Ward v. Yarnelle

• Decision Date: 25 February 1910
• Docket Number: No. 21,324.,21,324.
• Citation: 91 N.E. 7,173 Ind. 535
• Parties: WARD et al. v. YARNELLE et al.
• Court: Indiana Supreme Court

173 Ind. 535

91 N.E. 7

WARD et al.

v.YARNELLE et al.

No. 21,324.

Supreme Court of Indiana.

Feb. 25, 1910.

Appeal from Circuit Court, Wabash County; Hiram Brownlee, Special Judge.

Action to enforce a mechanic's lien by William R. Yarnelle against the Dollar Savings Bank & Trust Company and others, in which defendants filed cross-complaints or independent actions to foreclose their liens. From a judgment marshaling the assets and classifying the creditors and fixing their priorities, E. Ellsworth Ward and others appeal. Affirmed in part. Reversed in part.Lewis W. Morgan, McCracken & Eikenbarry, Rheinfrank & Ohlinger, and Alvah Taylor, for appellants. Shively & Switzer, H. N. Hipskind, Will H. Anderson, Elmer E. Slick, Sayre & Hunter, and M. L. Clawson, for appellees.

MYERS, J.

There was a judgment in the court below marshaling the assets of a corporation organized for building purposes, whose sole property consisted of real estate with a theater building situate upon it. The property was ordered sold, and the proceeds directed paid in five classes, indicated as “A” to “E,” both inclusive. Class A consisted of three parties who are appellees herein, who had furnished theatrical scenery, installed an elevator, and furnished the seatings for the theater, under contract by which the title was to remain in them until the property should be paid for. Class B included 14 parties to this appeal, appellees, who had furnished labor or material in the construction of the building, and filed mechanics' liens. Class C consisted of 1 party only, the Dollar Savings Bank & Trust Company, trustee, of Toledo, Ohio, appellant, the holder of a mortgage on the real estate, which was executed after the building was ready for the roof. Class D consisted of 1 party only, First National Bank of Wabash, Ind., appellee herein, holder of a second mortgage upon the property. Class E includes all appellees who were given judgment without declaring any specific lien, and in the order of the foregoing classes payment was directed by the judgment to be made out of the funds to be derived from the sale of the property. This appeal is prosecuted by appellants Ward, Sweatman, the Harris Construction Company, who were in class B, and the Dollar Savings Bank, trustee of class C, against all the other parties to the judgment in the court below, including John H. Dicken, receiver of the property. The main action was begun by Yarnelle, appellee, as a mechanic's lien holder for foreclosure of his lien; to this action he made party defendants the savings bank, The First National Bank, and others. The savings bank and the national bank filed cross-complaints, and all the laborers and materialmen filed cross-complaints, or independent actions to foreclose their liens. The parties designated under class A filed petitions in the main cause in which a receiver had been appointed to be allowed to remove the property put in the building by them. These independent actions were consolidated with the main action,and tried together as one cause, under an agreement that all matters of defense, affirmative or otherwise, counterclaim or set-off, might be given under answers of general denial. The appellants named in the assignments of error are Ward, the Dollar Savings Bank, trustee, Sweatman, and the Harris Construction Company, and all the other parties to the judgment below are named as appellees. The appellants have assigned error separately under that designation of parties, without any other designation of titular parties appellant, or appellee.

