129 Ind. 217 | Ind. | 1891
Lead Opinion
The appellants allege in their complaint that they are the owners of an undivided interest in the land in controversy, and entitled to partition.
James McCabe, one of the appellees, alleges in his counterclaim these facts: The only interest or title of the plaintiffs is founded on a deed executed to them by the sheriff, and
The decree foreclosed a mortgage executed to the cross-complainant by Van Cleave and his wife on the 1st day of December, 1876. The trustees, Brown and Ristine, were parties to the foreclosure suit, and it was therein adjudged that McCabe’s mortgage was the paramount lien. McCabe’s judgment was for nine thousand three hundred and sixteen dollars, but he bid in the property for five hundred dollars. A certificate was duly issued by the sheriff, a deed was demanded at the proper time and refused.
The counter-claim is good. For this conclusion there are at least two valid reasons. Of these in their order. Brown and Ristine were, as the confessed allegations of the counterclaim show, trustees for themselves and all their co-plaintiffs. A decree against trustees usually binds the beneficiaries, and certainly does so in a case such as this, where the evidence of title clothes the trustees with the apparent legal ownership.
It appears that, upon the sale on the judgment, the evidence of title was taken by the trustees for their own benefit as well as for the benefit of their co-plaintiffs, and as to third parties they were the ostensible legal owners of such an interest as the certificate conveyed. They can not, as against McCabe, be regarded as holders of a mere naked trust. The cases of Gaylord v. Dodge, 31 Ind. 41, Adams v. La Rose, 75 Ind. 471, and McCoy v. Monte, 90 Ind. 441, are not of controlling influence, for we are in this instance required to give judgment upon a "case where the trustees have a benefi
In speaking of such a trustee, it was said in the case of Kerrison v. Stewart, 93 U. S. 155, that “ If he has been made such a representative, it is well settled that his beneficiaries are not necessary parties to a suit by him against a stranger to enforce the trust (Shaw v. Norfolk, etc., R. R. Co., 5 Gray, 171 ; Bifield v. Taylor, 1 Beat. 91; Campbell v. R. R. Co., 1 Woods, 376; Ashton v. Atlantia Bank, 3 Allen,. 220), or to one by a stranger against him to defeat it in whole or in part. Rogers v. Rogers, 3 Paige, 379; Wakeman v. Grover, 4 Paige, 34; Winslow v. M & P. R. R. Co., 4 Minn. 317; Campbell v. Watson, 8 Ohio, 500. In such cases, the trustee is In court for and on behalf of the beneficiaries; and they, though not parties, are bound by the judgment, unless it is impeached for fraud or collusion between him and the adverse party.”
The conclusion that, where a trustee who represents the-beneficiaries is in court, the decree rendered binds them, in so far as it affects the trust property, is supported by many other decisions. Vetterlein v. Barnes, 124 U. S. 169; New Jersey, etc., Co. v. Ames, 1 Beasley (N. J.), 507; Corcoran v. Chesapeake, etc., Co., 94 U. S. 741; Richter v. Jerome, 123 U. S. 233; Coal Co. v. Blatchford, 11 Wall. 172; Van Vechten v. Terry, 2 Johns. Ch. 197; Board, etc., v. Mineral Point R. R. Co., 24 Wis. 93; Hays v. Gallion, etc., Co., 29 Ohio St. 330; Mead v. Mitchell, 5 Abbott Pr. R. 92; McElrath v. Pittsburgh, etc., R. R. Co., 68 Pa. St. 37.
Our own court has sanctioned the general doctrine. Rinker v. Bissell, 90 Ind. 375. This general doctrine clearly applies where, as here, there is a purchase at sheriff's sale, and the creditors interested in the purchase constitute some of' their own number trustees, and cause the certificate to issue to the persons chosen to represent them. The necessary in
We come now to the second reason indicated as supporting our declaration that the counter-claim is good, and that is this: Even if the judgment creditors were not parties to the foreclosure suit, through their chosen trustees, still the decree was not a nullity, and the appellee McCabe has a right, in a subsequent suit, to secure a decree barring their equity of redemption. If they were proper parties to the foreclosure suit, they were nothing more, for they were certainly not necessary parties. If the theory that they were not parties to the original suit be accepted as the true one, then it must follow that their general equity of redemption can be barred by an independent decree rendered in a subsequent suit. Jefferson v. Coleman, 110 Ind. 515, and authorities cited, p. 517; Shirk v. Andrews, 92 Ind. 509; Curtis v. Gooding, 99 Ind. 45.
