Horn v. The Indianapolis National Bank

• Citation: 25 N.E. 558,125 Ind. 381
• Decision Date: 14 October 1890
• Docket Number: 13,931
• Parties: Horn et al. v. The Indianapolis National Bank
• Court: Supreme Court of Indiana

25 N.E. 558

125 Ind. 381

Horn et al. v. The Indianapolis National Bank

No. 13,931

Supreme Court of Indiana

October 14, 1890

From the Hamilton Circuit Court.

The judgment is reversed, with instructions to restate conclusions of law, and render judgment upon the special findings in favor of the appellant Horn, and with the further instruction to sustain the demurrer of appellant Hawkins to the complaint.

T. J Kane and T. P. Davis, for appellants.

L Wallace, Jr., and R. Graham, for appellee.

OPINION

Elliott, J.

It is alleged in the complaint of the appellee that in suits brought by Benjamin F. Horn and James R. Carson against Eber Teter and George Teter, the appellee recovered judgment for $ 5,080, and that a decree was entered foreclosing a mortgage executed by the Teters to the appellee on four acres of land with its appurtenances; that on the land was a barrel-heading factory, comprising buildings, engines and machinery. It is also alleged that Horn recovered a judgment for $ 10,000, and obtained a decree of foreclosure; that a copy of this decree was issued to the sheriff, who advertised the property for sale; that he sold the property to Horn for $ 2,000, which was less than one-fifth of its value, and that the sheriff subsequently made a return, wherein he stated that Horn purchased the land and buildings without the heading factory or appurtenances, whereas he did, in fact purchase the land with its appurtenances. It is further alleged that the appellee gave notice at the time of the sale that it would contest the right of any one to hold the property purchased at the sale as personalty; that the Teters are insolvent, and that appellee's judgment can only be collected from the property sold to Horn; that Horn threatens to remove the property from the State, and will remove it unless enjoined; that he has been in possession of the property since 1885, and that the rental value of the property was from $ 2,000 to $ 4,000 per annum; that he has given no credit for rent, and that he has removed from the State and converted to his own use property of the value of $ 12,000.

Horn entered a special appearance and moved to quash the notice given him by publication as a non-resident. The contention that the notice was not published for the time required must fail. The proof of publication shows that three full weeks of publication expired more than thirty days before the first day of the term at which he was notified to appear, and this was sufficient, as more than fifty-one days elapsed between the first publication and the first day of the term. Hill v. Pressley, 96 Ind. 447.

It was proper to make a nunc pro tunc entry of the order for publication. No final judgment had been entered at the time the motion to quash was interposed, so that the case was still pending when the order was entered. The proceedings were, therefore, in fieri at the time the nunc pro tunc entry was made, and hence it was clearly within the power of the court to make its record speak the truth. The rule which applies in cases where the action has been fully terminated by a final judgment is not relevant to such a case as this.

The complaint is in the nature of a bill to redeem real property, and the general rule in such cases is, that the plaintiff must make an equitable tender of the amount due the senior lien-holder. Nesbit v. Hanway, 87 Ind. 400; Kemp v. Mitchell, 36 Ind. 249. But while the general rule is that an equitable tender must be made by offering to pay what may be found due upon an accounting, yet there are exceptions to that rule. One of these exceptions exists where it appears that the lien-holder has money in his hands exceeding the amount of his lien which he is equitably bound to apply to the discharge of his claim. 2 Jones Mort., section 1096. The principle which underlies the rule requiring an equitable tender is, "that he who asks equity must do equity." This is the reason for the rule, and where the reasons fails so, also, does the rule itself. Beyond doubt the reason fails where the senior lien-holder has money in his hands which it is his duty to apply to the payment of his lien, and which exceeds the amount of his claim. As the complaint in this case shows that the senior lien-holder had money in his hands which it was his duty to apply to the payment of his lien the case falls not within the general rule, for that fails, but falls within the exception. We must, therefore, hold that, as the allegations of the complaint are confessed by the demurrer, the failure to make an equitable tender is excused by the facts pleaded. In asserting this conclusion we do not inquire whether Horn was chargeable with the rents received by him for leaving the amount of the rent out of consideration, it still appears that he had twelve thousand dollars in his hands; hence, we need not, and we do not, examine the question of the relevancy of the doctrine declared in the cases of Gavin v. Graydon, 41 Ind. 559; Elwood v. Beymer, 100 Ind. 504.

