Case Name: Brown v. Kuhn et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1884-01
Citations: 40 Ohio St. 468
Docket Number: 
Parties: Brown v. Kuhn et al.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 40
Pages: 468–492

Head Matter:
Brown v. Kuhn et al.
1. Where the petition in a civil action makes a case for equitable relief only, and the issues actually submitted to and determined by the • court were such that neither party was of right entitled to a jury, an appeal carried up all the issues so tried and determined, although as between some of the defendants there were other issues made by cross-petition, answer and reply, upon which a jury trial might have been of right demanded.
2. Where a cross-petition in error is properly filed against a party already in court, in the pending case on error, no summons in error should be issued for such defendant. ,
3. Where a defendant to a petition in error and to cross-petitions in error dies, and the Case is duly revived on application of the plaintiff in error against the administrator and heirs of the defendant, it is unnecessary to apply for or make any order of revivor as to the cross-petitions.
4. An elder equity must yield to a younger if the holder of the former has so acted as to raise an estoppel in favor of the latter.
5.. Land incumbered by liens was sold in an equitable action, to which the ■ owner’s widow was a party. One lien only, if valid as against said land, was paramount to her dower. The trial court denied dower, because its judgment awarded such validity to said lien._ The issues as to the liens wére appealed, but the widow gave no bond.
Held ; The appeal carried up the question as to her dower.
Error to the District Court of Butler County.
About December 1st, 1870, George F. Elliott, a distiller, doing business in Butler county, Ohio, failed. His debt to the United States was about $80,000. His brother William A. Elliott and Louis Sohngen were his sureties on the bond held by the government. George assigned his property to William for the benefit of his creditors. By permission of the Commissioner of Internal Revenue, William operated the distillery at his own expense during part of the year 1871, and although he lost money in the venture he paid $8,000 on the said bond debt. Sohngen furnished to William malt to a considerable amount during 1871, and William paid him in full therefor. Late in 1871 the distillery was sold and the proceeds, $12,000, paid on said debt. The United States, on January 11th, 1872, recovered a judgment on said bond against George F. Elliott, William A. Elliott and Louis Sohngen for $15,831.66 and costs. The government consented to cancel $6,000 of this judgment.
On June 11th, 1872, William A. Elliott made and delivered to Sohngen-three promissory notes, payable to the order of Sohngen — one for $5,000 in two years after date, one for $5,000 in three years after date, and one for $2,000 in four years after date, all payable at the First National Bank of Hamilton, with interest at eight per cent, per annum from date, payable annually. On the same day William and his wife duly executed, acknowledged and delivered to Sohngen a mortgage to secure said notes, conditioned in the usual form, which was duly entered for record in the county recorder’s office and recorded on June 28th, 1872. This mortgage conveyed two tracts of land in said county, one containing about 320 acres and the other about 130 acres. Sohngen made his own notes as follows— (all dated June 25th, 1872,) one for $10,600, payable in three years, and three for $848 each, payable respectively in one, two and i^iree years from date. Through a broker, he induced one Clawson to discount these (Sohngen) notes, pledging the Elliott notes (indorsed by Sohngen) and the mortgage as collateral security. Sohngen handed the proceeds of this discount ($9,605.49) to William A. Elliott, who paid it to the United States on said judgment. In July, 1872, $1,164.77, due from, the United States to George F. Elliott, upon another matter, was paid to his assignee and by him applied upon the judgment. This completed its satisfaction.
