Farmers' Bank of Mooresville v. Butterfield

• Decision Date: 14 February 1885
• Docket Number: 11,543
• Citation: 100 Ind. 229
• Parties: The Farmers' Bank of Mooresville v. Butterfield
• Court: Indiana Supreme Court

100 Ind. 229

The Farmers' Bank of Mooresville v. Butterfield

No. 11,543

Supreme Court of Indiana

February 14, 1885

Petition for a Rehearing Overruled April 25, 1885.

From the Morgan Circuit Court.

G. W Grubbs and M. H. Parks, for appellant.

F. P A. Phelps, J. H. Jordan, G. A. Adams and J. S. Newby, for appellee.

OPINION

Best, C.

Alfred Harvey and wife, on the 1st day of April, 1874, executed a mortgage upon the real estate in the complaint described to Eli Harvey, his father, to secure eight notes of $ 646 each, payable annually on and after the 25th of December, 1876. This mortgage was duly recorded, and on the 9th day of January, 1877, Eli Harvey released it of record by the following entry:

"I hereby certify this mortgage is released by payment in full. January 9th, 1877.

Eli Harvey.

"Attest: W. G. Garrison, R. M. C."

On the 16th day of February, 1877, Alfred Harvey and wife executed a mortgage upon said land to the Dundee Mortgage and Trust Company to secure a loan of $ 2,400, with a portion of which he paid the first three notes embraced in his father's mortgage. Prior to August 19th, 1881, Alfred Harvey became indebted to the appellant, the Farmers' Bank of Mooresville, in the sum of $ 4,000, for which it held his notes with his father as surety, and on that day the payment of said sum was extended six months, and to secure the same Alfred made his note with his father and James A. Hadley as his sureties, and he and his wife also made a mortgage upon said land to secure said note. On the 13th day of October, 1881, Alfred Harvey and his wife conveyed said land to the appellant, in consideration of which the appellant surrendered its note of $ 4,000 and assumed to pay the mortgage of $ 2,400 executed to the Dundee Mortgage and Trust Company. Prior to this time Eli Harvey endorsed to the appellee the first two notes still held against Alfred, and subsequently he endorsed to him as collateral security the remaining three notes, and on the 19th day of November, 1881, the appellee brought this action against Alfred Harvey, his wife, and the appellant, to foreclose the mortgage made by Alfred and wife to Eli Harvey.

The complaint consisted of five paragraphs. A demurrer, for the want of facts, was overruled to the second, third and fourth paragraphs, and an answer was filed. A cross complaint of four paragraphs was also filed. The first sought to quiet the appellant's title. The second sought the foreclosure of a prior mortgage executed to the school fund, which the appellant had been compelled to pay. The third sought the foreclosure of the Dundee mortgage, which the appellant had paid, and the fourth sought the foreclosure of appellant's mortgage. A reply in denial of appellant's answer and an answer in denial of the cross complaint completed the issues.

A jury was empanelled, over the appellant's objection, and a great many interrogatories submitted by both parties were answered. A motion by appellant for judgment in its favor upon the answers of the jury to the interrogatories was overruled, and the court found that the appellee was entitled to a foreclosure of the mortgage as to the first two notes, and against him as to the others, subject, however, to the mortgage made to the Dundee Mortgage and Trust Company, and rendered judgment accordingly. A motion for a new trial was overruled, and these various rulings are assigned as error.

The second, third and fourth paragraphs of the complaint were substantially alike, and aver, in substance, that said mortgage was released of record simply for the purpose of enabling Alfred Harvey to negotiate the loan of $ 2,400 with the Dundee Mortgage and Trust Company, with an agreement that such mortgage should remain a continuing security for the payment of said notes until said Alfred should execute a second mortgage upon said land to secure said note, which he agreed to do upon demand; that such mortgage has not been executed, nor have the notes been paid, and that the appellant, at the time it took its mortgage, and at the time it received a conveyance of said land, had actual notice of such facts and knew that said mortgage remained a subsisting security for the payment of said notes.

The release of the mortgage under the circumstances stated did not operate to extinguish it, but simply to cancel the record of its existence, and thereafter it remained in force as an unrecorded mortgage. Etzler v. Evans, 61 Ind. 56.

The notion of appellant, that the mere act of cancelling the record operated as an extinguishment of the mortgage, and that such lien, if any, as Eli Harvey thereafter had, grew out of and depended upon the agreement of Alfred to execute another mortgage, can not be sustained, and we, therefore, pass the question as to whether or not such agreement is within the statute of frauds.

The entry of satisfaction operated as an extinguishment of the mortgage as to all who had no notice of its continued existence, but as to such it continued a lien notwithstanding such entry. These paragraphs were, therefore, sufficient, and the demurrer properly overruled.

The motion of appellant for judgment in its favor upon the answers of the jury to interrogatories was properly overruled, as such motion is unauthorized on the trial of an equitable cause by the court. Such motions are only entertained when a cause is tried, and a general verdict, with answers to interrogatories, is returned by the jury. Section 547, R. S. 1881; Louthain v. Miller, 85 Ind. 161.

The appellant also insists that the court submitted the cause to a jury for trial, and that such action was erroneous. An examination of the record leads us to a different conclusion. Many interrogatories were submitted to the jury, but as this was done, as the record recites, for the information of the court, and as the court made its finding as is usual in equitable cases, we can not say that the cause was submitted to and tried by the jury. The practice in such cases does not contemplate the submission of the issues to the jury, but only questions of fact involved in the issues, and where nothing more than this is done, no error has been committed. Ketcham v. Brazil Block Coal Co., 88 Ind. 515.

The instructions asked by appellant were properly refused, for the reason that they embraced the law as applicable to all the issues in the case, and were not limited to such rules as would have enabled the jury to...