Case Name: Ideal Savings, Loan & Building Ass'n of Newport v. Campbell County Bank
Court: Kentucky Court of Appeals
Jurisdiction: Kentucky
Decision Date: 1936-06-12
Citations: 264 Ky. 778
Docket Number: 
Parties: Ideal Savings, Loan & Building Ass’n of Newport v. Campbell County Bank.
Judges: 
Reporter: Kentucky Reports
Volume: 264
Pages: 778–780

Head Matter:
Ideal Savings, Loan & Building Ass’n of Newport v. Campbell County Bank.
(Decided June 12, 1936.)
WM TT. WARREN for appellant.
OSCAR K, FORSTER foi appellee.

Opinion:
Opinion op the Coukt by
Judge Stites
Affirming.
This is an appeal from a judgment of the Campbell circuit court sitting in equity. On July 6, 1926, the board of council of the city of Dayton duly accepted a street improvement and passed the necessary ordinance levying a special assessment to pay its cost. The sum of $581.04 was apportioned to the property of one Frank Crimes, and a warrant in this amount was issued to the contractor. On January 20, 1927, Crimes executed a note to the Campbell County _ Bank in the sum of $582, and simultaneously with the execution of the note the bank purchased the apportionment warrant from the contractor and held it as collateral security on the obligation of Crimes. Thereafter various payments were made, and renewal notes were from time to time executed and delivered, until, on December 2, 1933, the obligation had been paid down to the principal sum of $350.
On August 16, 1929, Crimes executed a note and a mortgage on the real estate, already in lien under the apportionment warrant, in the sum of $625, to the appellant, Ideal Savings, Loan & Building Association of Newport, Ky. A second note in the sum of $375 and a third note of like amount were executed and delivered by Crimes to the appellant on November 1, 1929, and January 9, 1930, respectively, and the mortgage of appellant was extended to cover these additional advancements. On February 14, 1934, Crimes died intestate.
This suit was commenced by appellant on April 7, 1934, for the purpose of foreclosing its mortgages on the property. The appellee, Campbell County Bank, was made a party defendant, and filed an answer and cross-petition, in which it asked that its lien in the sum of $350 be enforced prior to that of the appellant. The court adjudged the sale of the property and also that the lien of the appellee was superior to that of the appellant. It is urged by the appellant that the claim of appellee was barred by limitation under section 2515 of the Kentucky Statutes, and this is the only point seriously debated.
It is clear that a plea of the statute of limitations would not be available to Grimes, tbe property owner, against tbe claim of tbe Campbell County Bank, in view of tbe fact that he made regular and repeated payments to tbe bank up to ¡December 2, 1933. Whether tbe bank credited tbe payments made on its note or on tbe apportionment warrant does not seem to us to be material. Tbe warrant certainly was not extinguished by its purchase from tbe contractor. That tbe bank required Grimes to execute a note neither added to nor detracted from its efficacy. Tbe appellant here stands in no better position than its mortgagor. Tbe lien of tbe warrant was in full force when it advanced money to Grimes on tbe security of bis property, and it does not even deny that it bad actual notice (in addition to constructive notice) of tbe existence of appellee's lien when it made its second and third advancements to tbe property owner. Appellant took its mortgages on the property subject to the lien, and tbe effect of sustaining its present contention would be to increase tbe security of its loans by wiping out a charge against tbe property which Grimes himself could not do. Tbe circuit court did not err in sustaining a demurrer to its plea of limitations. No element of an estoppel is present which would justify tbe application of a more favorable rule to appellant than to its grantor. It was in no way injured by tbe payments made on tbe warrant, for each payment thereon increased its own security pro tanto. It advanced no funds on tbe faith of tbe release of appellee's lien. In fine, it was not, as to appellee, a purchaser for value and without notice or entitled to any defense denied its grantor. Sustaining tbe lien of appellee can in no way be prejudicial to appellant's rights.
Judgment affirmed.