On April 19th, 1873, William A. Elliott and wife, by deed with covenants of general warranty and against incumbrances, conveyed to Louis Sohngen, his heirs and assigns, the 130 acre tract that was included in the mortgage of June 11th, 1872. This deed wras duly entered for record April 23d, 1873, and recorded June 24th, 1878. The consideration was $14,000. An agreement, dated April 12th, 1873, stated how this was to be paid, to wit:
To Joseph Curtis, for Elliott’s use, . . $2,000 00
To Owens & Beckett, for his use, . . . 750 00
To Schultz, for his use, .... 1,000 00
To Second National Bank, Hamilton, Ohio, for his use, . . . ■ . . . 1,100 00
To interest on $10,000 mortgage held by man in Cincinnati,...... 850 00
Amount due Sohngen, for malt, . . . • 2,000 00
Amount paid Wm. A. Elliott, . . . 2,400 00
Amount cash to William A. Elliott, to pay on principal of $10,000 mortgage held by my man in Cincinnati, .... 2,000 00
To pay amount raised on Sohngen’s indorsement
to pay Government tax, . . . 1,900 00
$14,000 00
On August 26th, 1875, Sohngen duly made and delivered his mortgage to William E. Brown, securing two notes, one payable April 1st, 1876, for $11,389.70, €tnd the other on April 1st, 1877, for $2,937.37, to order of said Brown, with interest from date. Said mortgage covered the aforesaid 130 acre tract, and was entered for record on October 18th, 1875, and recorded. Brown transferred, by indorsement, to the Second National Bank of Hamilton, Ohio, the note for $2,937.37. On the 6th day of February, 1878, Conrad Windisch recovered a judgment in the court of. common pleas of Butler county, against Louis Sohngen, for the sum of $16,815 and costs, and said judgment became a lien upon Sohngen’s land in Butler county, from January 7th, 1878. On January 17th, 1878, Sohngen made an assignment of his property to Luke Bradley, Joseph Curtis and Christian Moerlein, for the benefit of his creditors. On the 4th day of February, 1878, said assignees began a civil action in Butler common pleas against Sohngen, his wife, Brown,-the bank and others claiming liens, and prayed that the premises covered by mortgage and other liens- might be sold, the rights of claimants adjudicated, &c. William A. Elliott was not a party to this action.
The note for $10,600, discounted for Sohngen by Clawson, became due May 1st, 1875. To meet it Sohngen made two notes for $5,000 each, payable to his own order in one and two years respectively, from May 7th, 1876, and through the same broker who acted for him in 1872, got Samuel Kuhn to discount them; Kuhn taking the collaterals theretofore held by Clawson (the W. A. Elliott notes and mortgage) and Clawson receiving payment in full of the Sohngen note held by him. When the note due May 7-10, 1876, matured, Kuhn accepted a six months note for same amount, in renewal thereof, retaining the same collaterals.
On May 10th, 1877, Sohngen took up both of the $5,000 notes held by Kuhn, and gave in their stead one $10,000 note, payable in six months after date, Kuhn retaining the Elliott mortgage and notes as collateral.
On July 2d, 1878, Kuhn began a civil action in Butler common pleas, on the Elliott notes and mortgage, against William A. Elliott, his wife, William E. Brown, Sohngen’s assignees, and others. The petition contained four causes of action — one upon each note, and a fourth on the mortgage, asking for a decree of foreclosure and sale, and “for other and all proper and equitable relief in the premises.” Elliott, on March 1st, 1879, filed an answer. His first defence was a legal one to the $2,000 note. The second and third were in the nature of cross-petitions for equitable relief, averring that the debt was Sohngen’s, and claiming that the other two notes ought to be first paid out of the proceeds of the 130 acre tract.
The action by Sohngen’s assignee wras No. 11190. That of Ifuhny. JElliott et al. was No. 11483. In No.’ 11190 the 130 acre tract, was sold on August 2d, 1879, for $9,100. Afterwards, by consent of parties, the two actions were consolidated, and on September 26th, 1879, Elliott filed in the consolidated case an amendment to his answer in No. 11483. This amendment charged that Kuhn took the notes after they were all due, and in addition to. the relief prayed for in original cross-petition, asked that the notes and mortgage be delivered up and cancelled.
Kuhn, by reply to Elliott’s answers and cross-petition, denied substantially all their material allegations, and prayed as in his petition. Sohngen’s assignees by answer to Elliott’s cross-petition averred that he was, by contract with Sohngen, liable for the whole of George’s debt, and denied the facts set out by William. ' Brown and the Bank by proper pleadings denied the facts averred- by Elliott as giving him a right to relief as against them; claimed to be purchasers in good faith for value without notice, and that Elliott’s covenants’of warranty and against incumbrances estopped him from setting up any claim that the mortgage held by Kuhn should be first paid out of the proceeds of the 130 acre tract. Windisch also claimed to be a lien holder entitled to payment out of the 130 acres. All three prayed that Kuhn, if his mortgage debt should be beld a valid and subsisting lien, should first exhaust the 320 acre tract. Elliott filed replies in the consolidated case to the answers of Brown, of the Bank and of Windisch, Mrs. Sohngen claimed dower in the 130 acre tract, assented to a sale free from dower, and asked for dower out of the proceeds. The consolidated case was submitted to the common pleas as is shown by the following extract from the journal entry:
“The above entitled causes, having been by consent of parties heretofore consolidated, and there being now in the hands of Luke Bradley, Joseph Curtis and Christian Moerlein, assignees of Louis Sohngen, funds in cash and notes arising from the sale of the one hundred and thirty acre tract of land, known and described as the ‘ Elliott Farm,’ by said assignees sold under, an order to them issued in said case No. 11,190, and of rents of said farm by them collected, as follows, to wit: — Amount derived from sales of farm, $9,100; add interest on $6,066.66 from August 2d, 1879, till now, $151.50. Amount derived from rents collected, $894.66; and making the aggregate of said fund $10,146.16, the sale of said land having been heretofore confirmed. These causes were by consent of parties submitted to the court upon issues joined in their pleadings between the several parties for determination, finding and decree, as to the rights of the respective parties in said fund, and for an order and decree of distribution thereof.”
