Mutual Ben. Life Ins. Co. v. Bachtenkircher
| Decision Date | 01 November 1935 |
| Docket Number | 26452 |
| Citation | 198 N.E. 81,209 Ind. 106 |
| Parties | MUTUAL BEN. LIFE INS. CO. v. BACHTENKIRCHER |
| Court | Indiana Supreme Court |
Claim by the Mutual Benefit Life Insurance Company against Cecil Bachtenkircher, as receiver of the State Bank of Francesville. Judgment for defendant, and from an order refusing a new trial, plaintiff appeals.
Affirmed.
Appeal from Pulaski Circuit Court; W. C. Pentecost, Judge.
Jones Hammond & Buschmann, Leo M. Gardner, and Wm. H. Krieg, all of Indianapolis, Howard A. Sommers and Lowell S. Love, both of Crawfordsville, for appellant.
Horner, Thompson & McDowell, of Winamac, for appellee.
On the 14th day of February, 1920, one William A. Moon became indebted to the appellant in the sum of $ 16,000 evidenced by his promissory note of that date, secured by first mortgage upon real estate in Putnam county, Indiana; by mesne conveyances Harry W. Foster became the owner of said mortgaged real estate, and, on July 2, 1924, by warranty deed, conveyed the same to State Bank of Francesville, Ind by the terms of said conveyance, the said bank assumed and agreed to pay, as part of the purchase price of said land, the balance of $ 15,000 then remaining unpaid of the original debt of $ 16,000 represented by said note and mortgage; thereafter, said bank entered into extension agreements with appellant whereby it agreed to pay said balance of $ 15,000; afterwards, August 8, 1930, said bank became insolvent and the appellee, Cecil Bachtenkircher, was appointed its receiver by the Pulaski circuit court; on November 1, 1930, upon authority of said court, said Bachtenkircher, as receiver of the State Bank of Francesville, sold and conveyed said mortgaged real estate to William C. Myers, who assumed and agreed to pay the balance due on said mortgaged note; thereafter, on November 5, 1930, said Myers conveyed said real estate to Fay Keyes and Eleanor Keyes, who assumed and agreed to pay said debt.
On November 3, 1930, the appellant filed with said receiver, in the Pulaski circuit court, its claim based upon said note and mortgage for the balance due in the sum of $ 13,500 and interest as evidenced by the original indebtedness of said Moon, secured by the mortgage upon the Putnam county real estate. The assumption of the payment of said debt by the said State Bank of Francesville is fully alleged in the claim.
While said claim was pending in the Pulaski circuit court against said receiver, the appellant, on the 29th day of April, 1931, filed a foreclosure action in the Putnam circuit court upon said note and mortgage, in which action the said Moon, who executed the same, and the other persons, who had assumed the payment of the debt in deeds of conveyance, including the State Bank of Francesville and Cecil Bachtenkircher, as receiver of said bank, were made parties defendant. The complaint demanded personal judgment against said Moon and wife, Guy Drake, Harry W. Foster and wife, William C. Myers, Fay Keyes, and Eleanor Keyes, and as to all defendants, it prayed that the equity of redemption should be forever barred and foreclosed. The decree was rendered against William C. Myers, Fay Keyes, and Eleanor Keyes for $ 15,374.29. Both the State Bank of Francesville and Cecil Bachtenkircher, as receiver of said bank, were duly served with process. Before filing the foreclosure action in the Putnam circuit court, the appellant petitioned the Pulaski circuit court for authority to sue said receiver of the State Bank of Francesville, which authority was granted by the court in the following language: 'It is, therefore, ordered that the petitioner, Mutual Benefit Life Insurance Company be and it is hereby authorized to sue said Receiver and make said Cecil Bachtenkircher as Receiver of said State Bank of Francesville a party defendant in a suit to be filed by said petitioner in the Putnam Circuit Court to foreclose petitioner's mortgage on the real estate described in said petition and situated in Putnam County, Indiana.'
The order further directed the receiver to make defense to said foreclosure suit when filed.
