Walner v. Capron

• Decision Date: 17 April 1946
• Docket Number: 28182.
• Citation: 66 N.E.2d 64,224 Ind. 267
• Parties: WALNER et al. v. CAPRON et al.
• Court: Indiana Supreme Court

66 N.E.2d 64

224 Ind. 267

WALNER et al. v. CAPRON et al.

No. 28182.

Supreme Court of Indiana

April 17, 1946

George Cohan, of Gary, Jay E. Darlington, of Hammond, and Walter Myers, Jr., of Indianapolis, for appellants.

Kenneth Call, of Gary, and Riley, Murphy &amp McAtee, of East Chicago, for appellees.

GILKISON Judge.

Appellant's complaint is in two paragraphs. In the first paragraph she avers that she is the equitable fee simple owner of the described real estate, and that the defendants hold a lien on the same, setting forth the facts. The prayer is for a decree determining the amount of the lien--for a right to redeem therefrom within such time and upon such terms as the court may deem just. The second paragraph is a short form action to quiet title to the real estate described.

The defendant, Capron, answered the complaint in three paragraphs, the first being in substance a general denial the second being a denial, and an averment of ownership of the real estate involved; the third avers the facts rather fully and prays judgment for his costs.

The defendant, Capron, also filed his cross-complaint in short from to quiet his title to all the real estate involved.

Plaintiff filed a reply to each paragraph of answer and an answer to the cross-complaint, putting the cause at issue.

The finding and judgment is for the defendant on the complaint and cross-complaint quieting his title in the real estate and adjudging costs against plaintiff.

The essential facts as shown by the evidence are substantially as follows:

On August 24, 1929, the Superior Realty & Building Company, hereinafter called Superior, was the owner of purchase price notes aggregating the principal sum of $32,000 of William E. Graham, secured by a mortgage on one hundred ninety-one lots near Gary, Ind. On said date it pledged said notes and mortgage to Foreman-State National Bank of Chicago as collateral to secure the payment of a note in the principal sum of $4,500 which it owed said bank. Later, the pledged notes and mortgage becoming due and unpaid, Superior sued in Lake Superior Court Room 4 on said notes and to foreclose said mortgage and in due time a decree of foreclosure was rendered thereon. Thereafter, on September 14, 1931, the Sheriff of Lake County offered said real estate for sale pursuant to the foreclosure decree, and Superior bid it in for $4,500, receipting its judgment for the amount of the bid, paying the costs and causing the certificate of sale to be issued to the pledgee bank--it having sent the pledged notes and mortgage to Lake County to be filed with the papers in the foreclosure action, by its agent, who carried the certificate of sale back to the pledgee bank, and thereafter it held the same as a pledge in lieu of the notes and mortgage so surrendered.

Superior's note to the bank was renewed several times after the bank received the certificate of sale as collateral, and Superior paid interest on it from time to time thereafter until March 31, 1934, at which time the balance due thereon was $4,682. The bank continued to hold the certificate of sale as a pledged collateral to secure Superior's note. On October 27, 1936, the bank sold the certificate of sale, agreeable with the pledge agreement, to its agent, Harry Krauspe, for $3,000, crediting said sum, less $12.80 expenses, on Superior's note, and assigning said certificate of purchase to its agent Krauspe, to be held by him for the First National Bank of Chicago--it having become the legal holder of said pledge and of Superior's note, by proper assignments.

On November 2, 1936, said certificate of purchase was surrendered and the Sheriff of Lake County executed a Sheriff's deed for the real estate to Krauspe, for said last named bank, and which deed was duly recorded on November 6, 1936 in Lake County Deed Records.

On August 27, 1937, the defendant, Horace M. Capron, purchased said real estate from the last named bank for $2,500. He caused the title to be examined, paid the balance due, and received and accepted a quitclaim deed for the lots on September 2, 1937.

The appellant, Fannie Rose Walner, having accepted a deed to the real estate involved, and an assignment of all rights in the action from Superior, was substituted as a party plaintiff and cross-defendant on June 27, 1945.

At the outset, appellee contends that no question is presented by the appeal, because the bill of exceptions containing the evidence is not properly in the record, for the reason that it has not been filed with the clerk as required by law and the rules of this court.

Rule 2-1 of this court provides: 'Chapter 76, Acts of 1937, has heretofore been abrogated. All other rules of appellate procedure and practice adopted by statutory enactment and in effect on June 21, 1937, shall continue in full force and effect, except as herein otherwise provided.' (Our italics.)

One of such exceptions is contained in Rule 2-3 as follows: 'Every bill of exceptions tendered prior to the filing of the transcript in the appellate tribunal shall, if correct, be signed by the judge and filed with the clerk, which filing may be evidenced by an order book entry or the clerk's certificate.' (Our italics.)

