First Nat. Bank of Peoria v. Farmers' & Merchants' Nat. Bank of Wabash

• Decision Date: 26 May 1908
• Docket Number: No. 21,282.,21,282.
• Citation: 84 N.E. 1077
• Parties: FIRST NAT. BANK OF PEORIA et al. v. FARMERS' & MERCHANTS' NAT. BANK OF WABASH et al.
• Court: Indiana Supreme Court

84 N.E. 1077

FIRST NAT. BANK OF PEORIA et al.

v.FARMERS' & MERCHANTS' NAT. BANK OF WABASH et al.

No. 21,282.^*

Supreme Court of Indiana.

May 26, 1908.

Appeal from Circuit Court, Starke County; George Burson, Special Judge.

Action by the Burlington Savings Bank against Charles A. Jamison and others, in which the Farmers' & Merchants' National Bank of Wabash and others, defendants, filed a cross-complaint against plaintiff and codefendants, the First National Bank of Peoria, Ill., and others. From a judgment adjudging the rights of the parties, the First National Bank of Peoria, Ill., and others appealed to the Appellate Court; whence the cause was transferred to the Supreme Court, under Burns' Ann. St. 1908, § 1394, subd. 2. Reversed, and new trial ordered.

For opinion in Appellate Court, see 82 N. E. 1013.

F. L. Dukes, C. H. Peters, R. D. Peters, and R. W. McBride, for appellants. H. R. Robbins, Pentecost, Boyd & Julian, and Sayre & Hunter, for appellees.

GILLETT, C. J.

This suit is the outgrowth of one brought by the Burlington Savings Bank of Burlington, Vt., to foreclose a mortgage on certain real estate in Starke county. Three cross-complaints were filed. The first was filed by certain creditors who had recovered a judgment in attachment in Pulaski county against the owner of the equity of redemption, in which action a writ of attachment had been levied on said lands while the action was pending in Starke county. It is sought by said cross-complaint to have said judgment declared a senior lien on said real estate as against all other interests and liens. The second cross-complaint was filed by Seth W. Freeman to foreclose a trust deed on said lands, and the third cross-complaint, under which appellants claim, was to establish as a senior lien on said lands, as against all other interests and liens, a trust deed executed to Charles R. Wheeler, as trustee. Process issued on the original complaint, and after the filing of the first cross-complaint the record shows that the original plaintiff filed answer to said cross-complaint. The record then shows a default as to certain defendants, and that all defendants not defaulted appeared and filed answers. The answers (except of the plaintiff) are not on file, and we construe said defaults and the appearances and other answers as relating to the original action. A submission was entered, and a decree foreclosing the plaintiffs' mortgage followed. This decree was entered “without prejudice to the interest of the complainant Charles R. Wheeler and the First National Bank of Peoria, Ill., to file answer by cross-complaint” by the first day of the next term of court. On said day, Seth W. Freeman filed his cross-complaint, and subsequently, after defaulting certain defendants thereto and other defendants filing answers, which defaults and answers we construe as relating to said second cross-complaint, the latter cause was submitted, and the plaintiff therein obtained a decree of foreclosure. After this foreclosure, and after a number of entries resetting the case for trial, the record states that: “Now again come the parties by counsel and the defendant the First National Bank of Peoria, Ill., files answer to the cross-complaint, in these words, to wit.” The answer which follows states that: “Comes now the defendants in the above-entitled action, Charles R. Wheeler, trustee for the First National Bank of Peoria, and for answer to the cross-complaint of its codefendant, the Farmers' & Merchants' National Bank of Wabash, Ind.,” and other mentioned defendants, says, etc. Then follows an entry that “said defendant also files cross-complaint herein making all codefendants defendants hereto, in these words, to wit.” It is not stated in the body of this complaint who files it, although from some of its averments it would appear that Wheeler, trustee, was the plaintiff. An answer of general denial was filed by parties who claim under said attachment judgment, and it is then recited that: “This cause, being at issue as to the priority of liens, by agreement is submitted to the court for trial.” There is a general finding that all of the allegations of the cross-complaint of the attaching creditors are true, and the particular facts concerning the proceedings in attachment and the Pulaski county judgment are then set forth, including the name of the defendant (a defendant below), the date that said judgment became a lien, and there is also a finding for the First National Bank of Peoria, Peoria, Ill. (sic.), that its judgment is a lien, but is subsequent and junior to the judgment liens of the attachment creditors. The record states that “the cross-complainants, the First National Bank of Peoria, and Charles R. Wheeler, trustee, object and except” to the finding. The most that we can deduce from the judgment proper is that the described judgments of said attaching creditors are each liens on certain real estate, and are prior and superior liens to the mortgage of the “First National Bank of Peoria, Peoria, Ill.,” which is described as to date, etc., and that said mortgage is a lien on the lands therein described, but is a subsequent and junior lien to the judgments in attachment. A motion for a new trial was filed by “the cross-complainant, the First National Bank of Peoria, Peoria, Ill., Charles R. Wheeler, trustee in the above-entitled cause,” assigning, among other causes: (1) That the decision of the court is not sustained by sufficient evidence; and (3) that the decision of the court is contrary to law. The bill of exceptions which was afterwards filed recites that “the cause, being at issue, is submitted for trial upon the issues joined.” There is in the record an admission, hereinafter more particularly referred to, to the effect that the trust deed “was issued to the cross-complainants,” and so far as we have perceived the whole controversy upon the trial related to the question of priority as between said mortgage and said attachment.

