Union Trust Co. v. Lessovitz
| Decision Date | 21 May 1930 |
| Docket Number | 22099,22098 |
| Citation | 122 Ohio St. 406,171 N.E. 849 |
| Parties | The Union Trust Co. v. Lessovitz Et Al. Two Cases |
| Court | Ohio Supreme Court |
Court of Appeals - Jurisdiction on appeal - Chancery case - Foreclosure, priority of liens and equitable subrogation - Appeal and error may be prosecuted concurrently, when - Appeal suspends judgment of trial court - Motion to dismiss appeal to be determined before error case decided - Error proceedings lie to Supreme Court from dismissal of appeal - Error case held in abeyance until Supreme Court decides appeal question - Appeal lability must be challenged before trial in Court of Appeals - Election between appeal and error cannot be compelled, while dismissal motion pending - Electing to hear error ease, bars hearing of appeal case - Litigants entitled to trial de novo on appeal.
1. A case which presents the features of foreclosure, priority of liens and equitable subrogation, is a "chancery case" and appealable under the provisions of Section 6 Article IV, of the state Constitution.
2. Where a defeated litigant is doubtful of his right of appeal he may prosecute appeal and error concurrently to the Court of Appeals.
3. Where both appeal and error have been prosecuted to the Court of Appeals, a perfected appeal suspends the judgment of the trial court; and if a motion to dismiss is filed by the appellee it becomes the first duty of the appellate court to determine whether the case is appealable; if the case is one in chancery, the appellate court errs in hearing and determining the error case and in dismissing the appeal, when such motion remains undecided.
4. If the motion to dismiss the appeal is sustained, the appellant has the right to prosecute error to the Supreme Court from the judgment of dismissal; and in the meantime his error case should be held in abeyance and lie upon the appellate docket until the right of appeal be finally determined by the Supreme Court or until the statute of limitations for prosecuting error from the judgment of dismissal has expired.
5. If before trial in the appellate court, the appellee fails to challenge its jurisdiction to hear the appeal by motion to dismiss, or if such motion, having been filed, is withdrawn and if, in either event, the appealed case is thereafter heard, the appellee cannot thereafter challenge the appealability of the case.
6. While the motion to dismiss the appeal is pending and remains undecided, the appellant cannot be compelled to elect whether he will try his case on error or appeal.
7. Where no motion to dismiss has been filed, or if filed has been withdrawn, the Court of Appeals will hear the appealed cause, unless the appellant dismisses his appeal or elects to hear his error proceeding. If the appealability be not challenged by motion to dismiss, or if such motion be overruled and the right of appeal sustained, and the appellant then elects to hear his error case, he cannot thereafter be heard in his appeal case.
8. While the practice of the appellate court requiring appealed cases to he tried upon the transcript of the evidence in the trial court supplemented by such additional oral evidence as the parties may present, is commendable where court and counsel can agree, under the plenary grant of our constitution permitting the parties in chancery cases to be heard de novo on appeal, litigants have the right to submit their evidence to the appellate court under the same legal rules applicable in the trial courts.
These two cases were taken to the Court of Appeals, the first by way of appeal and the second by proceedings in error. After their disposal in the appellate court, as hereinafter stated, in favor of the judgment creditor, W. E. Taylor, the plaintiff in error, the Union Trust Company, instituted error proceedings in this court in both cases, seeking their reversal.
