Wienke v. Lynch

• Decision Date: 16 July 1980
• Docket Number: No. 2-1078A348,2-1078A348
• Parties: Walter R. WIENKE, Appellant (Plaintiff Below), v. Danny L. LYNCH, Glenda S. Lynch, Husband and Wife, and the Kissell Company, an Ohio Corporation, Appellees (Defendants Below).
• Court: Indiana Appellate Court

Page 280

407 N.E.2d 280

Walter R. WIENKE, Appellant (Plaintiff Below), v. Danny L. LYNCH, Glenda S. Lynch, Husband and Wife, and the Kissell Company, an Ohio Corporation, Appellees (Defendants Below).

No. 2-1078A348.

Court of Appeals of Indiana, Second District.

July 16, 1980.

David P. Murphy, Wolf, Robak & Murphy, Greenfield, for appellant.

James P. Seidensticker, Jr. and David R. Day, Bose & Evans, Indianapolis, for appellees.

SHIELDS, Judge.

Appellant Walter Wienke (Wienke) initiated a quiet title action against Appellees, Danny and Glenda Lynch (Lynches) and The Kissell Company (Kissell). ¹ Motions for summary judgment were filed by all parties. ² The trial court ruled in favor of Lynches upholding their defenses of laches, acquiescence, and res judicata, and entered final judgment quieting title in the Lynches. We affirm.

On appeal Wienke raises the following issues:

(1) Whether a husband's laches and acquiescence can bar his assertion of legal interest in tenancy by entireties property (2) Whether the uncontradicted facts legally constitute the elements of delay and prejudice within the meaning of laches;

(3) Whether failure to take notice of, and act in accordance with the deed records is inequitable conduct; and

(4) Whether a property settlement is res judicata as to the legal interests in tenancy by entireties property.

The facts are undisputed. Walter and Elsie Wienke were married on September 4, 1960. On September 9, 1960, Wienke conveyed property owned by him, 4002 Ridgeview Drive, to himself and Elsie as tenants by the entireties, and Elsie conveyed property owned by her, 2902 Harlan Street (Harlan), to herself and Wienke as tenants by the entireties. The conveyances were made through a straw man and were recorded.

July 17, 1972 Elsie conveyed Harlan to Colonial Discount Corporation (Colonial) by warranty deed and for valuable consideration. Despite Wienke's objections to the sale, he appeared for the closing with Elsie. Colonial informed Wienke his presence was not needed and he waited outside during the closing. Wienke did not sign the deed.

Colonial recorded the deed and made valuable and lasting improvements to Harlan. Wienke was aware of the improvements.

May 24, 1973 Colonial conveyed Harlan by warranty deed and for valuable consideration to the Lynches, who recorded the deed. Kissell took and recorded a mortgage in the property.

From July 1972 until the present either Colonial or the Lynches have paid the property taxes on Harlan. Wienke paid no taxes on Harlan during this period.

May 30, 1975 Wienke instigated dissolution proceedings against Elsie. During the course of the proceedings, Wienke was advised by his attorney that he had a legal interest in Harlan. However, the property agreement executed by Wienke and Elsie, and incorporated into the dissolution decree is silent as to Harlan.

Wienke initiated this quiet title suit on May 12, 1977.

When reviewing a summary judgment, this Court will reverse if the record discloses either an unresolved issue of material fact or an incorrect application of law. Stout v. Tippecanoe County Dept. of Public Welfare, (1979) Ind.App., 395 N.E.2d 444. The facts are not in dispute in this case and Walter does not place into issue any disagreement as to inferences to be drawn from these facts. Therefore, this Court only addresses the appropriateness of the trial court's legal conclusions. Central Realty, Inc. v. Hillman's Equipment, Inc., (1969) 253 Ind. 48, 246 N.E.2d 383.

I

Wienke contends that a conveyance by one tenant of the entireties is void, and that the grantees of a void conveyance cannot assert the defenses of laches and acquiescence against the legal interest of the non-conveying tenant.

We agree with Wienke's contention that the entireties relationship cannot be severed by the unilateral action of one tenant. Husband and wife have no separable interest in entireties property, therefore, a conveyance by one tenant is ineffective to pass legal title. ³ Pension Fund of Disciples of Christ v. Gulley, (1948) 226 Ind. 415, 81 N.E.2d 676; Chandler v. Cheney, (1871) 37 Ind. 391; Sharp v. Baker, (1911) 51 Ind.App. 547, 96 N.E. 627. A finding that the conveyance is ineffective, however, does not lead to the conclusion that the underlying legal interest is immune from equitable defenses of laches and acquiescence. The doctrines of laches and acquiescence are directed at the actions, not the legal interests, of the party against whom they are raised.