We do not, at this point, decide whether the appellee has any right to redeem, but pass that question, for the reason that it is fully presented in the special finding.

We are unable to discover any theory upon which it can be held that a cause of action is stated against Hawkins. He was, it is true, the sheriff who made the sale; but as the complaint seeks to redeem it affirms the sale, and, as it does this, there can be no cause of action against the officer who made the sale, even if it be conceded that he did not make a true return. It has been again and again decided that a complaint must proceed on a definite theory, and be good on that theory. Mescall v. Tully, 91 Ind. 96; First National Bank v. Root, 107 Ind. 224, 8 N.E. 105; Louisville, etc., R. W. Co. v. Thompson, 107 Ind. 442, 8 N.E. 18; Rahm v. Deig, 121 Ind. 283, 23 N.E. 141. The only theory upon which this complaint can be good, if, indeed, it can possibly be good on any, is that it shows a right to redeem from a sale made by a sheriff, and upon that theory it is legally impossible that it can be good against the officer by whom the sale was made. The demurrer filed by Hawkins must be sustained.

The second paragraph of the answer of the appellant Horn is a partial one, and is addressed to so much of the complaint as charges him with the rent of the property of which he was in possession prior to the sheriff's sale. This answer alleges that the appellant made permanent improvements, of the value of fifteen hundred dollars, for which he asks credit.

Upon the assumption which we provisionally make, that the complaint was good, the answer was clearly bad. A mortgagee in possession can not embarrass the right to redeem by making improvements. He may make repairs, but he can not make improvements at the expense of redemptioners. Miller v. Curry, 124 Ind. 48, 24 N.E. 219.

The special finding states the facts substantially as follows: On the 7th of May, 1886, Eber Teter and George Teter were the owners, as partners, of four acres of land. Situated on this land, and attached to it were a heading factory and appurtenances. On the day named a suit was pending in the Hamilton Circuit Court, wherein James R. Carson and Benjamin F. Horn were plaintiffs and the Teters, the appellee and others, were defendants, and in that suit a decree of foreclosure was rendered, in which judgments were embodied. Carson recovered $ 2,935.80, Horn $ 10,889.20, and the appellee $ 5,088.63. In June, 1883, and prior to that time the Teters were partners, doing business under the name of Teter & Bro.; their business was that of manufacturing barrel headings, and they were the owners of a factory properly equipped for that business. The land on which the factory was situated was purchased by the firm of Teter & Bro., but the title was taken in the name of George Teter, trustee. On the 29th day of June, 1883, Teter & Bro. executed a chattel mortgage to James R. Carson on the partnership property, in which the property was designated "as the following personal property: One slack barrel heading factory, consisting of boiler, engine, two planers, two jointers, two heading turners, four saw rigs, two thousand feet of inch gas pipes and connections, and all other property or incidents connected therewith, including pulleys, belts, tanks, etc., now located on part of lot numbered four of Coles and Jones' addition to the town of Cicero, Hamilton county, Indiana." This chattel mortgage was executed to secure and indemnify the mortgagee against loss as surety upon a promissory note executed by Teter & Bro. for five thousand dollars, and it was provided in the mortgage that the mortgagors might remove the heading factory to the four acres of ground situated in the town of Sheridan. This mortgage was duly recorded. During the latter part of the summer of 1883 the factory and appurtenances were removed to Sheridan, and attached to the four-acre tract of land. Before the removal of the factory to Sheridan, Teter & Bro. became indebted to Horn in the sum of five thousand dollars, and to secure this indebtedness, and also to secure advances that might subsequently be made by Horn, the firm of Teter & Bro., and the trustee, George Teter, executed to him, on the 24th day of October, 1883, a mortgage on the property in Sheridan. This mortgage, after describing the land, recited that "And this sale includes all machinery, pipes and appurtenances connected therewith on said real estate." It was also declared in the mortgage that it was subject to the mortgage of James R. Carson. The mortgage to Horn was recorded on the 25th day of October, 1883. On the 20th day of November, 1883, Teter & Bro. and their trustee executed a conveyance to Carson, in terms granting all the property to...