Kinney v. Heuring
| Decision Date | 07 April 1909 |
| Docket Number | No. 6,895.,6,895. |
| Parties | KINNEY v. HEURING et al. |
| Court | Indiana Appellate Court |
OPINION TEXT STARTS HERE
Appeal from Superior Court, Marion County; J. M. Leathers, Judge.
Action by Collie E. Kinney, as trustee, etc., against Martha E. Heuring and others for partition of certain real estate. From a decree providing for the payment of outstanding liens from the proceeds of the property, the trustee appeals. Affirmed.
See, also, 85 N. E. 369.
Collie E. Kinney, in pro. per. Chas. Martindale, for appellees.
The questions presented in this case arise upon exceptions to conclusions of law stated by the court upon a special finding of facts.
The facts presented by the special finding are as follows: Mary W. Martin died intestate on April 14, 1905, leaving as her sole heirs John Martin, her husband, and the appellees, her children. At the time of her death she was the owner in fee simple of the premises described in the complaint, the title to all of which she acquired by conveyances through the intervention of a trustee from her husband, and certain of the premises described in the complaint were then subject to a mortgage executed by the said John Martin and the intestate while the title to the property was still in his name, and to secure notes executed by him, which mortgage and notes were owned by the appellee the Union Trust Company, upon which there was due the sum of $3,753.50; that certain other parcels of said premises were subject to a mortgage in favor of the appellee the Phœnix Mutual Life Insurance Company, executed by the said John Martin and the intestate while he still held the title to said premises, and which mortgage was given to secure notes executed by him to the said Phœnix Mutual Life Insurance Company, and upon which at the time the decree herein was rendered there was due to the said company the sum of $3,393.25; that said premises were also subject to a mortgage executed thereon by the intestate, and her husband, John Martin, joining therein, to the appellee Emeline Earnshaw, to secure notes executed by the intestate and her said husband, and payable to Emeline Earnshaw, for the principal sum of $2,000, and upon which there was due at the time the decree herein was rendered the sum of $2,342.65; that the proceeds of the last said mortgage note was received and used by the said John Martin for his own benefit, and for the support of his family, including the intestate; that certain parcels of the the real estate of which the deceased died seised was, through the intervention of a trustee, conveyed by the said John Martin to the intestate, and received by her in payment and satisfaction of an indebtedness due from said John Martin to her; that said deed was so made subject to all existing incumbrances upon the real estate conveyed; that subsequently, on September 24, 1901, John Martin, through the intervention of trustees, duly conveyed the residue of said real estate mentioned and described in the complaint to the intestate, who took the same subject to all incumbrances then existing thereon; that said property was subject to certain mechanics' liens for repairs put upon the dwelling house on said premises, while the title to the same was in the intestate, and certain liens for taxes for which the premises had been sold. On October 24, 1905, the surviving husband filed his voluntary petition in bankruptcy, and was by the District Court of the United States for the District of Indiana duly adjudged a bankrupt, and the appellant duly appointed as trustee of his estate, and as such brought this action to have said real estate partitioned. His right to partition was not denied, and, under the proceedings, the premises, not being susceptible of division, were sold by a commissioner appointed by the court for that purpose, and the questions in controversy arise over the marshaling of assets to pay the said liens thereon and the distribution of the funds arising from the sale as between the appellant and the appellees, the children and heirs of the intestate, Mary Martin; it being appellant's contention that he is entitled to one-third of the proceeds arising from the sale of the land after the payment of the costs of the proceedings as against the heirs of Mary Martin, and that the entire mortgage, mechanics' and tax liens resting on the premises shall be paid out of that interest in the funds inherited by the said children. On the other hand, the appellees, the children of the intestate, contend that, as between appellant and themselves, they are entitled to have the entire sum due upon the Earnshaw mortgage charged to the appellant's interest in the fund, and that the other liens resting upon the premises shall be charged against the common fund; the appellant and each of the children's interest in such fund bearing its proportionate part of such payment. No questions arise in the case between either the appellant or appellees, the children and heirs of the intestate, and the parties entitled to the liens upon the property, and no question is made but that appellant in this case, so far as the questions arising here are concerned, stands precisely upon the same footing as his assignor, the husband of the intestate, as he is entitled to all the rights, either in law or equity, that such husband would have been entitled to as against the children, and is subject to all the duties and obligations to which the husband would be subject.
The question that is presented here upon the proper method of charging the sum due upon the Earnshaw mortgage out of the funds in question, and the rights and equities of the parties as against each other in reference thereto, has been settled by this court in the case of Herbert v. Rupertus, 31 Ind. App. 553, 68 N. E. 598. It was there held that where the wife joins with her husband in the execution of a mortgage on her separate real estate to secure a loan made ostensibly to the wife, but where the husband in fact receives the benefit of the proceeds of the loan, even though he has not joined in the execution of the note secured by the mortgage, upon the death of the wife the mortgage debt should, as between the husband and the children, be charged to the interest taken by the husband in the mortgaged premises. The case at bar in some respects presents facts more favorable to the appellees' contention than the case cited. The special finding here shows that the debt secured by the Earnshaw mortgage was in fact and law the husband's debt, and the wife and her property but sureties therefor. He not only was a party to the mortgage, but also to the note, and received the proceeds of the loan in his own hands, and used them for his own benefit. He cannot be heard in a court of equity to say that any part of his own debt shall be charged upon the interests of his co-tenants in their common property, any more than he could do so if they had joined with him, after the death of the wife and mother, in a mortgage upon the common property received by inheritance from her to secure his own individual debt. No error intervened in charging the entire amount of the Earnshaw mortgage upon the interest of the appellant in the funds for distribution.
Nor is it easy to draw a clear distinction between the equitable rights and liabilities of these parties with reference to the mortgages in favor of the Union Trust Company and the Phœnix Mutual Life Insurance Company, and their rights and liabilities with reference to the Earnshaw mortgage. The trust company's mortgage and the insurance company's mortgage were executed by the appellant's assignor, the husband, while he owned the property. They were given to secure his own personal obligations, and the deceased, Mary Martin, the ancestor from whom all the parties claim, became the owner of the property subject to these mortgages. As we understand the special findings, the deeds by which the deceased acquired title to the premises expressly recited that the title thereby conveyed was subject to the said mortgages. But she did not by any contract, or by any provision in the deeds, assume and agree to pay the debts thereby secured. Therefore these mortgage debts are not her debts contracted either before or after her marriage. They are not debts provable against her estate. They continued to be the husband's personal debts. The only relation the intestate sustained toward the same was that the property she acquired she held subject to the payment of these specific liens. Ordinarily, where the owner of lands subject to a mortgage to secure his debt conveys the mortgaged premises, or any part of the same, to a purchaser, without any express provision with reference to the mortgage debt, such purchaser takes the same subject, of course, to the mortgage, but in so far as the rights of the mortgagor and his grantee are concerned with reference to such mortgage debt the mortgagor will be regarded as the principal in such debts, and the land conveyed standing as his surety therefor, and, if the land is sold to pay the debt, the owner will be entitled in equity to be subrogated to the rights of the mortgagee as against the mortgagor, and equity will work out his proper remedy in accordance with the rules that govern the...
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