Knapp v. Ellyson Realty Co.

• Citation: 5 N.E.2d 973,211 Ind. 180
• Decision Date: 10 February 1937
• Docket Number: 26723.
• Parties: KNAPP v. ELLYSON REALTY CO., Inc., et al.
• Court: Supreme Court of Indiana

5 N.E.2d 973

211 Ind. 180

KNAPP v. ELLYSON REALTY CO., Inc., et al.

No. 26723.

Supreme Court of Indiana

February 10, 1937

Appeal from Superior Court, Lake County; John F. Cody, Judge.

Sevald & Sevald, of Hammond, for appellant.

Belshaw Huebner & Belshaw, of Hammond, for appellees.

HUGHES Judge.

This is an appeal from an action to foreclose a mortgage, and for the appointment of a receiver during the year of redemption. There was a decree of foreclosure, but a refusal to appoint a receiver; and this appeal is for alleged error in refusing to appoint one.

It appears from the record and evidence that, on July 7, 1930 the appellees Johanna A. Schroeter and Jacob Schroeter were the owners in fee simple of the real estate in question which is a lot and house in the city of Hammond, Ind.; that on said day the said appellees executed a mortgage on said real estate to the Peoples Co-operative State Bank for $3,000, represented by six first mortgage real estate bonds for $500 each; that said mortgage was recorded on July 8 1930; that the said Ellyson Realty Company, subsequent to December 2, 1932, acquired title to said real estate, and, on August 26, 1933, sold same to appellees Debbrett and Debbrett under the terms of a written contract of sale wherein the said Debbretts were to pay $3,500 for said real estate.

The evidence shows that, pursuant to said contract of sale, the said Debbretts entered into possession and occupancy of said real estate and remained in possession and occupancy ever since. It further shows that the complaint to foreclose was filed on February 20, 1935; that at the time of filing the original complaint the appellant was made a party defendant, and at that time he was the owner of one $500 first mortgage bond; that after the filing of the original complaint, he bought all of the outstanding bonds, and asked to be substituted as sole plaintiff, which request was granted, and he then filed as plaintiff an amended complaint to foreclose.

It is stated in the complaint that the Debbretts are insolvent; that the mortgage debt is due; that nothing has been paid on the contract of purchase since February, 1935; that there are taxes due and unpaid on said real estate; that the house on said real estate is in need of repair, and that the Ellyson Realty Company has no equity in the property.

The errors relied upon for reversal are: (1) The court erred in refusing to appoint a receiver; (2) the court erred in refusing to permit the witness Clement B. Knapp to answer certain questions; and (3) the decision of the court is contrary to law, and is not sustained by sufficient evidence.

It is insisted by appellant that the Debbretts are not owners of the real estate as provided in section 831, Burns' 1926, section 2-3919, Burns' 1933, section 623, Baldwin's 1934, relative to sale upon execution. The statute is as follows:

'The owner of the real estate or interest therein, sold as aforesaid, shall be entitled to the possession of the same for one (1) year from the date of such sale.'

The contract of sale heretofore referred to is a contract for the sale of land, and equity looks on the vendees Debbrett and Debbrett as the owners, and the vendor Ellyson Realty Company as seized of the title in trust for the purchasers. The Ellyson Realty Company, having entered into a contract of sale with the Debbretts for the real estate in question by which contract it agreed to convey the real estate to them by warranty deed, thereafter held the legal title thereto in trust for them. As said in the case of Kimberlin et al. v. Templeton et al. (1913) 55 Ind.App. 155, 160, 102 N.E. 160, 162:

'We think it may be conceded, as a general rule, that where there is a contract for the sale of real estate, the vendee becomes the equitable owner thereof; the vendor simply holding the title as security for the purchase money. The vendee, being the equitable owner, secures all the the benefits and assumes all the risks of ownership.'

In the case of Hunter and Others v. Bales (1865) 24 Ind. 299, 302, it is said:

'In equity, a contract for the sale of land is not merely executory, but the vendee becomes the owner, and the vendor is seized in trust for him, and has a mere lien on the land for the purchase money, upon the maxim that 'equity looks upon that as done which is agreed to be done.''

The contract in question is a valid contract, and one upon which the vendees would be entitled to specific performance upon full compliance by them. Jordan et al. v. Johnson et al. (1912) 50 Ind.App. 213, 98 N.E. 143; Railroadmen's Building & Savings Association v. Rifner (1928) 88 Ind.App. 580, 163 N.E. 236.

In the case of Sutherland v. Goodnow (1884) 108 Ill. 528, 48 Am.Rep. 560, the court, in discussing this subject, said:

'At law a deed is essential to vest title to real estate, but in equity the title will be treated and protected as being where the parties have contracted it shall be, for that purpose...