The court found that as between Sohngen and Elliott the notes and mortgage were paid, but that Sohngen and those claiming under him were estopped from so claiming; that Kuhn took them after the notes were due and could not enforce the mortgage against Elliott’s land; that as against Sohngen and his assigns Kuhn held the first lien upon the 180 acres and Brown the next; that Mrs. Sohngen has no dower as against the Kuhn mortgage. A decree was made distributing the fund in conformity with said finding.
Kuhn, Brown, the Bank, and Windiseh appealed to the district court, giving bonds as directed by the decree. Elliott filed in the district court a motion to dismiss the appeal “ so far as affects the claim of Samuel Kuhn upon his note or to a personal judgment.” That court did not pass upon his motion. It heard the case and made a finding (besides other matters) that as between Elliott and Sohngen the mortgage notes were all paid; that when Kuhn took the notes, one of them was due; that Sohngen and those claiming under him were estopped from claiming as against Kuhn that the mortgage debt had been paid, and decreed that Kuhn was entitled to be paid out of the proceeds of the 130 acre tract before any of the other claimants. It also found that for any deficiency Kuhn could resort to Elliott’s 320 acre tract. A decree was made in conformity with this finding. Brown, the Bank and Windisch filed motions for a new trial because (amongst other reasons) “said decision, finding and decree are not sustained by sufficient evidence, and are contrary to law,” and “ the court ought to have decreed said lands so remaining in the name of William A. Elliott, to be exhausted by said Kuhn before coming on the-proceeds of said 130 acres.” Windisch’s motion was not so phrased, but it presented the same questions, with others. The motions were overruled, exceptions duly made, and a bill of exceptions presenting the whole of the evidence made part of the record. Brown filed a petition in error in the supreme court making all parties to the case in the district court defendants in error, and all were duly brought into court by service of summons in error or by proper waiver and appearance. Windisch, Mrs. .Sohngen, Sohngen’s assignees and Kuhn filed cross-petitions in error, but no summons in error was issued on either cross-petition and no waiver or appearance was ■made thereto.
• Pending the case in the supreme court Elliott died, and, on motion of Brown, the plaintiff in error, the case in error was revived against his administrator and heirs. No motion for revivor was made by any of the cross-petitioners.
Elliott’s representative and heirs insist:—
1. That-the decree of the common pleas finally determined that as between William Elliott on the one hand and Sohngen’s assignees and Kuhn on the other, the mortgage debt was paid; that that branch of the case was not affected by the appeal.
2. That as no summons in error’was served on him, and no appearance made by him as a defendant to either cross-petition’ in error, neither of the cross-petitioners can ask anything in this court against him.
3. That neither of the cross-petitioners can ask anything liere against Elliott’s administrator, or heirs, because the only revivor was in the case made on Brown’s petition in error.
Harrison, Olds Marsh, for Brown and the Bank.
I. Brown and the Second National Bank, respectively, are, in equity, entitled to have so much of the proceeds of the sale of the 180 acres of land, as is necessary for that purpose, applied to the payment of the mortgage indebtedness which the district court adjudged to be owing to them respectively.
