that the court erred in giving its instructions Nos. 2 and 10 and in refusing to give their tendered instructions Nos. 1, 2, 3, 4, 8 and 9. All of these instructions of appellants and their objections to the court's instruction Nos. 2 and 10 relate to the doctrine of res judicata and the propriety of the court's action depends entirely on the applicability of said doctrine to the facts of this case.

The opinion in McClellan v. Beatty, supra, which was received in evidence, states the material facts which occurred prior to the commencement of that action. It discloses what the issues were and upon what evidence they were decided. In the present case substantially the same evidence was also introduced. We follow the wording of that opinion in setting forth those facts, substituting only the names of the parties for the designations 'appellant' and 'appellee.'

'The evidence discloses that on July 15, 1935, the Merchants National Bank of Muncie, then owner, executed with one Rose Tobin a written contract for the sale, on a monthly basis, of a two-story and basement building in the City of Muncie. Later the bank furnished funds for extensive alterations to suit a new tenant for the ground floor of the building and to cover this item the first contract was superceded by another, which being insufficient for the purpose, was itself superceded by another dated January 20, 1938, and calling for the payment of a purchase price of $7500. On October 19, 1938, Rose Tobin assigned all her 'right, title and interest' in the contract to (McClellan), he paying her $1,467.33 therefor and taking it subject to the unpaid balance. On November 12, 1938, the bank, upon receiving the full balance from (McClellan), deeded the real estate to him and he filed this action the same day.

'Beatty, as Receiver, had been in possession of the building prior to the execution of the first contract in July 1935, but came into possession of it personally at that time. At and prior to the execution of the first contract he agreed verbally with Mrs. Tobin that she was to make the down payment and keep up the monthly payments, and he was to pay taxes and keep up the building. It was agreed that he would reimburse her for her outlays as soon as he was able to do so, and thereupon receive from her the title to the building, and he is indebted to her for the amounts which she advanced. The contracts with the bank were executed in her name without fraudulent intent, and for the sole purpose of securing her against loss and she had no actual interest in the building except to protect her advancements. Prior to the assignment of the contract Beatty had advanced about $3500 for repairs, taxes, upkeep and insurance, and Mrs. Tobin had made the down payment of $1500, and had invested about $1000 additional in the project. Since the execution of the first contract and until the execution of the assignment Mrs. Tobin had, and much of the time occupied, an apartment on the second floor of the building. Under his agreement with Mrs. Tobin, Beatty has at all times occupied the basement portion of the building without any obligation to pay rent therefor. The contract conferred upon the buyer the right to the possession of the property pending default.

'When (McClellan) took the deed he had actual knowledge of the occupancy of the basement by Beatty and before the assignment was executed Mrs. Tobin told him that Beatty had improved the property, had 'done everything there that has been done,' and should be considered in the transaction, but (McClellan) told her to 'forget it.' Beatty neither knew of nor acquiesced in the transactions between Mrs. Tobin and (McClellan), or in the execution of the deed by the bank * * *. The evidence discloses that it was agreed before the purchase that the moneys advanced by Mrs. Tobin would constitute a loan from her to Beatty, she to take title as security for its repayment, and he becoming indebted to her for the amounts advanced and to be advanced, and obligated to her for their repayment.'

This court held that under these facts the equitable title to the real estate under the contract for the sale of the land to Mrs. Tobin vested in Mrs. Tobin as trustee. It was also stated, 'Under the circumstances of this case, the money advanced by Mrs. Tobin, though paid directly to the vendor, must be considered the money of Beatty, and a trust resulted in his favor' and that, 'One who takes property with notice of a resulting trust takes subject to it.'

It is noted that in the above case McClellan filed the action the same day the real estate was deeded to him by the bank. This court concluded that it was incumbent upon McClellan 'to prove his right to the immediate possession of the real estate, and he having failed to do so the judgment of the court below must be affirmed.'

The case of McClellan v. Beatty, supra, was instituted in 1938, and judgment rendered in the court below in 1939. The present action was commenced in 1941, and the evidence differs from that in the earlier case in that in this case it is now shown that Beatty has continued to occupy part of the building and that he has never paid or offered to pay McClellan.

Appellants say that the title to the real estate was in issue in the first action in ejectment; that under the statutes, § 3-1301 et seq., Burns', the plaintiff in an ejectment action must allege and prove his interest in the real estate; that McClellan alleged that he was the fee simple owner of said real estate and entitled to the possession thereof; that the finding was a general one against him; that the judgment was rendered on the merits; and that its effect was to constitute an adjudication that McClellan had no right, title or interest in said property.

In Town of Flora v. Indiana Service Corp., 1944, 222 Ind. 253, 53 N.E.2d 161, 163, the Supreme Court said:

'There are two well defined branches of the rule of res judicata. The subject has often been confused by the loose use of descriptive terms. One branch of the subject deals with prior adjudication as a bar. Under it a cause of action finally determined between the parties on the merits by a court of competent jurisdiction, cannot again be litigated by new proceedings before the same or any other tribunal, except by way of review according to law. Such a judgment or decree so rendered is a complete bar to any subsequent action on the same claim or cause of action, between the same parties, or those in privity with them. Every question which was within the issues, and which, under the issues, might have been proved, will be presumed to have been proved and adjudicated. Jordan v. Sisson, 1924, 82 Ind.App. 128, 141 N.E. 881. This rule is perhaps best described as 'estoppel by judgment.'

'The other branch of the subject applies where the causes of action are not the same, but where some fact or question has been determined and adjudicated in the former suit, and the same fact or question is again put in issue in a subsequent suit between the same parties. In such cases the former adjudication of the fact or question, if properly presented and relied on, will be held conclusive on the parties in the latter suit, regardless of the identity of the causes of action, or the lack of it, in the two suits. When the second action between the same parties is on a different cause of action, claim, or demand, it is well settled that the judgment in the first suit operates as an estoppel only as to the point or question actually litigated and determined, and not as to other matters which might have been litigated and determined. In such cases the inquiry must always be as to the point or question actually litigated and determined in the original action....