Case ID: ohio-cc-dec_15/html/0768-01.html
Source: Caselaw Access Project
Author: {"author": "HAYNES, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MORTGAGES — LIFE ESTATES — COURTS.
    [Wood (6th) Circuit Court,
    April 25, 1903.]
    Parker, Hull and Haynes, JJ.
    Charles W. Sherman et al. v. Hattie May Sherman.
    1. Mortgage on Life Estate Must be Paid From Income and not Principal.
    The value of a mortgage incumbrance upon the interest of a life tenant in real estate can be paid only from the income arising from, and not out of, the principal of the fund created by a sale of the premises in-a proceeding commenced by the life tenant to sell the same and have the proceeds invested under order of the court for the benefit of the parties interested therein.
    2. Costs, Taxes, Attorney and Guardian Ad Litem Fees, how Paid.
    A life tenant in real estate who, for his own benefit, commences a proceeding to sell the premises and invest the proceeds arising therefrom under order ' of the court, as provided by Sec. 5803 Rev. Stat. et seq., must pay the costs of the proceeding and his attorney fee; and, as a tenant for life must pay taxes or forfeit his estate, either he or his mortgagee must pay the taxes on the land; and no part of such costs, fee or taxes (unless the taxes have been paid after forfeiture of the life estate), can be paid from the principal of the fund realized from a sale of the premises; but the fee of the guardian ad litem of a minor defendant may be paid from the fund.
    3. Court May Appoint Trustee to Invest Trust Fund.
    It is within the power of the court, in a proceeding commenced liy a life tenant in real estate to sell the land and invest the proceeds for the benefit of the parties interested therein, to appoint a trustee of the fund so created with power to invest the same under order of the court.
    ERROR to the common pleas court of Lucas county.
    F. J. Chase, for plaintiff in error.
    E. G. McClelland, for defendant in error.
   HAYNES, J.

(Orally.)

In this case a petition in error was filed by the plaintiffs ill error to reverse the judgment of the court of common pleas, the general ground alleged being that the court erred in rendering judgment against the plaintiffs in error, Lester D. Hill and Charles W. Sherman, and in favor of the defendant in error, Hattie May Sherman.

The petition of Charles W. Sherman in the court of common pleas sets forth that his father died, having made a will and had willed to him for life certain real estate, about eighty acres of land, with remainder over to the heirs of his body. He had one child, Hattie May Sherman, the defendant. Sherman had with all reasonable promptitude mortgaged h,is life estate to Lester D. Hill, and Hill comes in by way of answer and cross-petition and sets up his note and mortgage. The plaintiff, in his petition, sets forth that operation of the land under his life estate is not profitable; that the taxes and improvements thereon required are high, so that it yields nothing to him, and can be, in its present condition, of no value to the owner of the remainder; that from the rents it cannot be kept in repair with the -necessary ditches, taxes and improvements, and is therefore depreciating in value, and he prays that the land may he ordered sold, and the proceeds invested under order of the court in accordance with the statute (Sec. 5803 Rev. Stat. et seq.') in such case, and averring that it would be no injury to the person holding the remainder in doing so.

After a hearing, an order was made by the court of common pleas that a sale be made, and the plaintiff was appointed to make the sale, and a sale was made and the money was turned into the court, and is there now. The petition also prayed that the present value of the mortgage given by Sherman be ascertained and the same ordered paid him out of'the fund. The court refused to do that, and thereupon the plaintiff filed his petition in error.

We think the court is perfectly right in doing that; that it was a wise thing to do, and further that we do not find any provision in any statute that would authorize a court of common pleas to make an order of that kind, and so far as we can see, the court would have no authority to do so. The statute provides that the money made by the sale be invested in such and such a form. A sale was made and a certain party was appointed as trustee to take charge of the fund and make the investment. That was under the provision of the statute all right. The court further directs that certain payments be made; that the amount found due the defendant, Hill, upon his note and mortgage set forth in his answer be paid out of the income arising from said fund prior to the payment of any other claim or lien, except the costs of investing the same.

The court has done one thing, which is not alleged as error, but I will call attention to it, for so far as we know there is no law for the order that is made. The court has ordered the appointment of a trustee, that he shall give bond, and then when the bond is given to the clerk of the court “the amount of said fund remaining to which said trustee may be entitled, after retaining the costs of this action including a fee for plaintiff’s attorney, and also a fee for the guardian ad Jit cm heretofore allowed, which costs are taxed at $10.30 and the taxes due on the land amounting to $26.75; and it is hereby further ordered that after the payment of said money due the said L. D. Hill on his note and mortgage, the subsequent income arising from said fund be paid to said plaintiff, Charles W. Sherman, after deducting such costs and expenses as Shall he allowed said trustee,” etc. Now the tenant for life is bound to keep the taxes paid, else he forfeits his life estate, and further we know of no authority for paying the plaintiff’s attorney a fee in this case; nor do we know of any law that the costs of the court be paid out of the fund, or the taxes, unless they should be paid after a forfeiture is made. The fee of the guardian ad litem should be paid out of the fund. The whole thing is carried through here at the expense of this girl, a minor. The plaintiff and Hill, the owner of the mortgage, are not out a cent. The sale is made for the benefit of the plaintiff and upon his petition, and we know of no reason why he should net pay his own attorney and why he should not pay the costs of suit or why the mortgagee should not pay the taxes or the whole amount should be forfeited. I don’t care to have the matter pass by this court without entering our views upon the question.

The judgment of the court of common pleas, so far as the order appointing a trustee to invest the funds and refusing to find the present value of the mortgage and pay it, is affirmed.