An examination of the record discloses on page 64 as follows:

'And afterwards, to wit, on the 3rd day of October, 1945, the same being the 9th Judicial day of the September Term, 1945, of the LaPorte Circuit Court, the following further proceedings were had before the Honorable Lee L. Osborn, Judge, to wit:

'The Superior Realty and Building Company, a corporation,

v.

The First National Bank of Chicago

No. 20681

'Comes now the plaintiff herein, and tenders bill of exceptions herein containing the evidence, which is signed and approved and ordered filed, and is in words and figures to-wit:'

Then follows pages 65 to 178, both inclusive, of the record, entitled properly and numbered No. 20681 Bill of Exceptions. Page 178 is the certificate of the trial judge, and ending with the sentence:

'And on this, the 3rd day of October, 1945, the plaintiff tendered this, her bill of exceptions, and prayed that the same might be signed, sealed, and made a part of the record in this cause, all of which is accordingly done this 3rd day of October, 1945.

'Lee L. Osborn,

'Judge, LaPorte Circuit Court.'

On this page as well as on page 65 is stamped:

'Filed In Open Court

'October 3-1945

'Clayton L. Rhoade

'Clerk of LaPorte Circuit Court.'

The certificate of the clerk at the end of the record, among other things, is as follows:

'State of Indiana

'County of LaPorte, ss:

'I, Clayton L. Rhoade, Clerk of the LaPorte Circuit Court, in said state, do hereby certify that the above and foregoing transcript contains true and complete copies of the following: * * *

'Entry showing filing of bill of exceptions, which clerk will embody in the transcript without copying. * * *

'Clayton L. Rhoade

'Clerk LaPorte Circuit Court by Mabel Frens, Deputy.'

It has been held that: 'Filing consists of the delivery of a paper to the proper officer for the purpose of being kept on file by him in the proper place.' Thompson v. State, 1921, 190 Ind. 363, 367, 130 N.E. 412, 413; Goodman v. State, 1929, 201 Ind. 189, 192, 165 N.E. 755; Engleman v. State, 1850, 2 Ind. 91, 52 Am.Dec. 494; Grabowski v. Benzsa, 1923, 80 Ind.App. 214, 218, 140 N.E. 76; 36 C.J.S., File (Filing) p. 755; Hammond Etc. Electric Co. v. Antonia, 1908, 41 Ind.App. 335, 83 N.E. 766; United States v. Lombardo, 241 U.S. 73, 36 S.Ct. 508, 60 L.Ed. 897, 898.

Rule 2-3 was made for the purpose of simplifying the filing of a bill of exceptions. It provides that the filing may be evidenced by an order book entry or by a certificate of the clerk. In the instant case it is shown by the Clerk's stamp, as having been filed with the clerk in open court on the date it was sealed and made a part of the record by the judge. While this may not be the best way to show a filing with the clerk, we believe it is sufficient as it conclusively shows that it was delivered to the clerk for filing and by him filed in open court on the day it was settled and sealed by the judge. In his final certificate the clerk certifies to the 'Entry showing filing of bill of exceptions, which clerk will embody in transcript without copying.' We, therefore, hold that the bill of exceptions is properly in the record.

The error assigned is overruling the motion for new trial. The motion for new trial is that the decision is not sustained by sufficient evidence, and is contrary to law. By this assignment the evidence must be reviewed to ascertain whether there is any evidence to sustain the judgment below.

The notes and mortgage when pledged were personal property. 41 C.J., Mortgages, § 654, 662; 11 C.J., Chattel, § 1, p. 383; 14 C.J.S., Chattel p. 563; Peaslee v. Fletcher's Estate, 60 Vt. 188, 14 A. 1, 6 Am.St.Rep. 103, but they had a potential power to become an equitable interest in real estate. Either would be a proper pledge as collateral surety. 49 C.J., Pledges, §§ 20, 902, 903, n. 48; Wheeler v. St. Paul, etc., Stone Co., 1921, 191 Ind. 75, 82, 132 N.E. 1; Clark v. Chapman, 1921, 215 Mich. 518, 184 N.W. 497. We quote from page 526 of the last cited case : 'Only personal property can be the subject of pledge or bailment, and a pledge is a vadium bailment, or delivery of personal property (which includes substantially every valuable thing of a personal nature) to another, to be held as security for some debt or obligation. A real estate mortgage, before foreclosure, is now ranked as personal property, and recognized as subject to pledge by the owner * * *.'

However such a mortgage has the potentiality, by the legal process of foreclosure, of maturing into a title to the real estate...