Claypool v. German Fire Insurance Co.
| Decision Date | 09 March 1904 |
| Docket Number | 4,483 |
| Parties | CLAYPOOL v. GERMAN FIRE INSURANCE COMPANY |
| Court | Indiana Appellate Court |
From Superior Court of Marion County (56,821); J. L. McMaster Judge.
Suit by the German Fire Insurance Company of Indiana against John P Leyendecker and Edward F. Claypool. From a judgment in favor of plaintiff, defendant Claypool appeals.
Reversed.
J. W Claypool, D. W. Howe and R. T. Byers, for appellant.
J. E. Florea, Adolph Seidensticker, George Seidensticker, J. R. Wilson and M. M. Townley, for appellee.
Action by appellee to foreclose a mortgage on a lot in Indianapolis, executed to it by John P. Leyendecker. Appellant Claypool was made a defendant, and filed a cross-complaint to foreclose a mortgage upon the same lot, executed to him by said Leyendecker. He set up that his mortgage was given to secure unpaid purchase money, and that its lien was prior to the lien of appellee's mortgage, but that such priority had been waived by him, but only upon condition; that the conditions of such waiver had been broken, and it had thereby become null and void, wherefore he prayed foreclosure, and a decree of priority in his favor. A special finding of fact was requested and made, and conclusions of law stated thereon. The controversy relates solely to priority between the two mortgages.
The facts found, so far as necessary to a determination of the issue stated, are as follows: Prior to July 12, 1897, appellant Claypool was the owner of lot 200 in Morton Place in Indianapolis, it being the lot described by said mortgages. On that day he conveyed it to Leyendecker, by warranty deed, in consideration of $ 1,600, $ 450 of which was paid in cash, and promissory notes secured by the mortgage referred to in the complaint were given for the residue. This mortgage was recorded within forty-five days after its execution, and said notes were, when the suit was begun, all due and unpaid. There was an understanding at the time of the transaction, between the parties thereto, that if the mortgagor should desire to build on the lot, the mortgagee would waive the priority of his mortgage in favor of a second mortgage executed by Leyendecker to one who would lend him money with which to build. Pursuant to this agreement, Claypool did on October 27, 1897, execute a written waiver to appellee, which instrument was of the following tenor: This instrument was duly acknowledged, and was duly recorded two days after its execution.
Leyendecker had previously made an agreement with appellee by which it was to loan him $ 3,000, to be secured by a mortgage on said lot; the loan not to be made until Claypool should execute a waiver of his prior mortgage. After the execution of such waiver, as aforesaid, appellee did loan him $ 3,000. A house was in process of construction on the lot at the time. Its actual cost was $ 4,374.81. It is worth not less than $ 4,000. Mechanics' liens for $ 626.74 were filed against it. Taxes became delinquent to the amount of $ 315.07. After the commencement of this action, appellee paid $ 339.08 of said liens, taking assignments thereof, such payment being authorized by its mortgage. From the date of its loan to the completion of the house appellee advanced $ 2,811.07 which was all expended in the erection of said house, $ 188.93 being retained for the following purposes: Commission on loan, $ 150. Insurance on building, $ 24. Expense incident to loan, $ 14.93. The commission on loan retained by appellee was distributed among the members of its finance committee. The $ 24 was paid as a premium for a policy of insurance. The $ 14.93 was paid for an abstract, an examination of it, etc. These sums were deducted with the consent of Leyendecker, but without notice to Claypool.
On April 27, 1898, the coupon interest note payable to appellee became due, and was not paid, and by reason of such default the entire debt to it became due. It served notice upon Claypool, and was notified by him to foreclose its mortgage; he, however, denying its priority. There is due appellee the principal sum, interest, and attorneys' fees, $ 5,078.15, including delinquent taxes and assessments paid, and the amounts due for labor and material, and secured by lien, as aforesaid. Exclusive of the two latter amounts there is due to it $ 4,367. The amount due on the mortgage to Claypool is $ 1,628.76.
The conclusions of law subordinated Claypool's mortgage to the lien of appellee's mortgage, and the amounts paid by it for the protection of its security. The correctness of the conclusions depends upon the terms and...
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