As the right of the appellants to a partition depends upon their interest in the land, it was proper to plead title in the appellee by way of counter-claim, so that the entire controversy might be adjudicated in one suit, or action, for the policy of our code, as has been often decided, is to prevent a multiplicity of actions concerning the same real estate. Ulrich v. Drischell, 88 Ind. 354, and cases cited; Howe v. Lewis, 121 Ind. 110; Faust v. Baumgartner, 113 Ind. 139; Indiana, etc., R. W. Co. v. Allen, 113 Ind. 308 (3 Am. St. Rep. 650); Woodworth v. Zimmerman, 92 Ind. 349. It may, perhaps, be well to add that we are not, at this place, speaking of the statutory right of redemption, since that right is essentially different from the equity of redemption. Eiceman v. Finch, 79 Ind. 511. The difference between the right to redeem under the statute and the equity of redemption is an important and influential one. The statutory right does not come into existence until after the sale, nor, it is hardly necessary to suggest, can it be barred by a decree
The evidence given by the parties on the trial may be regarded as establishing the facts which we outline in the synopsis that follows. The judgment on which the land was sold was obtained against Van Cleave, then the owner,, on the 2d day of January, 1877, and was for the sum of one hundred and sixteen dollars. The judgment on which the land was sold was held by two of the appellants, but, at the time of the sale, the sheriff had in his hands several executions issued upon judgments against Van Cleave, among them one in favor of the trustee Brown. The property was bid in by Brown and Ristine, trustees, for eleven hundred and thirty-seven dollars, but a receipt seems to have been given for only three hundred and thirty-six dollars. It appears, however, that the sum bid was applied upon the several executions in the hands of the sheriff, distributing to each a proportionate share of the avails of the sale. A certificate was issued by the sheriff to Brown and Ristine, as trustees, for all of the execution creditors, and on the 15th day of March, 1886, a deed was issued to the holders of the certificate. The mortgage to McCabe, referred to in the counter-claim, was executed to him by Van Cleave and wife on the 1st day of December, 1876. To the suit to foreclose that mortgage Brown and Ristine, trustees, were parties, and the decree adjudges that the mortgage is the paramount lien. Sale was made on the decree, and a certificate issued to Mc-Cabe on the 14th day of March, 1885. After the expiration of the year allowed for redemption, McCabe demanded a deed, but his demand was met by a refusal. On the 13th day of March, 1886, Brown and Ristine, trustees, filed with the clerk a written statement in which they asserted that, as shown by the sheriff’s certificate, recorded on page 101 of the lis pendens record, and also by the sheriff’s return to the decree certified to him, the real estate, describing it, was sold by the sheriff. They also stated that they desired.
In discussing the ruling on the counter-claim we have disposed of some of the questions presented by the ruling upon the motion for a new trial for cause, and we shall not again discuss them.
We are satisfied that the sheriff’s sale to Brown and Ristine was not invalid, although no money was actually paid to the sheriff by them in their character of purchasers. It is sufficient to make a sheriff’s sale effective, in cases where the judgment creditor is the purchaser, if the amount of the bid is properly credited upon the execution, by'his direction and authority. There is no reason for going through the useless ceremony of handing the money to the sheriff and then receiving it back from him. Burton v. Ferguson, 69 Ind. 486; Clossen v. Whitney, 39 Minn. 50.
