130 Ind. 327 | Ind. | 1892
Margaret McGuffey brought the suit out of which this appeal grows to foreclose a mortgage executed by James J. Maddux and others. The appellees came in as intervenors, and filed a cross-complaint. Before the submission of the cause for trial upon the issue joined on the cross-complaint, judgment was rendered on the complaint against
The cross-complaint states these material facts : Amanda J. McClain is the wife of her co-intervenor, Walker H. McClain, and was his wife prior to the 20th day of March, 1883. On that day she was the owner of a certificate of purchase issued to her by a commissioner authorized to sell real estate, and on the same day she assigned the certificate to William Carroll. She and her husband executed to Carroll a mortgage on the property here the subject of controversy, to secure him against loss, there being some doubt as to the validity of the title to the land held under the commissioner’s certificate. Subsequently the intervenors sold the land embraced in the mortgage to the appellant, Margaret McGuffey, by whom it was sold to the mortgagors, Maddux aud others. At the time of the sale to Margaret McGuffey the intervenors placed in her hands promissory notes and accounts to the value of four hundred dollars, to secure her from loss by reason of the indemnifying mortgage executed to Carroll. The notes and accounts were delivered pursuant to a written agreement, wherein the appellant undertook to collect the notes and accounts and to properly apply the avails. The notes and accounts were collected, and the appellant appropriated the proceeds. The indemnifying mortgage executed to Carroll was released and satisfaction entered of record. The appellant, Margaret McGuffey,- and her husband, are not residents of the State of Indiana. The suit against the mortgagors was brought to collect the purchase-money due from the mortgagors to Margaret McGuffey.
The real question in the case is whether the cross-complaint shows a right of action in the appellees. If, as the demurrer confesses, the appellant appropriated the proceeds of the notes and accounts deposited with her as collateral security, Amanda J. McClain is entitled to recover the money so collected and appropriated in some form of action. There can be no doubt that there is a valid claim against the appellant, for she has money in her hands that belongs to Mrs. McClain. The only possible doubt is as to the remedy; there can be none as to the primary right.
The right of the appellee Amanda McClain to the money being clear and undoubted, the nature and origin of the right are only important as affecting the question of the remedy, but upon that question the origin and nature of the right are important considerations. We think the origin and nature of her right are such as to give her an equitable claim upon the proceeds realized upon the mortgage executed to the appellant, Margaret McGuffey. Mrs. McClain
The doctrine of equitable conversion is influential here. The form into which property changes is not material,, for equity will follow the property into whatever form it may assume, in order to secure it for the person entitled -to it, and in this instance it will follow the interest of Mrs. McGuffey in the land in the form it assumed under the mortgage executed to her. The equity of Mrs. McClain is strong, and will prevail against the bald technical objection that she can not have relief in such a suit as this, for the meritorious right she possesses is one equity will not disregard ■ for “ equity delights to do justice, and that not by halves.”
The appellant’s counsel are undoubtedly correct in asserting that a pleading must proceed upon a definite theory, and on that theory state a cause of action or defence. But while we agree to the premise of counsel, we controvert their conclusion. The cross-complaint before us states the facts and outlines a theory, and that theory is, that the intervenor is entitled to reach the interest of the appellant in the land. It
But we are not to be understood as holding that the cross-complaint does not make a case for equitable subrogation; on the contrary, we adjudge that it does make such a case. The courts will give effect to the substantive facts, and assign to them their equitable force. Proctor v. Cole, 104 Ind. 373 (382); Otis v. Gregory, 111 Ind. 504 (512). The force to be assigned to the facts pleaded is that Mrs. McClain was entitled to reach by subrogation the mortgage estate which her debtor and grantee held in the land. The land was the primary security for the unpaid purchase-money, and such security may be made available by the vendor, where to make it available will not injure third persons. The mortgage executed to the grantee represented her interest in the land, and to that interest equity subrogates the appellee Amanda McClain as a vendor who has not received pay for the land sold to the vendee.
The point, made under the specification of error based upon the ruling denying a new trial, that the trial court erred in excluding evidence, we dispose of by saying that, where the exclusion of evidence is not stated as a cause for a new trial, no question is presented on appeal.
The appellant objected to the testimony of Walker McClain concerning an order given for the notes and accounts deposited as collateral security. It is quite clear that part, at least, of the testimony of the witness was competent, and as the objection does not separate the competent from the in
Judgment affirmed.