The receiver appeared in the Putnam circuit court and filed answer in general denial to the appellant's complaint. The cause was submitted to the court and judgment rendered in the sum of $ 15,374.29, as above described. An order of sale was issued to the sheriff of Putnam county, and said real estate was sold to appellant for the sum of $ 11,256.17 on December 12, 1931. The real estate was not redeemed and deed was executed to appellant.
No further steps were taken upon the claim filed against the receiver in the Pulaski circuit court until February, 1932, when the appellant asked to have its claim allowed in full against the assets of the State Bank of Francesville. Thereupon, the receiver filed an answer in which he recited in detail the action of the appellant filed in the Putnam circuit court upon the note and mortgage described in said claim, including the specific allegations that both the receiver and the State Bank of Francesville were duly summoned to appear to said action in the Putnam circuit court and file answers; that the foreclosure complaint fully alleged the execution and assumption of the payment of the debt by the State Bank of Francesville in the deed conveying the real estate to the bank, but did not demand a personal judgment against the bank or the receiver; that personal judgment was rendered against the defendants Myers and Keyes and wife only, but the mortgage was foreclosed as against all defendants; that the note and mortgage described in the claim filed with the receiver in the Pulaski circuit court are the same note and mortgage sued upon in the Putnam circuit court; that the Putnam circuit court was a court of competent jurisdiction and had complete jurisdiction of the subject-matter of said action and of all the parties thereto; that the judgment of the Putnam circuit court was for the full amount due upon the note and mortgage; that the liability, if any, of the State Bank of Francesville upon said note and debt so sued upon was in issue before the Putnam circuit court in said cause; that no personal judgment was given or rendered in said cause by the Putnam circuit court against either the receiver or the insolvent bank; that no dismissal of said cause, or any part thereof, was asked, given, or entered by said court in said cause as to said State Bank of Francesville, or as to said receiver; that the judgment of the Putnam circuit court was duly entered and that the same has never been modified, set aside, or appealed from, but remains in full force and effect; that by reason of said facts the said note sued on in said claim filed in the Pulaski circuit court was, by the judgment and decree of the Putnam circuit court, merged therein; and that any liability of said bank, or the receiver thereof, upon said claim, was by the judgment of the Putnam circuit court fully determined and adjudicated.
The appellant replied to said answer by general denial. The cause was submitted to the court for trial upon an agreed statement of facts. The court rendered judgment against the appellant and for the appellee. Appellant's motion for a new trial, on the ground that the finding of the court was not sustained by sufficient evidence and was contrary to law, was overruled. From said ruling the appellant has perfected this appeal.
In the foreclosure suit in the Putnam circuit court, the appellant elected to and did take a personal judgment against three defendants, William C. Myers, Fay Keyes, and Eleanor Keyes, but did not take personal judgment against the other defendants who had assumed and agreed to pay the debt by their agreements stated in the several deeds of conveyance.
One question to be determined is: What is the effect of the Putnam circuit court judgment upon the note which is the basis of the appellant's action? The bank for which appellee was receiver was personally liable for the payment of the note. Both it and the receiver were made defendants in the foreclosure suit, duly summoned, and appeared, but appellant did not demand a personal judgment against them. No reference was made in the Putnam circuit court judgment to the claim pending in the Pulaski circuit court. There was no attempt by appellant to preserve its rights to keep the note alive for further action.
It is elementary that the effect of a judgment is to merge the cause of action on which it is based. It is recognized generally that the judgment is of a higher order of security than an ordinary cause of action, and for this reason the latter is merged in the former. It is a common-law rule that a judgment on a joint obligation against one or more joint obligors is a bar to an action against any other joint obligor or obligors. When merged in a judgment, the original cause of action is gone forever. 15 R. C. L. 786, § 242; 34 C. J. 750, § 1162; 34 C. J. 977, § 1393; Lawrence v. Beecher (1888) 116 Ind. 312, 19 N.E 143; Wilson v. Buell (1889) 117 Ind. 315, 20 N.E. 231; Ward et al. v. Haggard (1881) 75 Ind. 381; Marshall v....
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