Inasmuch as Kuhn has a first lien on 327 acres of land, as well as on the 130 acres of land, to secure the payment of the indebtedness found due to him, and the 327 acres of land will sell for an amount largely in excess of such indebtedness, and Brown and the Second National Bank have a lien on only the 130 acres of land, Kuhn, as such prior lien holder, will be compelled, in equity, to subject so much of the 327 acres of land to the payment of the indebtedness owing to him, as is necessary for that purpose, instead of subjecting the 130 acres of land, or the proceeds thereof, to the payment of such indebtedness. Fassett v. Traber, 20 Ohio, 540; Teaff v. JRoss, 1 Ohio St., 469, 475; Shorten v. Brake, 38 Ohio St., 76, 85.
II. William A. Elliott is not in a position to controvert this right of Brown and the Second National Bank. Under the circumstances he is estopped, as against them, from setting up a latent equity as between him and Sohngen. By his own acts, in executing and delivering an absolute deed for the 130 acres of land to Sohngen, who afterwards mortgaged the same to Brown and the Second National Bank, he plainly said to them, and all other persons, that Sohngen was the absolute owner of the land, and that they might safely deal with him as such owner. To allow him now, in any way, or for any purpose, to set up claims inconsistent with these acts, and to the prejudice of Brown and the Bank, as mortgagees, would be, in effect, to work a fraud upon their rights. JResor v. O. M. JR. JR. Go., 17 Ohio St., 139; Martin v. Outland, 18 Id., 383; Lx'rs of Swartz v. Leist, 13 Id., 419.
1. In some states, an assignment of a mortgage, to operate as constructive notice to subsequent purchasers, must be recorded. The Registry Act of this state does not provide for the record of such an assignment. But where the mortgagee, retaining the legal interest in the mortgage, subsequently to the legal transfer of the mortgage debt, or of a part thereof, enters satisfaction and a discharge upon the record of the mortgage, such discharge operates to cancel the record of the mortgage, as against subsequent purchasers and mortgagees, in good faith and without notice; and as against them, the assignee of the note can not assert his equitable lien. Lx’rs of Swartz v. Leist, 13 Ohio St., 419. So that in this case had Sohngen, upon the delivery by Elliott to him of the deed conveying the 130 acres of land to him, absolutely entered satisfaction and a discharge upon the record of the mortgage from Elliott to him, and Brown had afterwards become a mortgagee in good faith, and without notice of Elliott’s alleged latent equity, Kuhn, as against Brown, could not have asserted his equitable lien as assignee of the note secured by such mortgage : A fortiori Elliott cannot assert his alleged latent equity to the prejudice of Brown and the Bank. Yet, such alleged latent equity is. the only thing which is interposed against the right of Brown and the Bank to have the debt due to Kuhn satisfied out of the 327 acres of land.
2. Brown, when he advanced his money on the mortgage executed to him by Sohngen, had no actual notice of Elliott’s alleged equity. And he was affected with constructive notice only, that the notes secured by the mortgage which had been executed by Elliott to Sohngen might have been assigned to a third person. He was not affected with constructive notice of Elliott’s alleged latent equity between him and Sohngen. And, inasmuch as the -jportgage of Elliott to Sohngen was upon the 327 acres of' land as well as upon the 130 acres of land, Brown could rely upon his right to compel the assignee of said notes to sub ject so' much of the 827 acres of land as should be necessary for that purpose, to the payment of the amount due upon such notes, before enforcing his lien on the 130 acres' ¿f land. -
3. As between Brown and Elliott, Brown had a right to rely upon the covenants in the deed of Elliott to Sohngen, that the 180 acres of land were free and clear from all incumbrances, and that he would forever warrant' and defend the same against all lawful claims whatsoever.
It is a well settled principle that if one conveys real estate, with a general covenant of warranty against all lawful claims, he cannot be allowed to set up against his grantee, or those claiming under him, any title to such real estate. Even if the warrantor acquires á title subsequently to his conveyance, such new title will inure, by way of estoppel, to the use and benefit of his grantee, his heirs and assigns. This principle is founded in equity and justice, as well as the policy of the law.
• III. Brown and the Bank stand on the footing of Iona -fide purchasers, for a valuable consideration passing at the time of the execution of the mortgage of Sohngen to Brown, without notice of the alleged latent equity between Elliott and Sohngen; and Brown and the Bank are, therefore, entitled to be protected as such purchasers or mortgagees, in good faith, and without notice. Shorten v. Brake, 38 Ohio St., 76, 85.
