Daugherty v. Wheeler
| Citation | 25 N.E. 542,125 Ind. 421 |
| Decision Date | 16 October 1890 |
| Docket Number | 14,390 |
| Parties | Daugherty et al. v. Wheeler |
| Court | Supreme Court of Indiana |
From the Fulton Circuit Court.
G. W Holman, R. C. Stephenson, M. R. Smith and E. Myers, for appellants.
J. S Slick and S. Keith, for appellee.
The only question involved in this appeal is whether or not the right of action is barred by the six years' statute of limitations.
The facts are, that prior to the 12th day of September, 1877 Sydney Keith had become bound as surety for Ephraim Daugherty, the debt had fallen due, and a judgment had been recovered against both principal and surety in the Fulton Circuit Court. Daugherty's land had previously been sold for delinquent taxes, and some of it had been sold on execution, the time for redemption not yet having expired and in order to save himself, Keith, with the knowledge and consent of Daugherty, had paid off some other liens on the land. Daugherty had nothing available for the payment of his debts except the land described in the complaint, which was of the alleged value of thirty-five hundred dollars, and was owned by himself and wife as tenants by the entireties. On the date above mentioned Daugherty and wife conveyed the land to Keith by a warranty deed, absolute on its face, but contemporaneously with the execution of the deed it was orally agreed by Keith that the grantors should remain in possession and enjoy the rents and profits of the farm, that he should pay the debt for which he was jointly bound with Daugherty as surety, and any other debts or claims constituting encumbrances on the land, and keep the farm free from encumbrances. It was a part of the agreement that Daugherty should have a reasonable time within which to repay Keith for the moneys thus paid, and to be paid, and if the former within a reasonable time reimbursed the latter for the money paid, with interest and expenses, the land was to be reconveyed. In case Keith was not repaid within a reasonable time, he was to sell the land, provided it could be sold for a sum in excess of the amount due him, and account to the grantors for the balance. Under this arrangement Keith paid out about $ 2,600, exclusive of interest, on Daugherty's debts. The sums paid by Keith were never repaid, nor was the latter able to sell the land for a sum sufficient to reimburse himself. He subsequently assigned his claims against Daugherty, and conveyed the land to Wheeler, the latter having knowledge of the conditions upon which the deed to Keith was made.
This suit, which was to foreclose the equity of redemption of Daugherty and wife in the land, was not instituted until the 10th day of May, 1887, after the lapse of more than six years from the time Keith paid the several claims for Daugherty.
On appellant's behalf it is insisted that the transaction between the parties constituted the deed from Daugherty and wife to Keith a mortgage, to indemnify the latter against loss on account of the several sums paid by him, that a right of action accrued in his favor immediately upon making the several payments, and that since a period of more than six years has elapsed, the right to maintain the action has been barred.
It is undoubtedly true that where a mortgage is taken in a transaction between the parties, so as to constitute a mere security for the payment of a debt, without creating any relations of trust, where the debt is barred by the statute applicable to the class of debts to which it belongs, the lien of the mortgage ceases to be effective. Lilly v. Dunn, 96 Ind. 220; Arbogast v. Hays, 98 Ind. 26; Bridges v. Blake, 106 Ind. 332, 6 N.E. 833; Post v. Losey, 111 Ind. 74, 12 N.E. 121.
It may be doubted, however, whether the rule which governs in the case of a mortgage which, upon its face, shows that it was given merely as a security for a debt, would be applicable in a case like the present, where it appears by a parol agreement, which is relied on to convert an absolute deed into a mortgage, that the title was conveyed to the grantee not only as a security, but upon certain specific trusts. The right to foreclose and the right to redeem are ordinarily reciprocal rights. If the right of the mortgagee to foreclose is barred, so also is the right of the mortgagor to redeem for it must, of necessity, be true that the right of the one to enforce redemption of his title can only be coterminous...
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