It is undoubtedly true that a party who assumes to avail
The verified statement made by the appellants was, so far as the character of the redemptioners is concerned, a substantial compliance with the statute ; it shows that they sought to redeem in the character of the holders of the sheriff’s certificate. Their character was evidenced by the certificate described by them, and it was unnecessary for them to more fully describe the character in which they asked to redeem. The sheriff’s certificate did not, it is true, vest a title in them, but it did evidence a lien. Goss v. Meadors, 78 Ind. 528; Elston v. Piggott, 94 Ind. 14. It is a legal instrument of force, and evidences a right in the holder somewhat higher than the general judgment lien, but, nevertheless, a right resting upon the judgment, and owing its principal strength to the judgment. It can not be possible that the holder of a certificate has neither such a lien nor such an interest as will enable him to redeem. His certificate gives him something more than a naked general judgment lien, for, while it does not vest title in him, it does vest such right as may, upon the happening of a designated legal event, ripen into a title. The sale, when consummated by the execution of a deed, takes up the judgment so that no sale of the same property can again be made upon it by the owner of the judgment on which it was once sold. Horn v. Indianapolis Nat'l Bank, 125 Ind. 381.
If the property can not be again subjected to sale after title has passed, it must be for the reason that the owner of the certificate has a right superior to that of the judgment on which the certificate is based, for it is inconceivable that a
The statement required by the statute, with which the appellants assumed to comply, is more than a mere general assertion that the party seeking to redeem holds a lien. If, therefore, the appellants have a lien only, the statement is insufficient. In such a case as this, as our cases uniformly hold, the owners of the sheriff's certificate did not obtain a title to the land. Felton v. Smith, 84 Ind. 485; Brown v. Cody, 115 Ind. 484 (486); Shirk v. Thomas, 121 Ind. 147 (16 Am. St. R. 381); Bodine v. Moore, 18 N. Y. 347. During the year of redemption the holder of the certificate has “ no claim or right except to be repaid the amount of his bid with the rate of interest prescribed in the statute." Bodine v. Moore, supra; Neff v. Hagaman, 78 Ind. 57; Brown v. Cody, supra. In Neff v. Hagaman, supra, it was said : “ The title of the judgment debtor continues until the year for redemption has expired." The same rule was thus expressed in Hasselman v. Lowe, 70 Ind. 414: “ The sheriff’s certificate of the sale does not convey a title to the land sold, but simply an obligation upon which a title may be obtained after the expiration of a year from the sale, unless the land is redeemed within that time." In Elston v. Castor, 101 Ind. 426, it was said : “ It is settled that the sheriff’s certificate does not convey a legal title to the purchaser.” Other cases assert a like doctrine. Elston v. Piggott, supra; Wilhite v. Hamrick, 92 Ind. 594. These decisions close the question as to the nature of the right of the holder of a sher
We adjudge that the holder of a sheriff’s certificate acquires a lien, and that he has a right to redeem as a lien-holder, but not as an owner. As the owner of a sheriff’s certificate can only redeem in the capacity of a holder of a lien, he must do what the statute requires of a party who asserts a right to redeem as-a lien-holder.
It is difficult to designate the precise character- in which the holder of a sheriff’s certificate may redeem. He can not, as we have seen, redeem as an owner. Nor can he redeem as the holder of a mechanic’s lien, a mortgage lien, or any specific lien of that nature. This is so obvious from the language of section 774, R. S 1881, that discussion is unnecessary ; but if the case did fall within that section, still the redemptioner must do what is required of judgment creditors as nearly as the nature of his lien will admit. We hold that if such a person is entitled to redeem at all it is in the character of a judgment creditor. Either this must be affirmed or it must be affirmed that there is no right to redeem. We have, however, shown that he has a right to redeem, and hence-it must follow that the right is essentially that of a judgment creditor. This conclusion gives just effect to the statute, harmonizes its provisions, and carries into execution the intention of the Legislature. The basis of the lien is the judgment upon which the sale was made, and the certificate is but a step towards perfecting the lien, so that it may, by the failure to redeem, be transformed into a title. The certificate represents no fixed sum of money ; its foundation and vital element is the judgment, and, in order to ascertain what that sum is, the judgment must be so de
The owner of a certificate remains, we repeat, the holder of a lien, and of a lien only. His character is not, under the firmly settled rules established by the cases to which we have referred, transformed into that of an owner until the sale is consummated by the execution of a deed. Stephens v. Illinois, etc., Ins. Co., 43 Ill. 327 (331). The basis of his lien is the judgment, for, without a judgment, his certificate would be absolutely ineffective. In itself it has no power. If, therefore, there is no change of character and no change of lien, it must follow that it is the lien of the judgment that gives the holder of a certificate a right to redeem. The execution of the certificate is at most a strengthening of the judgment lien, and is no more than a step towards its enforcement. It creates no new character nor any new lien. It seems clear, therefore, that the mere exhibition of a sheriff’s certificate, or a simple reference to it, is not sufficient. Nor is the mere statement that the person holding such certificate proposes to redeem sufficient to show a right to make a redemption under the statute. Much more is required.