We are confronted at the threshold of the case by the motion of Dicken, receiver, to dismiss each of the appeals. He assigns as causes, (a) that the interests of Ward, Sweatman, and the Harris Construction Company are adverse to those of the Dollar Savings Bank, trustee, and that neither of them has been named as appellee in the assignment of error of the savings bank; and (b) that the latter has named no parties to the judgment as either coappellants, or coappellees. The same motion is addressed to the appeal of each of the other titular appellants. So far as the appellants Ward, Sweatman, and the Harris Construction Company are concerned, no notice to the motion has been given. Ward was given priority over the Dollar Savings Bank, as were all the other parties below, of classes A and B and appellees here, but Ward, the Harris Construction Company, and Sweatman each claimed more than they were awarded, so that in both ways they were each adverse in interest to the Dollar Savings Bank, as were its interests adverse to them, and the interest of the savings bank, and the interest of the three other titular appellants was adverse to all the other parties to the judgment. The appeals of Ward and the Dollar Savings Bank were term appeals, and it was not necessary that any action should be taken as to their coparties, or that they should be named either as appellants or appellees. Burns' Ann. St. 1908, § 675; Keiser v. Mills, 162 Ind. 366, 69 N. E. 142;Gunn v. Haworth, 159 Ind. 419, 64 N. E. 911;Small v. Hammes, 156 Ind. 556, 60 N. E. 342;Lowe v. Turpie, 147 Ind. 652, 44 N. E. 25, 47 N. E. 150, 37 L. R. A. 233. By coparties is meant not coparties plaintiff or defendant, but coparties to the judgment. Kaufman v. Preston, 158 Ind. 361, 63 N. E. 570;Hadley v. Hill, 73 Ind. 442;Hildebrand v. Sattley Co., 25 Ind. App. 218, 57 N. E. 594. The appeals of Sweatman and the Harris Company were vacation appeals, and notice was given under section 681, Burns' Ann. St. 1908. Therefore, as to Ward and the savings bank, it was not necessary that they make Sweatman and the Harris Company appellees, because they join in the appeal, and assign errors along with the former, and all the other parties were named appellees. As to Sweatman and the Harris Company, they gave notice to all parties adverse to them, and join all as appellees who do not join in the appeal. The appellants in effect assign errors against each other, and directly against all the appellees. It was not necessary that there be more than one title to the assignment of errors, for under that title all who desired might join in the appeal, and assign errors. Breyfogle et al. v. Stotsenburg, Trustee (1897) 148 Ind. 552, 47 N. E. 1057. The motion to dismiss the appeal is denied.

Appellant savings bank is put in the paradoxical position of insisting upon a reversal of the judgment, while insisting that, as the cestuis que trust were not made parties to the proceedings below, they cannot be bound by the decree. It appears from the evidence that the savings bank is named as trustee for a series of bonds, of which $24,500 are held by another corporation not a party to the suit, and $500 by the appellant Sweatman. It is not claimed that the mortgagee trustee is not a proper party, and the question of a defect of parties was not raised by demurrer or answer. It is sufficient to say that, if the failure to make the bondholders parties results in the decree being ineffective as to them, the trustee could not complain, and as the names of the holders of the bonds did not appear until upon the trial, if the trust company desired the cestuis que trust to be made parties, it should have disclosed their identity, instead of which, it has waged the contest in its own name, and so far as it is concerned is not in a position to raise the question for the first time here. Whether the other parties have or can have anything as against the bondholders without their being made parties, we express no opinion.

It is urged against the trust company that it has no status here by virtue of section 4031, Burns' Ann. St. 1908, owing to the fact of its being a nonresident of the state. That question is also for the first time sought to be raised on this appeal. There was no answer or demurrer to the cross-complaint of the trust company, nor any assignment of error which presents the question. There was jurisdiction of the subject of the action by statute, and the only relief sought by the trust company was the protection of the lien of the mortgage, and to that extent certainly it had a nominal, if not a pecuniary, interest, and a right to be heard, and that right could be asserted under an answer even of general denial. City of Covington v. Ferguson (1906) 167 Ind. 42, 78 N. E. 241. The only errors properly assigned by either of the appellants arise upon their several motions for a new trial. There was a trial and general finding, fixing the priorities of the parties by class as indicated, and the questions for determination arise upon the action of the court below in marshaling the assets among the various lienholders as was done, by the classification herein stated.

The Wabash Eagles' Building Association was the owner of a lot in the city of Wabash, upon which it had begun the erection of a four-story brick theater building. It had progressed with the construction to the point where the structure was about ready for the roof, when on December 15, 1905, it executed a mortgage to the Dollar Savings Bank & Trust Company, trustee, upon the lot and building to secure the payment of 50 bonds of $500 each, “to enable it to pay for improvements now in course of erection, and completion on its real estate, and to further construct, extend, and better its equipment and improvement” upon its real estate described therein, “together with all buildings, improvements, equipment, and appurtenances thereunto belonging or in any wise appertaining thereto” and upon “all its corporate property, grants, rights, and interests owned by or belonging to it, including all its property, real, personal, and mixed, of every kind and nature whatsoever” with a covenant that the property was free from all incumbrances. This mortgage was recorded in Wabash county, December 16, 1905.

The court below determined the case upon three general propositions: First, that where there were those who had placed their property...