Webb v. The John Hancock Mutual Life Insurance Co.

• Decision Date: 03 February 1904
• Docket Number: 20,112
• Citation: 69 N.E. 1006,162 Ind. 616
• Parties: Webb et al. v. The John Hancock Mutual Life Insurance Company et al
• Court: Indiana Supreme Court

69 N.E. 1006

162 Ind. 616

Webb et al. v. The John Hancock Mutual Life Insurance Company et al

No. 20,112

Supreme Court of Indiana

February 3, 1904

Rehearing Denied May 12, 1904.

From Marion Circuit Court (10,699); H. C. Allen, Judge.

Action by the John Hancock Mutual Life Insurance Company against Benjamin L. Webb, Sallie M. Webb, his wife, the State Bank of Indiana, and others. From a judgment for plaintiff, and for defendant State Bank of Indiana on its cross-complaint Benjamin L. Webb and wife appeal. Appealed from the Appellate Court, under subdivision 3, § 1337j Burns 1901.

Reversed as to plaintiff, and affirmed as to cross-complainant.

W. N Harding, A. R. Hovey, C. S. Wiltsie and L. C. Walker, for appellants.

E. B. Raub, U. J. Hammond and L. J. Hackney, for appellees.

Jordan, J. Gillett, J., Concurs in the result.

OPINION

Jordan, J.

The John Hancock Mutual Life Insurance Company, one of the appellees in this appeal, instituted this action as plaintiff in the Marion Circuit Court against Benjamin L. Webb and Sallie M. Webb, his wife, and other defendants therein named. The complaint is in two paragraphs. By the first the plaintiff seeks to recover a personal judgment against said Benjamin L. Webb on a principal promissory note executed by him on September 29, 1896, for the sum of $ 4,000, and also to recover on five coupon interest notes executed by him concurrently with the principal note. The plaintiff further seeks, under this paragraph, to foreclose a certain mortgage against all of the defendants to the action. This mortgage was executed by Webb and wife on certain real estate situated in the city of Indianapolis, Marion county, Indiana, to secure the payments of the notes set up and described in said paragraph. By the second paragraph of the complaint appellee seeks to recover a personal judgment against said Benjamin L. Webb on certain other promissory notes executed by him to said appellee company on the 11th day of January, 1898, and to foreclose a second mortgage of even date executed by him and his wife on the same real estate to secure the payments of the notes set up in the said paragraph. The State Bank of Indiana, a defendant in said action, and one of the appellees herein, filed its cross-complaint, seeking thereby to recover a personal judgment against Benjamin L. Webb and one William H. Schmidt upon a promissory note executed by them to the bank on the 6th day of October, 1900, for $ 928.22, and to foreclose a mortgage executed alone by Benjamin L. Webb on the same day upon the real estate in controversy to secure the payment of the note set out and described in this paragraph of the complaint. Appellant Benjamin L. Webb answered the complaint of the insurance company by a general denial. Sallie M. Webb, his wife, filed her separate answer to the first paragraph of the complaint alleging and showing therein, among other things, that on the 23d day of September, 1896, she was the wife of her codefendant Benjamin L. Webb, and had been for many years prior thereto; that on said day she and her said husband were the owners as tenants by entireties of the real estate described in the first paragraph of the complaint, and had been such owners for several years prior to that date; that on said date she and her husband united in a deed of conveyance for the real estate in question to one John M. Wall, trustee, without any consideration whatever, with direction to him in the said conveyance that he should reconvey the real estate to her husband, which he did on that day; that no consideration of any kind passed between the said parties on account of the said conveyances; that there was no sale of said real estate, and that the conveyances were made for the purpose hereinafter stated; that said conveyances were placed on record on said day in the recorder's office of Marion county, Indiana, that being the county in which said real estate was situated; that before the aforesaid conveyances were made said Benjamin L. Webb alone had applied to the plaintiff for a loan of money from it to him, which was to be secured by a mortgage on said real estate; that the said conveyances were made to place the title in said Benjamin L. Webb in order that he might complete said loan, and mortgage said real estate to secure the note in suit, and for no other purpose.