To hold a reference to a sheriff’s certificate sufficient would be to adjudge that the owner of a certificate may redeem without showing the specific facts required by the statute, and this would practically destroy one of its chief provisions.
In our opinion it is necessary to show — what, indeed, section 772 explicitly requires — the amount and date of the judgment as well as the amount due and unpaid. Requirements such as these are regarded by all of the cases that we have been able to find as matters of importance, for those decisions assert that the failure to make such specification in the verified statement is fatal to the attempted redemption. Eiceman v. Finch, supra; Liggett v. Firestone, supra; Buser
The case of Tinkcom v. Lewis, supra, is strongly in point. In that case the right to redeem was asserted by the holder of a sheriff's certificate, and it was held that he must show, by affidavit, the amount of his claim. It was said by the court, in speaking of the provision of the statute requiring the statement of the amount of the lien, that “ The object of this requirement is to provide the evidence whereby a junior creditor may know the amount necessary to be paid to the senior creditor upon a redemption from him.”
It is evident to our minds that whatever view may betaken of the matter, or whatever section of the redemption statute may be applied to the case, it must be held that the requirements of the statute as to the statement of the amount and date of the lien has not been complied with, and that the attempt of the appellants to redeem was ineffectual.
A question as to the validity of the act of 1881 arises upon the contention-that, as the mortgage of the appellee was executed at a time when the law required redemptioners to pay ten per centum interest, the subsequent reduction of the rate of interest to eight per centum is in violation of the provision of the Constitution forbidding the enactment of any law impairing the obligation of contracts. The mortgage of the appellee undoubtedly constituted a contract, and it is quite clear that the Legislature could not enact any law which impaired its obligation. Helphenstine v. Meredith, 84 Ind. 1; McGlothlin v. Pollard, 81 Ind. 228; Parkham v. Vandeventer, 82 Ind. 544; Lease v. Owen Lodge, 83 Ind. 498. But this principle does not settle the question which confronts us here, for the question here is whether the right to redeem is part of the contract or is matter affecting the remedy only. It may well be conceded that an estate in land can not be enlarged or decreased to the injury of a
In Scobey v. Gibson, 17 Ind. 572, it was held, by a divided court, that the redemption law of 1861 was, in so far as it applied to contracts made before its enactment, in conflict with the Federal Constitution. The decision was placed entirely upon that ground, and if that ground has fallen away the decision must go down, so that our inquiry must be whether the foundation has been taken from under that decision. This has been done in the case of Davis v. Rupe, 114 Ind. 588, for that case, in effect, overrules the earlier.
It is, however, to be said of the decision in Davis v. Rupe, supra, that it leaves open the question as to whether, as against a mortgagee, the right of redemption can be materially changed by a statute enacted subsequent to the execution of the mortgage.
