Home Owners' Loan Corp. v. Henson
| Decision Date | 19 November 1940 |
| Docket Number | 27465. |
| Citation | 29 N.E.2d 873,217 Ind. 554 |
| Parties | HOME OWNERS' LOAN CORPORATION v. HENSON et al. |
| Court | Indiana Supreme Court |
Appeal from Lawrence Circuit Court; John C. Branaman Judge.
Walter W. Houppert, of Indianapolis, and R. L Mellen, of Bedford, for appellant.
Clarence Donovan, of Bedford, for appellee.
On May 28, 1934, appellant loaned to appellee, Lois Ramsey, now Lois Ramsey Henson, the sum of $1,110.93, to pay off certain existing liens against real estate located in Lawrence County, Indiana. Lois Ramsey Henson represented to appellant that the real estate was her individual property. The loan was evidenced by a promissory note for $1,110.93, executed by appellee, Lois Ramsey Henson, and payable to appellant herein. At the time said note was executed and delivered, the appellee, Lois Ramsey Henson, executed a mortgage upon the above mentioned real estate to secure the payment of said note. After this loan was so made and the proceeds thereof used in paying and discharging said existing liens, appellant learned that Eathel Ramsey, former husband of Lois Ramsey Henson, died intestate on August 8, 1933, the owner of said mortgaged real estate; that there was no administration of his estate, and that he left as his sole and only heirs at law, Lois Ramsey Henson, his widow, Marie Ramsey, now Marie Ramsey Deitz, Raymond Ramsey, Eloise Ramsey, Bettie Ramsey and Robert Ramsey, his five minor children, and that said widow and said children owned said mortgaged real estate at the time said loan was made and said mortgage executed; that Marie Ramsey thereafter married Louis Deitz. On the failure and refusal of the said Lois Ramsey Henson to pay the note according to its terms, appellant filed its complaint against said widow and her second husband, and against said five children and the husband of the married daughter on said note and mortgage seeking a personal judgment against Lois Ramsey Henson on her said note, and to foreclose said mortgage against her as maker and against her children under the doctrine of equitable subrogation. Lois Ramsey Henson and Joshua Henson, her present husband, did not appear and were therefore defaulted. A guardian ad litem was appointed for the infant defendants who filed answers in general denial.
The evidence was stipulated and there is no conflict. The only question presented is purely a question of law. The trial court rendered judgment in favor of appellant and against appellee, Lois Ramsey Henson, in the sum of $1,503.78, being the principal amount of said note, interest, advancements and attorney fees together with cost; that the appellant was entitled to foreclose its said mortgage against Lois Ramsey Henson and her husband, Joshua Henson, and to a sale of her undivided one-third interest in said real estate to pay and satisfy said indebtedness. The trial court found in favor of the other defendants and against the appellant, and found that the appellant was not entitled to a decree of foreclosure against their interests in said mortgaged real estate. Judgment was rendered accordingly.
Appellant's motion for a new trial was overruled and the overruling of said motion is the only error assigned upon appeal.
The facts necessary to understand the question here presented are briefly stated as follows: Eathel Ramsey became the owner of the real estate in question on November 20, 1930, and took possession thereof. On November 22, 1930, Eathel Ramsey borrowed of the Fidelity Finance Corporation of Bedford, indiana, the sum of $500, and executed his note for said amount, payable to the said Fidelity Finance Corporation, and to secure the payment of said note, the said Eathel Ramsey and Lois Ramsey, his wife, executed to the Fidelity Finance Corporation their mortgage upon said real estate, which mortgage was duly recorded. In 1930, there existed valid street assessments against said property in the sum of $272.04, and an additional assessment of $274.01, for the construction of a sewer, and by the provisions contained in the deed, the said Eathel Ramsey assumed and agreed to pay the above mentioned street and sewer assessment liens. Eathel Ramsey died intestate, a resident of Lawrence County, Indiana, on August 8, 1933, leaving as his sole and only heirs at law his widow and five minor children above named. There was no administration of his estate and all of his indebtedness, including expenses of last sickness, funeral and burial, were fully paid and discharged except the balance due on each of the above mentioned liens and the taxes on said real estate. Said widow and children continued to live in and occupy said real estate as their home until the present time, and did not pay anything on said liens and taxes except as such were paid from the proceeds of the loan made by appellant.
Thereafter, Lois Ramsey made written application to appellant for a loan on said real estate in the sum of $1,110.93, stating in her application that she was the sole owner of the real estate; that the mortgage above mentioned herein was due and that the street and sewer assessments were past due, and that the taxes against said real estate were delinquent, and that the lienholders were threatening to and would foreclose said liens; that she was making application for a loan to obtain money with which to pay off said lien and save said home from being sold on foreclosure.
The application was made in accordance with the rules and regulations of the Home Owners' Loan Corporation, and she furnished and delivered to the local offices of appellant an abstract of title of said real estate. Appellant inspected said real estate and the dwelling thereon and found that the dwelling thereon was then in a bad state of repair, and was in need of a new roof, porch repair, outside paint, and repair to the foundation. Appellant granted the loan on condition that the above mentioned repairs be made and paid for from the proceeds of said loan, and that the balance due on the above mentioned mortgage, street assessment lien, sewer assessment lien, and back taxes be paid from the proceeds of said loan. All of which was agreed to and accepted by the said Lois Ramsey. On the day said loan was completed there was due and payable on the liens herein mentioned the following: Fidelity Finance Corporation balance due on its note and mortgage $219.10; 'M' street assessment lien, $267.72; sewer assessment lien, $269.04; taxes $56.77; contractors, mechanics, materials, and labor in making repairs to dwelling, $267.70; or a total of $1,080.33.
At the time Lois Ramsey made her application for the above mentioned loan she executed an affidavit to the effect that at the time the mortgage to the Fidelity Finance Corporation was made, Eathel Ramsey and Lois Ramsey were husband and wife, that they were the owners of the real estate here in question, that on July 8, 1933, Eathel Ramsey died and that Lois Ramsey had not since married and was then a single woman. The abstract of title furnished to appellant was examined by the examining attorney for the Home Owners' Loan Corporation and after examining said abstract, certified to appellant that Lois Ramsey was the owner of said real estate subject to the above mentioned liens. Thereafter the loan was made in an amount sufficient to pay all of said liens and the additional sum of $30 to cover cost of loan, including abstract fee, examination of said abstract, property inspection fee, and the cost of recording the mortgage, which made a total of $1,110.93. Upon the above facts the court rendered the judgment as heretofore stated.
Appellant contends that, under the complaint and the facts as above set out, it was entitled to be subrogated to the rights of the above lienholders, and that the findings and decision of the court in favor of the children was not sustained by sufficient evidence.
It will be observed from the record that the interests of no third party has intervened, and that the parties to this litigation have not changed their positions by reason of the several transactions above set out. The real estate in question was subject to the above mentioned liens, and the interest of the minor children of Mr. and Mrs. Ramsey could and would have been subjected to sale to make assets to pay the same. Appellant was asked to loan the money for the very purpose of freeing the real estate of these liens. The loan was made to Lois Ramsey, now Lois Ramsey Henson, under a mistake of fact. She represented in her application to appellant that she was the sole owner of the mortgaged real estate. While it is true that the abstract of title showed that Lois Ramsey was not the sole owner, and while it may be true that the attorneys who examined the abstract for appellant were either negligent or incompetent in making such examination; we do not think ...
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