Robertson v. Van Cleave

• Decision Date: 11 March 1891
• Citation: 26 N.E. 899,129 Ind. 217
• Parties: Robertson et al. v. Van Cleave et al.
• Court: Indiana Supreme Court

129 Ind. 217

26 N.E. 899

Robertson et al.

v.Van Cleave et al.¹

Supreme Court of Indiana.

March 11, 1891.

Appeal from circuit court, Tippecanoe county; D. P. Vinton, Judge.

Crane & Anderson and Ristine & Ristine, for appellants. James McCabe, for appellees.

ELLIOTT, J.

The appellants allege in their complaint that they are the owners of an undivided interest in the land in controversy, and entitled to partition. James McCabe, one of the appellees, alleges in his counter-claim these facts: The only interest or title of the plaintiffs is founded on a deed executed to them by the sheriff, and based on a sale made on the 24th day of January, 1884. The sale rests upon a judgment which became a lien on the 9th day of January, 1877, on the land in controversy, which was then owned by Mathias Van Cleave. The property was purchased by the plaintiffs Brown and Ristine, as trustees for themselves and their co-plaintiffs, and a certificate was issued to them as trustees. The title of the cross-complaint is founded on a sheriff's sale, made on a decree of foreclosure rendered in his favor against Van Cleave. The decree foreclosed a mortgage executed to the cross-complainant by Van Cleave and his wife on the 1st day of December, 1876. The trustees, Brown and Ristine, were parties to the foreclosure, and it was therein adjudged that McCabe's mortgage was the paramount lien. McCabe's judgment was for $9,316, but he bid in the property for $500. A certificate was duly issued by the sheriff. A deed was demanded at the proper time, and refused. The counterclaim is good. For this conclusion there are at least two valid reasons. Of these in their order. Brown and Ristine were, as the confessed allegations of the counter-claim show, trustees for themselves and all the co-plaintiffs. A decree against trustees usually binds the beneficiaries, and certainly does so in a case such as this case, where the evidence of title clothes the trustees with the apparent legal ownership.It appears that upon the sale on the judgment the evidence of title was taken by the trustees for their own benefit as well as for the benefit of their co-plaintiffs, and as to third parties they were the ostensible legal owners of such an interest as the certificate conveyed. They cannot, as against McCabe, be regarded as holders of a mere naked trust. The cases of Gaylord v. Dodge, 31 Ind. 41;Adams v. La Rose, 75 Ind. 471;McCoy v. Monte, 90 Ind. 441,-are not of controlling influence, for we are in this instance required to give judgment upon a case where the trustees have a beneficial interest, and were the parties to a foreclosure suit affecting the property to which they held the whole of such title or right as existed under the certificate executed by the sheriff. In speaking of such a trustee, it was said in the case of Kerrison v. Stewart, 93 U. S. 155, that “if he has been made such a representative it is well settled that his beneficiaries are not necessary parties to a suit by him against a stranger to enforce the trust, (Shaw v. Railroad Co., 5 Gray, 171; Bifield v. Taylor, 1 Beat. 91; Campbell v. Railroad Co., 1 Woods, 376;Ashton v. Bank, 3 Allen, 220;) or to one by a stranger against him to defeat it in whole or in part, (Rogers v. Rogers, 3 Paige, 379;Wakeman v. Grover, 4 Paige, 34;Winslow v. Railroad Co., 4 Minn. 317, Gil. 230;Campbell v. Watson, 8 Ohio, 500.) In such cases the trustee is in court for and on behalf of the beneficiaries; and they, though not parties, are bound by the judgment, unless impeached for fraud or collusion between him and the adverse party.” The conclusion that, where a trustee who represents the beneficiaries is in court, the decree rendered binds them, in so far as it affects the trust property, is supported by many other decisions. Vetterlein v. Barnes, 124 U. S. 169, 8 Sup. Ct. Rep. 441;Franklinite Co. v. Ames, 12 N. J. Eq. 507;Corcoran v. Canal Co., 94 U. S. 741;Richter v. Jerome, 123 U. S. 233, 8 Sup. Ct. Rep. 106;Coal Co. v. Blatchford, 11 Wall. 172;Van Vechten v. Terry, 2 Johns. Ch. 197;Board v. Railroad Co., 24 Wis. 93;Hays v. Gas Co., 29 Ohio St. 330;Mead v. Mitchell, 5 Abb. Pr. 92;Knapp v. Railroad Co., 20 Wall. 117. Our own court has sanctioned the general doctrine. Rinker v. Bissell, 90 Ind. 375. This general doctrine clearly applies where, as here, there is a purchase at sheriff's sale, and the creditors interested in the purchase constitute some of their own members trustees, and cause the certificate to issue to the persons chosen to represent them. The necessary inference is that the trustees so chosen represent the interests of all in the property purchased, and themselves have a beneficial interest.