The case of Travellers Ins. Co. v. Brouse, 83 Ind. 62, is discriminated from the case where no mortgage rights were involved, but the line of reasoning pursued leads to the conclusion that even as against a mortgagee a change may be made in a statute providing for the redemption of land sold upon a decree of foreclosure. The question, as it is here presented has, however, been expressly decided by the Supreme Court of the United States. In the case of Connecticut, etc., Ins. Co. Cushman, 108 U. S. 51, it was held that a statute reducing the rate of interest from 10 per cent, to 8 per cent, was not in conflict with the Constitution. We feel bound to follow the decision of that court, since with it rests the ultimate decision of such questions as the one before us. It is proper to say
Our ultimate conclusion upon this point is that the trial court correctly held that the sum paid to the clerk by the appellant was sufficient. But as our conclusion is against the appellants upon the question of the efficacy of their attempt to redeem, we must adjudge that the finding of the trial court is right, and that the motion for a new trial, for cause, was properly denied.
There remains for consideration the question presented by the ruling denying the appellants’ motion for a new trial as of right. The counter-claim of the appellee presented for ■ decision the question of title to the land in dispute. The theory on which his pleading proceeds, and on which he obtained a decree, is that he had a fee simple title. To that theory he must be held. The appellants were held to it in the trial court, for the issue tendered was adjudicated against them. It is provided in the decree, among other things, that “ It is ordered, adjudged, and decreed, that said title in fee simple of said James McCabe be and the same is hereby quieted against all claims and rights of the plaintiff in and to the same.” This is an adjudication that McCabe is possessed of the highest title known to the law, and it is moreover the title he asserted in his counter-claim. It is impossible, under our decisions, to avoid the conclusion that the court erred in overruling the motion for a new trial as of right. Kreitline v. Franz, 106 Ind. 359; Gullett v. Miller, 106 Ind. 75 (78); Hammann v. Mink, 99 Ind. 279; Physio-
Judgment reversed, with instructions to sustain the appellants’ motion for a new trial as of right.
Rehearing
On Petition for a Rehearing.
The appellants ask for a rehearing and for a modification of the opinion in so far as relates to the sufficiency of the application to redeem from the McCabe sale. In the original opinion it is held that the application to redeem is made in the character of lien-holder, and that the sufficiency of the application must be determined by section 772,R. S. 1881.
The application in this case was by the holder of a sheriff’s certificate, and more than two years after the expiration of the year allowed for redemption from the sale. The appellants insist that after the expiration of the year for redemption they were no longer mere judgment creditors or lien-holders, but had by such lapse of time become the equitable owners of the land, and as such entitled to redeem under section 768, R. S. 1881. Although the time for the redemption of the land from the sale had long expired, it does not appear that there had been any demand for a deed.
Appellants’ position is that this was not necessary to entitle them to redeem under that section, but that their rights as lien-holders terminated with the expiration of the year, and then enlarged and ripened into “ an equitable estate in the lands.” They say, that “ One who has such rights and interest in lands that he has the legal right to call for a deed, is the equitable owner of such lands.”
The appellants are right in asserting that with the expiration of the year allowed for redemption the holder of a sheriff’s certificate for land sold on execution or decretal order does acquire an equitable estate in the property. Ketchum v. Schicketanz, 73 Ind. 137.
The appellants were the owners of an equitable estate in the land in controversy, but, to entitle them to redeem under section 768, they were required to hold either a legal or an equitable title.
An estate in land is the degree, quantity, nature or extent of interest which a person has in it. Bouvier Law Dict.; Co. Litt., section 347 ; 2 Bl. Com. 103; 2 Crabb Real Prop., part 2, section 942; Preston Est. 20; Black Law Dict.; 1 Washb. Real Prop., marg. p. 45, et seq.
His title to it is the evidence of his right or of the extent of his interest; the means whereby the owner is enabled to assert or maintain his possession ; the right of the owner, considered with reference either to the manner in which it has been acquired, or its capacity of being effectually transferred. Black Law Diet.; Rap. & Law. Diet.; Co. Litt.. 345 ; 2 Bl. Com. 195.
The distinction between the two is discussed and plainly shown in the first eight sections of chapter 3,1 Washb. Real Prop.
Unless, therefore, the appellants had, in addition to their equitable interest, or estate in the land, a title, they could not redeem under section 768.