The cases originated in the common pleas court of Cuyahoga county upon a petition asking judgment for $15,600 on a promissory note executed by Morris Lessovitz and others, and in a separate cause of action asking for the foreclosure of certain real estate described in a mortgage given to secure said note. This mortgage was filed for record on October 19, 1927. Various defendants were made parties to the suit. One of them, W. E. Taylor, a judgment creditor, answered denying the allegations of the petition, and by way of cross-petition set forth a certain judgment obtained by him against Lessovitz and others on July 19, 1927, which judgment he claimed to be the first and best lien upon the mortgaged property. In his answer and cross-petition he asked for a marshaling of liens and for the determination of lien priority in favor of his judgment. Thereupon the trust company filed its reply to the cross-petition of Taylor, admitting that Taylor had recovered judgment on July 19, 1927, and denying the remaining allegations of his cross-petition. Amplifying its reply, the trust company alleged, among other things, that Lessovitz and others had applied to it for a loan, secured by first mortgage on the property in controversy, and that on September 12, 1927, the loan was granted to defendants, who thereupon made a joint note for the amount thereof payable to the plaintiff trust company, and that contemporaneously therewith the Lessovitzs and others executed a mortgage upon the property to secure the loan, the mortgage covenanting that the property was free and unincumbered; that, when the application for said loan was made to the trust company, the owners represented that the only incumbrance on the property consisted of a mortgage to the Woodland Bank, filed for record July 5, 1916, in the sum of $3,000, and a second mortgage filed for record July 12, 1926, securing a note for $3,420; this note and mortgage being executed in favor of one Morris Kaplan. The reply further alleges that, when the loan was made by the trust company, it was upon the agreement that the trust company should advance sufficient money out of the proceeds of said loan to satisfy and discharge the two prior mortgages aforesaid on the premises, and that the trust company, by reason of advancing the money to pay them, would have a lien on the property equal to that held by the two said mortgagees. The reply further alleges that on November 8, 1927, it advanced the sum of $2,737.92, in payment and satisfaction of the Woodland Bank mortgage, and the sum of $3,450, in payment and discharge of the Kaplan mortgage, and that these two mortgages here satisfied and discharged on the records on November 14, 1927; that the money advanced for the payment thereof was advanced in reliance upon the mortgagors' representations to the trust company that they were the only incumbrances upon the property, and with the understanding that the trust company would have the first and best security for the loan so made by it. The trust company also alleged that, when the money was advanced by it in discharge of the first and second mortgages, it knew of no other liens upon the property, and believed that it was securing a first and best lien as security for its loan; that it first learned on August 27, 1928, that Taylor claimed to have an interest in the land by reason of his judgment. The reply repeats its prayer for judgment, foreclosure, and equitable relief, and asks that it be subrogated to the preferences theretofore held by the first and second mortgages of the Woodland Bank and Kaplan, and that there be paid to it the sums above referred to as having been advanced by it in satisfaction of the two mortgages held by the Woodland Bank and Kaplan. It was alleged by Taylor in his cross-petition, and conceded by stipulation, that Taylor had a valid judgment lien for $1,591.65, on a judgment rendered July 19, 1927. This judgment lien superseded the mortgage given the trust company and filed for record on October 19, 1927, unless priority is granted to said mortgagee by rea- son of the trust company's right of equitable subrogation to the prior liens of the first and second mortgages given to the Woodland Bank and Kaplan, respectively, both of which were recorded before the Taylor judgment was rendered, but which were canceled after the lien of the judgment attached.
The common pleas court rendered judgment in favor of the trust company for the amount claimed by it, held that it had a valid mortgage lien upon the premises, and ordered their sale. In marshaling priorities, the trial court refused subrogation to the trust company, and adjudged that its mortgage lien was second in priority to that of Taylor's judgment, which the court held to be the first and best lien upon the premises. The liens of the other defendants were adjusted by the decree, but their determination is not important here. From the trial court's judgment denying subrogation, the trust company prosecuted error to the Court of Appeals, and it also perfected its appeal to the appellate court.
On December 3, 1929, while the case was pending in the Court of Appeals, Taylor filed his motion asking that the appeal be dismissed upon the ground that the action was not appealable, and that the court was without jurisdiction to hear the same on appeal. Without disposing of the motion to dismiss the appeal, the appellate court proceeded to hear the case on error, and on December 9, 1929, it affirmed the judgment of the trial court, and upon the same day, and apparently at the same time, dismissed the appeal at the costs of the appellant, to which order the appellant excepted.
On December 5, 1929, four days prior to the dismissal of the appeal, the appellant had filed in the Court of Appeals the deposition of a witness supplementing its testimony offered in the trial court. After the affirmance in the error proceeding and the dismissal of...
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