We come now to the second reason indicated as supporting our declaration that the counter-claim is good, and that is this: Even if the judgment creditors were not parties to the foreclosure suit through their chosen trustees, the decree was not a nullity, and the appellee McCabe has a right, in a subsequent suit, to secure a decree barring their equity of redemption. If they were proper parties to the foreclosure suit, they were nothing more, for they were certainly not necessary parties. If the theory that they were not parties to the original suit be accepted as the true one, then it must follow that their general equity of redemption can be barred by an independent decree rendered in a subsequent suit. Jefferson v. Coleman, 110 Ind. 515, and authorities cited, p. 517, 11 N. E. Rep. 465 et seq.; Shirk v. Andrews, 92 Ind. 509;Curtis v. Gooding, 99 Ind. 45. As the right of the appellants to a partition depends upon their interest in the land, it was proper to plead title in the appellee by way of counter-claim, so that the entire controversy might be adjudicated in one suit or action; for the policy of our Code, as has been often decided, is to prevent a multiplicity of actions concerning the same real estate. Ulrich v. Drischell, 88 Ind. 354, and cases cited; Howe v. Lewis, 121 Ind. 110, 22 N. E. Rep. 978; Faust v. Baumgartner, 113 Ind. 139, 15 N. E. Rep. 337; Railway Co. v. Allen, 113 Ind. 581, 15 N. E. Rep. 446; Woodworth v. Zimmerman, 92 Ind. 349. It may, perhaps, be well to add that we are not, at this place, speaking of the statutory right of redemption, since that right is essentially different from the equity of redemption. Eiceman v. Finch, 79 Ind. 511. The difference between the right to redeem under the statute and the equity of redemption is an important and influential one. The statutory right does not come into existence until after the sale; nor, it is hardly necessary to suggest, can it be barred by a decree foreclosing a mortgage; but the equity of redemption exists prior to the suit and may be barred by a decree. The evidence given by the parties on the trial may be regarded as establishing the facts which we outline in the synopsis that follows. The judgment on which the land was sold was obtained against Van Cleave, then the owner, on the 2d day of January, 1877, and was for the sum of $116. The judgment on which the land was sold was held by two of the appellants; but at the time of the sale the sheriff had in his hands several executions issued upon judgments against Van Cleave, among them, one in favor of the trustee Brown. The property was bid in by Brown and Ristine, trustees, for $1,137, but a receipt seems to have been given for only $336. It appears, however, that the sum bid was applied upon the several executions in the hands of the sheriff, distributing to each a proportionate share of the avails of the sale. A certificate was issued by the sheriff to Brown and Ristine, as trustees for all of the execution creditors; and on the 15th day of March, 1886, a deed was issued to the holders of the certificate. The mortgage to McCabe, referred to in the counter-claim, was executed to him by Van Cleave and wife on the 1st day of December, 1876. To the suit to foreclose that mortgage Brown and Ristine, trustees, were parties, and the decree adjudges that the mortgage is the paramount lien. Sale was made on the decree on the 4th day of March, 1886, and a certificate issued to McCabe. After the expiration of the year allowed for redemption McCabe demanded a deed, but his demand was met by a refusal. On the 13th day of March, 1886, Brown and Ristine,trustees, filed with the clerk a written statement, in which they asserted that, as shown by the sheriff's certificate, recorded on page 101 of the lis pendens record, and also by the sheriff's return to the decree certified to him, that the real estate, describing it, was sold by the sheriff. They also stated that they desired to redeem the real estate upon the following facts: “That they had a certificate of purchase for said real estate, which is a lien thereon, executed to them by Alexander Harper, sheriff, dated January 24, 1884, recorded on page 94 of the lis pendens record, which said certificate was issued under and pursuant to a sale of the land made by the sheriff under a writ of execution issued to the sheriff under the hand of the clerk and the seal of the court, upon the judgment of Alexander M. Robertson and John M. Perry, as appears from the sheriff's return to said execution, as the same is recorded on page 276 of execution docket number eight.” The statement is signed by Brown and Ristine, as trustees, in “trust for Alexander M. Robertson, John M. Perry, Robert B. Benton, William T. Burton, Charles Ferriman, John S. Brown, Aaron H. Blair, and John S. Brown, surviving partner.” But no specification of the amount of the judgment was made in the statement, nor was it shown what amount was due and unpaid. The certificate of redemption was also read in evidence, from which it appears, among other things, that Brown and Ristine, trustees, paid $540 to the clerk.

In discussing the ruling on the counterclaim we have disposed of some of the questions presented by the ruling upon the motion for a new trial for...