Carmichael v. Arms

• Decision Date: 19 December 1912
• Docket Number: No. 7,777.,7,777.
• Citation: 100 N.E. 302,51 Ind.App. 689
• Parties: CARMICHAEL, et al. v. ARMS.
• Court: Indiana Appellate Court

51 Ind.App. 689

100 N.E. 302

CARMICHAEL, et al.

v.ARMS.

No. 7,777.

Appellate Court of Indiana, Division No. 1.

Dec. 19, 1912.

Appeal from Circuit Court, Warren County; James T. Saunderson, Judge.

Action by Solon A. Arms, as superintendent of the Levee Company, against William P. Carmichael and others. From a judgment for plaintiff, defendants appeal. Reversed and remanded.Edwin F. McCabe, of Williamsport, for appellants. William B. Durborow, of Williamsport, for appellee.

FELT, J.

This is an action by appellee against appellant, William P. Carmichael, to collect his alleged pro rata share of the expense of repairing a certain levee along the Wabash river and to declare and enforce a lien against his real estate for the amount due. The suit was begun in the Fountain circuit court, and appellant filed a plea in abatement showing that he and his codefendants were all legal residents of Warren county, Ind.; that the cause of action was not connected with any business or transaction or any office or agency of either of the defendants in said Fountain county; and that they had no office or agency in said county. To this plea appellee filed a demurrer for insufficiency of the facts alleged to abate the action. This demurrer was sustained, and appellant duly excepted. Appellant then demurred to the complaint upon the following grounds: (1) The court has no jurisdiction of the person of the defendants. (2) The plaintiff has not legal capacity to sue. (3) Insufficiency of facts alleged. (4) Defect of parties, in this, that William H. Young should be made a party defendant to answer to his interest in the demand sued on. The demurrer to the complaint was overruled and exception taken. The cause was venued to the Warren circuit court, where a special answer was filed by appellant, to which the demurrer of appellee was sustained. Appellant refused to plead further, and the court thereupon rendered judgment against him for $281.47, declared an equitable lien for the amount upon his real estate, and ordered the two-thirds part of the same sold to satisfy the judgment, “and to pay and satisfy the equitable lien of the plaintiff as superintendent, on said real estate.” The rulings upon the several demurrers are assigned as error.

The complaint alleges, in substance, that Solon A. Arms, William H. Young, and Isaac N. Sims, on April 5, 1905, were the separate owners of certain tracts of real estate therein described, situate in Fountain county, Ind.; that said real estate was subject to overflow from the Wabash river, and the said owners had at an expense of $10,000 built a levee along said river and upon said lands to protect the same from such overflow; that upon the completion thereof the aforesaid parties entered into a contract to keep said levee in repair, which in substance provided that such expense should be borne in proportion to the amount of land owned by each, which was as follows: Young, 39 per cent.; Sims, 43 per cent.; and Arms, 18 per cent. The contract then provides as follows: “Whenever any of said parties, their successors or assigns, discover any break or damage done to said levee, that party shall proceed, with all reasonable haste and speed, to cause the same to be repaired. *** It is further agreed that a settlement of the cost and expense of the making of said repairs shall be had within thirty days after the completion thereof, and the money due the person having charge thereof, and his agents and employs, shall become due and payable at the expiration of said thirty days. All parties hereto agree that the terms and provisions of this contract shall be binding upon them and all their heirs, assigns and successors.” It is further averred that said instrument was by agreement of the parties thereto recorded in the miscellaneous records of the recorder's office in Fountain county, Ind.; that on the 21st day of October, 1905, said Sims and wife duly conveyed his said real estate to appellant “with full knowledge of the terms” of said contract.

The plea in abatement raises the question whether the facts stated in the complaint are sufficient to show the existence of a lien upon the real estate of appellant in Fountain county and thereby justify the filing of the suit in that county, notwithstanding the defendants all resided in Warren county. Assuming that the existence of an equitable lien for the proportionate part of the expense of repairing the levee alleged to be due from appellant would be sufficient to justify the filing and maintenance of the suit in Fountain county, we must first determine whether the facts alleged are sufficient to show the existence of such lien.