Thé equities of Brown and the Bank, as bona fide mortgagees, are stronger than Elliott’s alleged latent equity. He negligently or confidingly executed and delivered to Sohngen, an absolute deed of conveyance in fee, for the 130 acres of land, containing covenants against incumbrances-and of general warrant}1-. Sohngen was thus invested by Elliott with the legal power, and ostensibly, a perfect right to convey the land to Brown, either by deed absolute or by way of mortgage. And, as between Elliott and Brown and the Bank, Elliott having reposed confidence in Sohngen, and given him the power to deal with the land free from any latent equity'or claim of Elliott’s, he should suffer the consequences of any loss which must be borne by reason thereof. . . ■
Elliott ■ could easily have protected himself against loss by taking an obligation from Sohngen, with security, for the payment of the mortgage indebtedness,-which he claims Sohngen assumed to pay. Elliott, therefore, through his own negligence or misplaced confidence in Sohngen, having failed to so protect himself against loss, cannot now cast the loss upon Brown, who-was induced to loan his money upon the faith of Elliott’s conveyance to Sohngen. Fx’rs of Swartz v. Leist, 18 Ohio St., 419.
As to third parties, and surely, as to any person claiming as grantee or mortgagee of Sohngen without notice of any secret equities between Elliott and Sohngen, the covenants in the deed of Elliott to Sohngen were evidence, and, as against Elliott, conclusive evidence that the 130 acres of land were unincumbered, and that he had no claim of any kind, either legal or equitable, therein or connected therewith. Justice requires that Brown and the Bank should, ■have the protection and benefit of these covenants. The covenant of warranty runs with the land, and in Ohio, so does the covenant against incumbrances. Foote v. Burnett, 10 Ohio, 317, 333; Rawle on Covenants, &c. (4th ed.), 350.
IV. To charge - Brown and the Bank with constructive notice of the alleged latent equity of Elliott against Sohngen, in the absence of any claim or proof of knowledge of the facts upon which such alleged latent equity is founded, or of fraud, or of gross or willful negligence on the part of Brown or the Bank, would be inconsistent with the purpose of the registry laws, with the settled principles of equity, and with the convenient transaction of business. Williams v. Jackson, 107 U. S., 478, 484, and cases there cited-
Win. F. Brown and Morey, Andrews Morey, also for Brown and the Bank.
I. It is a principle well established in equity, that when a senior mortgage is a lien upon two properties, and a junior mortgage is a lien upon one of the same properties, the former will be compelled to first exhaust its exclusive: security, so that the' latter may, if possible, be satisfied out of the common security. Jones on Mortgage, § 1628 et seq.; Wright’s Rep., 498; Bassett v. Traber,- 20 Ohio, 540; Teaff v. Moss, 1 Ohio St.,.469-475; Carey v. Balsom, 14 Id., 365; Green v. Mamage, 18' Ohio, 428.
Wm. A. Elliott, by the'covenants on his deed to Sohngen,. proclaimed to Sohngen, and all claiming under him, that the 130 acres were free 1 and unincumbered, and that he. would warrant and defend the same against all claim or; claims of all persons whomsoever. These covenants run-with the land. Foote'y. Bennett, 10 Ohio, 317-333; King v. Kerr, Adm., 5 Id., 154; Wilson v. Taylor's Bx., 9 Ohio St., 595; Rawle on Covenants, 313, et seq.; Wead v. Larkins, 54 111., 489, S. O. 5 Am. Rep., 149. He is now estopped from denying his covenants. Biglow on Estoppels, 578; Rawle on Covenants, 404, et seq.; Quintan v. Myers, 29 Ohio St., 500-501; Broadwell v. Phillips, 30 Id., 255; Magruder v. Bsmay, 35 Id., 221; Rosenthal v. Mayhugh, 33 Id., 155; Lessees of Boston v. Heirs of Moore, 15 Ohio, 408.
It does not help the covenantor to show that the covenantee, or those claiming under him, knew the covenant was not true. A lien was not excepted from a covenant against incumbrance, or an outstanding title, from a covenant of warranty, by the mere fact that the covenantor or covenantee or both knew of its existence. Rawle on Cov., p. 116, et seq.; Harlow v. Thomas, 15 Pick.,-70; Medler v. Hiatt, 8 Ind., 173; Suydom v. Jones, 10 Wend., 185; Loyd v. Quinley, 5 Ohio St., 262-265.