It is further alleged and shown that the note sued on in the first paragraph of the complaint was executed to the plaintiff to secure a loan made personally to the husband for the amount of money named in the note, and that no part of said money was for the use or benefit of the said defendant Sallie M. Webb, nor was any part of it to be used for the benefit of the real estate mortgaged, or for any other real estate in which said defendant had any interest, and that no part of said money arising out of said loan to her said husband was ever used for her personal benefit, or for the betterment of any estate in which she had any interest, but that all of said money was borrowed for the personal use of her said husband alone, and was so used by him in his business, and for the payment of his personal debts.

It is further alleged that the plaintiff, at the time it received the application for said loan of money, and before the execution and acceptance of the mortgage to secure the same, knew the condition of the title to said realty, that the same had long been held by this defendant and her said husband as tenants by entireties, and that the same was, without any consideration, transferred through a trustee to said Benjamin L. Webb but a few days before said mortgage was executed; that the plaintiff knew "that this defendant was a married woman, and, on proper inquiry might have known, and did know, that said debts so secured by said mortgage were alone the debts of her husband, and that no part was for her benefit or for the benefit of any of her property, and that said device was adopted for the purpose of evading the statute of the State which prevents a married woman from becoming the surety of her husband or any other person." She further alleged that she had made no statements in writing or otherwise to anyone as to said loan. The paragraph closes with the averment that the mortgage in suit ought not to be foreclosed on said real estate, etc.

The second paragraph of the answer which was addressed to the second paragraph of the complaint set out and disclosed substantially the same facts as did the first paragraph, so far as they were material to the mortgage therein sought to be foreclosed.

To this separate answer of the wife, Sallie M. Webb, appellee insurance company replied by a general denial. Appellant Benjamin L. Webb answered the cross-complaint of the State Bank of Indiana by a general denial. His wife also filed her separate answer to this cross-complaint, whereby she alleged facts in regard to the title of the real estate mortgaged, and her being a surety for her husband, substantially as alleged in her answer to the complaint of the insurance company. To this answer of the wife the cross-complainant replied by a general denial. Upon the issues joined between the parties by the pleadings herein mentioned, the court upon request at the trial made a special finding of facts, and stated its conclusions of law thereon adversely to appellants, upon the question of the foreclosure of the mortgages herein in controversy.

The special finding of facts made by the court and the conclusions of law of which the appellants complain are as follows:

(1) That on the 6th day of January, A. D. 1894, and prior thereto, said Benjamin L. Webb and Sallie M. Webb were husband and wife, and have ever since been, and are still, such; that on the 6th day of January, 1894, the defendant Benjamin L. Webb purchased the real estate described in the complaint of one William N. Harding, and caused the same to be conveyed to said Benjamin L. Webb and Sallie M. Webb, as husband and wife; that the full consideration therefor was paid by Benjamin L. Webb, who at that time was not indebted, and was worth over $ 50,000 in money and property. And they so held said property until the 23d day of September, 1896.

(2) That on the 23d day of September, A. D. 1896, the said Webb, with his wife, joined in a deed conveying said real estate, to wit, lot No. 31 in William H. Morrison's first addition to the city of Indianapolis, Marion county, Indiana, to John M. Wall, as trustee, for the use and benefit of said Benjamin L. Webb. The consideration for conveyance was stated therein to be $ 1, but no sum was in fact paid in money or property. It was expressly provided in said conveyance that said real estate should be reconveyed by said John M. Wall to said Benjamin L. Webb upon demand by said Webb for such conveyance; that said Wall immediately on said date executed a deed of conveyance of said real estate to said Webb in pursuance of the provisions of said first-named deed, the consideration therein stated being $ 1, but in fact no sum was paid in money or property; that both of said deeds were entered for record in the recorder's office of Marion county on said date; that said conveyances were made and procured by the said Webb and wife to enable the former to make a loan on said real estate thereafter as he might find opportunity, and to secure the same by mortgage on said property. And said Webb and wife agreed between themselves that, after executing said mortgage or mortgages as said Webb might desire, the said property should again be conveyed to said Benjamin L. Webb and wife, as it was formerly held.

(3) That on the 26th day of September, A. D. 1896, the said Webb made a written application to the plaintiff for a loan of $ 4,000, to be secured by mortgage on...