Bunch v. Grave

• Decision Date: 22 June 1887
• Docket Number: 12,786
• Citation: 12 N.E. 514,111 Ind. 351
• Parties: Bunch v. Grave et al
• Court: Indiana Supreme Court

12 N.E. 514

111 Ind. 351

Bunch v. Grave et al

No. 12,786

Supreme Court of Indiana

June 22, 1887

From the Randolph Circuit Court.

Judgment is reversed, with costs.

E. L Watson and J. S. Engle, for appellant.

H. C Fox, J. F. Robbins, W. A. Thompson, A. O. Marsh and J. W Thompson, for appellees.

OPINION

Mitchell, J.

In October, 1877, Augustus Bunch was the owner of a tract of land in Randolph county which was encumbered by two mortgages. in the execution of which he and his wife had united. The mortgages were given to secure the husband's debts. There were, at the date above mentioned, several judgments against Bunch, which imposed junior liens upon the land. Grave procured these judgments to be assigned to him, and caused executions to be issued thereon. The land was sold at sheriff's sale, Grave becoming the purchaser. Bunch failed to redeem, and the purchaser received a sheriff's deed. The sale having been made after the act of March 11th, 1875, came in force, Mrs. Bunch, the wife of the judgment debtor, became vested with a fee-simple title to the undivided one-third of the land purchased by Grave, subject to the encumbrance of the prior mortgages. She had the interest thus vested in her set off by proceedings in partition. Grave went into possession of the two-thirds set off to him. Subsequently the prior mortgages were foreclosed, and in the decrees of foreclosure, both of which drew ten per cent. interest, it was adjudged that the land set off to Grave should be first sold to satisfy the mortgage debts, which aggregated $ 1,542.35. The land set off to Grave is alleged to be worth $ 3,000. One of the mortgages was assigned to Grave before it was foreclosed, and the decree was taken in his name. The other was purchased and assigned to him after it was foreclosed, Grave being in possession of the two-thirds set off to him, and assuming to be the owner of the several decrees above mentioned, which he treated as being on foot, declared his purpose to hold them alive until the several decrees and accumulating interest should amount to a sum equal to the value of the whole tract, when he proclaimed his purpose to sell the whole to satisfy the several mortgage decrees.

Through some singular and unaccountable misconception of her rights, Mrs. Bunch then filed a petition in the Randolph Circuit Court, asking that Grave be compelled to proceed and sell the land, according to the terms of the several decrees, claiming that the two-thirds set off to him was more than sufficient in value to satisfy both, and asserting that the purpose of Grave to hold the decrees until the interest should accumulate was inequitable, and injurious to her. The court made an order according to the prayer of the petition. Grave appealed to this court, and the order of the circuit court was affirmed. Grave v. Bunch, 83 Ind. 4. Afterwards Grave issued orders of sale on the foreclosure decrees, which both parties seemed to treat as alive and in force. He caused his own land to be sold, bidding it in himself for one hundred dollars.

The foregoing, with many other immaterial facts, are set forth in a petition by Mrs. Bunch to the Randolph Circuit Court, upon which she again asked the intervention of the court. She prayed that it might be adjudged on the foregoing facts that the land set off to her was discharged from the lien of the several decrees, which Grave assumed to hold, and which he was threatening to enforce against her land, and asked that her title might be quieted. The court below sustained a demurrer to the petition, and the question is, whether, upon the facts above summarized, the appellant is entitled to any relief.

The most serious impediment in the appellant's way is the anomalous proceeding by which she sought to compel the appellee to sell the two-thirds of the land to which he had obtained title under the sheriff's sale, in order to satisfy debts which he claimed to be owing to himself.

It is now insisted that Grave ought to be denied any further remedy on the several mortgage decrees because of his delay in proceeding to sell. It is said that the appellant is without the means to bid in the land; that meanwhile a purchaser, whom she had procured, and who stood ready to purchase the land owned by Grave for the full amount of the decree and costs, has invested his money otherwise, and now declines to purchase, and that hence an injury has resulted to Mrs. Bunch. On the other hand it is asserted, or rather assumed, that Grave occupies the relation of creditor to the land, and that he is not to be prejudiced in the collection of his debt by mere passive delay; that it was the surety's business, it being apparently assumed on all hands that Mrs. Bunch occupies the relation of surety, to pay the debt and then proceed against the property. On both sides, as it will thus be seen, the true relation of the parties to the property, and to each other, is singularly ignored.

Grave, it will be remembered, purchased real estate owned by Bunch, at an execution sale, the land being at the time subject to two prior mortgages. It is well settled that where an equity of redemption is sold on execution, the purchaser takes the land charged with the payment of all prior encumbrances. The land becomes the primary fund for the payment of all encumbrances charged upon it prior to that upon which the sale is made. The amount bid will be presumed to be the price or value of the property, less the encumbrances. In such a case, where the purchaser obtains title to the land and subsequently pays off the pre-existing encumbrances, of which he had notice, he will not be permitted to keep them alive by having them assigned to himself. Having obtained the fund out of which the encumbrances are to be paid, he does nothing more than to discharge his own equitable obligation when he pays them off. Atherton v. Toney, 43 Ind. 211; Shuler v. Hardin, 25 Ind. 386; Hancock v. Fleming, 103 Ind. 533, 3 N.E. 254; Robins v. Swain, 68 Ill. 197; Weiner v. Heintz, 17 Ill. 259; Mines v. Moore, 41 Ill. 273; Johnson v. Zink, 51 N.Y. 333; Russell v. Allen, 10 Paige 249; Cleveland v. Southard, 25 Wis. 479; Jones Mort., section 736.

One who purchases property at an execution sale, is in the same position in respect to previous encumbrances as one who takes a quitclaim deed, or one who takes a deed expressly subject to...