The pleadings and record were very carelessly prepared in the court below, and, as the questions thereby presented for the most part relate to our jurisdiction, we have been prompted to examine the transcript critically.

Error is assigned by the First National Bank of Peoria, Ill., and Charles R. Wheeler, trustee, for the First National Bank of Peoria, Ill. The framework of the proceeding shows that the latter was actively defending and prosecuting in his capacity as a trustee (although made a defendant to some of the complaints in his personal capacity), and therefore it will be assumed that it is in his trust, rather than in his personal, capacity, that he describes himself as appellant. Beers v. Shannon, 73 N. Y. 292;Hallett v. Harrower, 33 Barb. (N. Y.) 527. It may also be suggested that these appellants, although two in number, really represent but one interest; that of said bank.

It is argued that certain parties defendant who were defaulted, among them the owner of the equity of redemption and one of the makers of the mortgage under which appellants claim, should have been made parties appellant. We have set out enough of the record above to show that the cause was tried on the theory that said Illinois bank and Wheeler, trustee, were the cross-complainants in the cross-complaint filed on the bank's behalf, and to this theory the parties will be held on appeal. Jones v. Thompson, 12 Cal. 191. This being the theory below, said cross-complainants were not only properly joined as appellants, but the fact that they had filed a cross-complaint, which was in a sense an original action, changed the general rule as to the making of co-parties, and it was sufficient to make all other parties appellees, who were interested in maintaining the judgment, or who had a standing to appeal therefrom. See Elliott's App. Pro. § 156.

The question arises, however, whether certain persons who were parties defendant to the original action or parties in some capacity to some of the cross-complaints, and are not parties here, should have been made appellees. Since it was sought in the original suit to procure a decretal order for the sale of the equity of redemption, the question of the adjustment of the rights of parties to the record having interests in the mortgaged premises, was so involved that further process was not necessary to authorize such adjustment, upon the filing of cross-complaints. Clements v. Davis, 155 Ind. 624, 57 N. E. 905. It does not, however, follow from this premise that such persons are parties to the judgment appealed from. Although technically in court, they ought to have been ruled to answer. Buchanan v. Berkshire, etc., Co., 96 Ind. 510. The failure to answer was not an admission of the allegations against them (Purple v. Farrington, 119 Ind. 164, 21 N. E. 543, 4 L. R. A. 535), and while it is true that the making of an issue might be waived by going to trial without one, yet to this end it ought to have been shown that there was such an appearance subsequently as to authorize the conclusion that there was a waiver. The usual entry by the clerk, “Now come the parties,” etc., presumably relates to parties already appearing. See Fee v. State ex rel., 74 Ind. 66; 2 Ency. of Pl. & Pr. 600. As a trial without an issue, where not waived, would be at least erroneous. It will not unnecessarily be assumed that parties not answering a cross-complaint or defaulted for a failure to do so were in court for the purposes of a trial on such complaint. Apart from this, however, we think it must be affirmed that the judgment in question settled only questions as between appellants and the attaching creditors. It does not in terms declare for or against the right of any one else, and the prior entry, wherein it is recited that the cause, being at issue as to the priority of liens, is submitted, etc., shows that the contest related to a matter wherein issues had been framed. This is made even more apparent by the bill of...