Despite the legal interest, inequitable dilatory conduct can bar its assertion. We agree with the trial court's determination that Wienke's legal interest in an ineffective conveyance of tenancy by entireties property is subject to the equitable defenses of laches and acquiescence.

There is support for this position in Indiana case law. In Hutter v. Weiss, (1961) 132 Ind.App. 244, 177 N.E.2d 339, the court held that, while no legal or equitable title had passed to the purchasers at a procedurally defective estate sale, such title could pass to them through estoppel or by reason of the plaintiff's laches.

The case of Harwood v. Masquelette, (1932) 95 Ind.App. 338, 341, 342, 181 N.E. 380, 381, dealt with the effectiveness of a corporate conveyance of real estate prior to state approval of the corporation's articles of incorporation. The court distinguished legal and equitable interests as to an ineffective conveyance of property.

"This contention is in accord with the almost universally accepted rule that a deed to an immediate estate in land, made to a person not in being or a corporation not yet organized or having a valid existence, is a nullity and passes no title to anyone . . . but these decisions refer to the transfer of the legal title, and it is our opinion that they do not affect the equitable rights of the parties growing out of the transaction. White Oak Grove Benevolent Society v. Murray, (1926) 145 Mo. 622, 47 S.W. 501."

II

Wienke next disputes the legal calculation of the period of delay. He contends that the relevant period of delay was the ten (10) months between the date Colonial purchased from Elsie (July 1972) and the date Lynches purchased from Colonial (May 1973). This is the period, according to Wienke, in which Lynches could have been misled by his inaction and, therefore, is the only period of time relevant to the issue of delay. It is his position that a ten (10) month period does not constitute delay within the meaning of laches.

The argument is flawed. Laches, unlike equitable estoppel, does not contain the element of reliance. ⁴ It focuses on the time from when Wienke learned of his legal claim until he finally asserted it, not the period of time in which the Lynches were induced or misled by his conduct.

Wienke's legal claim matured on July 17, 1972 ⁵ when he arrived for, although he did not participate in, the sale of property that he knowingly owned with his wife as tenants by the entireties. He finally raised his claim on May 12, 1977, nearly five years later.

As stated in the case of Haas v. Holder, (1941) 218 Ind. 263, 274, 32 N.E.2d 590, 594:

"There is no absolute rule as to what constitutes laches or staleness of demand, and no one decision constitutes a precedent in the strict sense for another. Each case is to be determined according to its own particular circumstances. In other words, the question of laches is addressed to the sound discretion of the chancellor, and his decision will not be disturbed on appeal unless it is so clearly wrong as to amount to an abuse of discretion. 21 C.J. p. 217; Ryason v. Dunten, (1905) 164 Ind. 85, 96; 73 N.E. 74, 77."

We cannot say as a matter of law that a five year delay does not constitute laches. It is the inequity of the delay resulting in prejudice, more so than the extent of the delay, that is pertinent. We defer to the trial court's apparent satisfaction of the element of delay.

Wienke also disputes a finding of prejudice, contending that the Lynches were not prejudiced by his delayed assertion of title and, further, that the provisions of the Occupying Claimant's Act ⁶ prevent Lynches' prejudice. We disagree.

There is adequate case law that payment of taxes on the property and bearing the burdens and risks of property ownership are sufficient prejudice. Phar-Crest Land Corporation v. Therber, (1969) 251 Ind. 674, 244 N.E.2d 644. As stated in Grantham Realty Corporation v. Bowers, (1939) 215 Ind. 672, 685, 686, 22 N.E.2d 832, 839:

"One having a technical claim on property and who is in possession of all the facts concerning such claim cannot sit idly by and permit another, who believes himself to be the owner of such property, to carry the burden of the property while the owner of the claim by the passage of time makes sure that the property is worth carrying. An owner of a claim so doing is guilty of laches and a court of equity will not then permit him to assert such claim to the injury of the other party. Kroeger v. Kastner, (1937) 212 Ind. 649, 10 N.E.2d 902."

It is without question that the Lynches, and their predecessors in interest, Colonial, have paid the expenses incident to property ownership since 1972, and that Colonial made valuable and lasting improvements on the property. As stated earlier, the question of laches is "addressed to the sound discretion of the trial court reviewable upon appeal only for abuse of that discretion." Citizens National Bank of Grant County v. Harvey, (1976) 167 Ind.App. 582, 594, 339 N.E.2d 604, 611. We find no such abuse.

Wienke's allegation that the provisions of the Occupying Claimants Act prevent Lynches' prejudice is without merit. It is well established that the statute is not the exclusive remedy for persons paying taxes and making improvements under color of title. Phar-Crest Land Corporation, supra, 251 Ind. at 682, 244 N.E.2d at 648.

"We find no law that compels the appellees to follow such a statutory remedy for reimbursement for...