[1][2][3] In order that a lien may be created by contract, express or implied, it is generally necessary that the language of the contract or the attendant circumstances should clearly indicate an intention of the parties to create a lien upon the specific property. Where the equitable lien depends upon the terms of an executory contract in writing based upon a valuable consideration, the lien may be declared where the intention is clearly indicated to incumber, or appropriate, as security for a debt or other obligation, some particular property or fund therein described, and such lien may be enforced against such property in the hands of the original obligor or his heirs, personal representatives, assigns, or purchasers with notice. 25 Cyc. p. 664 et seq.; 19 A. & E. Enc. Law, p. 12 et seq.; Elmore v. Symmonds, 183 Mass. 321, 67 N. E. 314-317;Knott v. Manufacturing Co., 30 W. Va. 790, at page 795, 5 S. E. 266;Stone et el. v. Harris, 146 Cal. 555-560, 80 Pac. 711;American Pin Co. v. Wright et al., 60 N. J. Eq. 147, 46 Atl. 215-217;Cameron v. Sexton, 110 Ill. App. 361-386;Hamilton v. Downer, 152 Ill. 651, 38 N. E. 733;Meyer v. Quiggle, 140 Cal. 495, 74 Pac. 40;Picquet v. McKay, 2 Blackf. 465-467;Brown v. Budd, 2 Ind. 442-444.

[4][5] The language of the contract seems plain and unambiguous and indicates that the obligation to pay for repairs was personal and against the owners of the several tracts of real estate or those succeeding to such right of ownership. Such contract is to be construed as any other written agreement. The intention of the parties is to be determined from the language employed. Strauss v. Yaeger, 93 N. E. 877-882.

There are no facts or circumstances in the case that call for the application of other rules of construction, or justify resort to other means than the language of the instrument itself to determine the intention of the parties, with respect to the character of the liability therein stipulated.

The court cannot imply the existence of an equitable lien where the parties have entered into an unambiguous contract providing for a personal liability only, and especially in the absence of allegations sufficient to change or modify the application and effect of the contract. Randel v. Brown, 2 How. (43 U. S.) 406-424, 11 L. Ed. 318;Gibson v. Stone, 43 Barb. (N. Y.) 285-291;Knott v. Manufacturing Co., 30 W. Va. 796, 5 S. E. 266; 4 Pomeroy, Eq. Juris. § 1341.

In Knott v. Manufacturing Co., 30 W. Va. on page 795, 5 S. E. on page 268, after referring to the general rule under which an equitable lien may be declared according to the provisions of an express executory agreement in writing, the court said: “Broad as this doctrine is here stated to be, it falls far short of any principle that would create a lien out of the obligation here in question. It shows no intention, either express or implied, on the part of the contracting party to convey, transfer, or assign any property as security. The express and only intent declared is that the company will insure its buildings, machinery, etc., and transfer the policies to the plaintiff ‘as additional security for this obligation.’ The express intention is so definite and exclusive that it leaves no possible ground for implying any other intention or purpose.” And again (30 W. Va. on page 796, 5 S. E. on page 269), it is said: “The covenant not to incumber the property, it seems to me, is clearly one for the breach of which the remedy at law is not only adequate but peculiarly appropriate. The damages, if any, must be the loss of the plaintiff's debt or some part of it, and to fix these damages is the peculiar province of a jury. It may be said that this remedy is inadequate by reason of the insolvency of the company, but the reply to this objection is that courts do not provide the means to pay debts, but only the means of enforcing their payment. Whether the debtor is solvent or insolvent is immaterial. The rules of law are the same in either case.”

The theory of the complaint in this case is clearly that of an equitable lien created by contract. If the intention to give a lien for the cost of repairs to the levee is not apparent front the terms of the instrument, no lien exists.

In Lyster v. Estate of Munck, 54 Mich. 325, 20 N. W. 83, it is said: “Courts cannot create liens. They can only declare and enforce them when they exist, either in law or equity.” Frost v. Atwood, 73 Mich. 67, 41 N. W. 96, 16 Am. St. Rep. 560-563.

The liability fixed by the contract is personal, for its provisions are made binding upon the parties, their heirs, assigns, and successors, and the language employed does not indicate an intention to make the cost of repairs a lien upon the land. 3 Pomeroy, Eq. Juris. §§ 1234, 1235, 1236, 1237; Sewell v. Drake (Ky.) 85 S. W. 748;Society, etc., v. Watson, 68 Fed. 730-738, 15 C. C. A. 632-640.

[6] In Pomeroy's Equity Jurisprudence, vol. 3, 1238, after a discussion of the subject of Equitable...