Had they title ? If so, when and how was it acquired ?' Not by the sheriff’s sale, or by the sheriff’s certificate. In Hasselman v. Lowe, 70 Ind. 414, cited in the original opinion, it is said: “ The sheriff’s certificate of sale does not convey a title to the land sold, but simply an obligation upon which a title may be obtained, after the expiration of a year from the sale, unless the land is redeemed within that time.”
In Taggart v. McKinsey, 85 Ind. 392, it was held that after the expiration of the year allowed for redemption, notwithstanding the right to redeem no longer exists, and the holder of the certificate has a right to demand and receive a deed, he may allow redemption from the sale. The court says: “ The appellant had the right to accept such redemption money, if he chose so to do, after the expiration of one year from the date of the sheriff’s sale ; and if he did so, as-alleged, the redemption would be as full and complete, and have the same consequences, if the sheriff’s deed had not been executed, as if the redemption had been made within the year allowed by law therefor. The certificate of sale-would be thereby annulled, and the sheriff’s deed, subsequently executed on such certificate, would be void and of no effect.” Page 395.
This could Dot be true if the title passed when the year for redemption expired. The effect of redemption is not to transfer title, but to prevent its passing. As long- as redemption is possible the title remains in the judgment debtor, and redemption simply leaves it there. If the title actually passed to the holder of the certificate, with the expiration of the year for redemption, it could only be divested by a conveyance.
In our opinion, the title not only remains in the judgment debtor until the right of redemption is lost, but until the power to redeem no longer exists. The power to redeem only ends when the holder of the certificate demands-a deed.
The holder of a sheriff’s certificate, who has taken no steps to obtain a deed, is no more than a lien-holder, regardless of the time which has elapsed since the sale. The expiration of the year allowed for redemption enlarges his rights, in this: That to his lien on the land is added an
If he exercises his right,'and demands and receives from the sheriff a deed, he thereby acquires a legal title. If, being entitled to a deed, his demand is refused., still, by virtue of his demand, he becomes the owner of an equitable title. This, because equity will regard as done that which should be done, and if he had a valid right to a deed, and has taken the necessary steps, and made a proper demand, equity will treat as actually made the deed which should have been made. Viewing him as the holder of an equitable title, it will lend its aid in the enforcement of his rights, and will even quiet his title. Stout v. Duncan, 87 Ind. 383.
He would have no standing, however, in a suit to recover the land, or quiet his title, if he had taken no steps to obtain a sheriff’s deed.
When the appellants attempted to redeem, they had the right to redeem in either character, and under either section of the statute. .As holders of the sheriff’s certificate, they were entitled to redeem as lien-holders. If, however, they wished to redeem as holders of a title, they could do so by first demanding of the sheriff a deed on their certificate. If he complied with their request, and executed the deed, they could redeem as the holders of a legal title. If he refused, they could show that fact, and redeem as holders of an equitable title. Having elected to redeem as lien-holders, they could only do so by complying with the requirements of section 772 supra. This they did not do.
Petition for rehearing overruled.
Dissenting Opinion
Dissenting Opinion.
I do not concur in the theory that both the legal and equitable title continues in the judgment debtor after the expiration of the year for redemption, and until the deed is issued or a demand made for a deed. I believe when the year for redemption expires the equitable title vests in the owner of the certificate of purchase, and after that time, and before deed issues, he has a right to redeem as an equitable owner. I do not think the authorities cited in the opinion overruling the petition for rehearing support the conclusion reached. The case of Taggart v. McKinsey, 85 Ind. 392, is not antagonistic to my views. If the holder of the certificate permitted a redemption after the expiration of the year and before deed issued, and accepted the money, it would divest him of his equitable title, or at least estop him from taking out a deed and recovering the real estate, and no re-conveyance would be necessary. The case of Neff v. Hagaman, 78 Ind. 57, is not in conflict with my views. I admit that during the year for redemption title does not pass. While it remains but a lien, and the judgment debtor is the owner, he has the right to redeem, but at the expiration of the year it becomes more than a lien — the holder of the certificate becomes the equitable owner, and the judgment debtor has no right to redeem. The legal title passes when the ■deed is executed.
In my opinion a rehearing ought to be granted.
