Oglebay v. Todd

• Decision Date: 15 December 1905
• Docket Number: 20,557
• Citation: 76 N.E. 238,166 Ind. 250
• Parties: Oglebay et al. v. Todd et al
• Court: Indiana Supreme Court

76 N.E. 238

166 Ind. 250

Oglebay et al. v. Todd et al

No. 20,557

Supreme Court of Indiana

December 15, 1905

Rehearing Denied February 23, 1906.

From Tipton Circuit Court; James F. Elliott, Judge.

Suit by William R. Oglebay and others against Lemuel S. Todd and others. From a decree for defendant Todd on his cross-complaint, William R. Oglebay and another appeal. Transferred from Appellate Court under §§ 1337u Burns 1901, Acts 1901, p. 590.

Affirmed.

Oglebay & Oglebay, for appellants.

Gifford & Gifford, for appellees.

OPINION

Gillett, C. J.

This is a second appeal. See Todd v. Oglebay (1902), 158 Ind. 595, 64 N.E. 32. Although there were other parties below who are also parties to the record here, the real controversy is between William R. Oglebay and Lemuel S Todd, and for the purposes of this opinion it is not necessary to explain the relations of said other parties to the litigation.

The essential facts in the case are as follows: Joab Woodruff executed a mortgage on a lot in the city of Lebanon, Indiana, and he afterwards conveyed it by deed to Todd. The latter, in turn, deeded the lot to Mary Eshelman. In each deed it was stated that the grantee assumed and agreed to pay said encumbrance. The deed to Eshelman was duly recorded. The holder of the mortgage afterwards instituted a suit, making Todd, Woodruff and Eshelman parties defendant. It was sought by said suit to hold Woodruff and Todd personally liable on their respective promises to pay said mortgage, and to procure a foreclosure as against Eshelman. Such proceedings were afterwards had in said action that a judgment and decree was rendered as prayed. An order of sale issued on the decree, under which the sheriff, on August 12, 1898, struck off the land to the execution plaintiff for a sum but slightly in excess of the amount of the costs. On January 1, 1899, Todd paid the balance of the judgment to the attorneys of the execution plaintiff, and they entered on the margin of the record what purported to be an assignment thereof to him. May 29, 1899, Oglebay, after examining the record of said foreclosure, and observing the attempted assignment of the judgment, took a quitclaim deed from Eshelman, and on July 1, 1899, he paid into the clerk's office the amount of the sale, with interest, and obtained a certificate of redemption. Todd subsequently caused a certified copy of said decree to be issued to the sheriff, and the latter, acting thereunder, offered the lot at sheriff's sale, and it was struck off to Todd. Pending the advertisement that the lot would be sold by the sheriff, Oglebay instituted this suit, its purpose being to quiet title as against said decree, and to enjoin the proposed sale. Afterwards Oglebay filed a supplemental complaint, setting up the fact of the pretended sale, and asking to have it set aside. Todd filed an answer and a cross-complaint. A demurrer was sustained to the answer, and the cross-complaint was stricken out. Todd elected to abide his exceptions to these rulings and appealed. This court held upon said appeal that the answer was sufficient, and, as the cross-complaint was germane to the original action, that the court below erred in striking out said pleading. Upon the reversal of the cause Todd filed an amended cross-complaint. The purpose of this cross-complaint, like the first, was to establish Todd's suretyship and his title to the decree of foreclosure. After issues of fact had been joined, there was a trial, and the court, at the request of the parties, found the facts specially and stated its conclusions of law thereon. It was adjudged upon said conclusions that the sale which had been had at the instigation of Todd be set aside, and there was a decree in his favor on the cross-complaint.

There can be no question in the circumstances that, as between Todd and his grantee, Todd was a surety. As between them, the amount which he was compelled to pay to relieve himself from his personal liability on the judgment was not a payment, but a debt was thereby created in his favor, for the enforcement of which, upon the equitable principle of subrogation, he was entitled to keep alive the security of his creditor. Josselyn v. Edwards (1877), 57 Ind. 212; Todd v. Oglebay, supra. See, also, Cordova v. Hood (1872), 17 Wall. 1, 21 L.Ed. 587; Waller v. Janney (1893), 102 Ala. 442, 14 So. 876; Simily v. Adams (1901), 88 Mo.App. 621; Koch v. Roth (1894), 150 Ill. 212, 37 N.E. 317; Texas Land, etc., Co. v. Watkins (1896), 12 Tex. Civ. App. 603, 34 S.W. 996. As was, in effect, held upon the prior appeal of this case, when Oglebay, as a purchaser with notice, as was alleged in said answer, redeemed the land from the sheriff's sale, he took the estate impressed with the decree, to the extent that it was unsatisfied.

Although Todd was, in fact, a surety, yet, assuming that his suretyship did not appear in the judgment, he could not avail himself of his relation in such manner as to take out an order of sale upon the judgment by merely taking an assignment of it. It was his duty, in such circumstances, to procure an adjudication of his suretyship; but as against one who, with notice of the facts, was claiming under one of his codefendants, he was at liberty to obtain an adjudication of such matter subsequently, and thereby to secure the right to enforce the decree to the extent of his equitable interest in it. Zimmerman v. Gaumer (1899), 152 Ind. 552, 53 N.E. 829; Todd v. Oglebay, supra; Montgomery v. Vickery (1887), 110 Ind. 211, 11 N.E. 38; note to Nelson v. Webster (1904), 68 L. R. A. 513, 566.

Whether Todd was entitled to the benefit of the decree depends upon whether Oglebay had notice. The court found that the deed from Todd to Eshelman was recorded, and, so far as the main action was concerned, this was within the issues; but the right of Todd to an affirmative judgment on his cross-complaint is denied because it does not, in terms allege that Oglebay purchased with notice of the recital in said instrument or with notice of the fact of suretyship. However, it is alleged in said cross-complaint that Eshelman conveyed the real estate by deed to Oglebay; that by the terms of the contract between Todd and Eshelman the latter assumed and agreed to pay said mortgage, and that such agreement was written in, and was a part of, the deed of conveyance from him to her. Under these allegations we deem it clear that it sufficiently appears from the cross-complaint that Oglebay had notice of the provision in said deed. In Moore v. Bennett (1678), 2 Ch. Cas. 246, it was said: "And so it is in all cases where the purchaser can not make out a title but by a deed, which leads him to another fact, the purchaser shall not be a purchaser without notice of that fact, but shall be presumed to be cognizant thereof; for it is crassa negligentia that he sought not after it." It was held by this court in Wiseman v. Hutchinson (1863), 20 Ind. 40, that a subsequent purchaser was chargeable with notice of a vendor's lien where he might have ascertained that it had been in terms reserved in a deed which constituted a necessary link in his...