Assume that -Sohngen was the principal debtor, and that as against him Elliott may have had,the right to insist that the 130 acres should first answer the mortgage, still as against subsequent purchasers, Elliott, by reason of his covenants, occupies about the same position that a senior mortgagee occupies towards a junior mortgagee, when he has released a part of his security not liable to the junior. If the common security is inadequate to pay both claims, the junior is preferred to the senior pro tanto, the amount released by the latter, Fassett v. Traber, 20 Ohio, 540; Teaff v. Foss, 1 Ohio St., 469; Cheeseborough v. Milliard, 1 John. Ch„ 409.
•Isaac Robertson, for Eliza Sohngen,
claimed that she as wife of Louis Sohngen (both now living) was entitled to an inchoate, or contingent right of dower in the real estate in controversy, and that she is to be compensated therefor out of the purchase money of said real estate. 7 Paige, 886, 408-10; Blade v. Kalman, 30 Ohio St., 196; Rosenthal v. Mayhugh, 33 Id., 168; Munger v. Loiter, 32 Id., 210.
Thomas Millilcin, for the administrator and heirs of Wm. A. Elliott.
I. We claim as to William A. Elliott, that the issue as to his three promissory notes, were properly triable by jury; that they were fully and finally settled by the judgment in the court of common pleas, and that there was no appeal from this judgment. Section 5226, Rev. Stat.; Brundridge v. Groodlove, 30 Ohio St., 377; Rowland v. Fntrelein, 27 Id., 47; Massie v. Stratford, 17 Id., 597; Fleming v. Kirlcendal, 31 Id., 571; Keller v. Wenzell, 23 Id., 597. He no longer had any interest in the question of. the distribution of the proceeds of the 130 acres, which question alone was carried up by the appeal.
Cross-petitions in error were filed, by Conrad Windisch and the Second National Bank of Hamilton, but summons in error were not issued on either of them, nor has any appearance been entered by William A. Elliott in his life, or by his administrators or his heirs since his death, and in fact as to said cross-petitioners the proceeding in error has not been revived against the administrators and heirs. It was revived only as to William E. Brown. The court then has no jurisdiction to try the said cross-petitions. Rev. St., § 6713.
II. It is claimed by counsel for Brown that he and the Bank have a right to compel Kuhn to exhaust Elliott’s other property before resorting to the proceeds of the 130 acres, on which alone they have a lien. The correct rule is stated in 2 Jones on Mort., § 1628. Two things must exist before the general rule can be applied:
1. The mortgagee must have other valid security. '
2. It must not work injustice to any other person interested in the securities.
Both these requisites are wanting in the case before the court, and the rule cannot be applied. Kuhn has no security on Elliott’s other land. The mortgage was by agreement paid in 1873; even if Clawson stood before the court, claiming the mortgage, Elliott would have the right to compel him to first exhaust the 130 acres. But in 1875, Sohngen paid Clawson his debt and the Elliott notes and mortgage were returned to him. He had before agreed to surrender them to Elliott. He complied with the agreement in part by paying Clawson. By paying Clawson he paid Elliott’s notes and mortgage. He had agreed to surrender them to Elliott, but instead of doing so he wrongfully repledged them upon a new loan with Kuhn. They were paid before Kuhn got them. Besides, they were overdue. The court will observe that Kuhn did not- obtain his title to the Elliott notes from Clawson, and he is in no sense protected by Clawson’s title.
There was no new indorsement of the notes and mortgage to Kuhn. The moment the collaterals came back in 1875 into Sohngen’s hands, Elliott’s right to them was not only superior to any other right but it was the then only right. Neither Kuhn, Brown, the Bank or Windisch then had any right whatever. The mortgage of Brown and the Bank (which are the same) is dated August 25, 1875, long after Clawson was paid and the collaterals surrendered. Windisch’s lien began in 1878. I insist that the finding and judgment of the court of common pleas declaring that the Elliott notes were paid, was unappealable, and that it is not an open question whether or not they are paid.
Besides, Brown in his. answer and the Bank in its answer say nothing is due to Kuhn on the Elliott notes; that Sohngen had no right to pledge them to Kuhn; “without the knowledge or consent of said Elliott, and without authority and is void.” Windisch is, if any thing, still more explicit. In his answer, he says: “ and for his second defense said defendant says, that all of said notes (Elliott’s) have been paid, and said mortgage is fully satisfied.” Brown, the Bank and Windisch are therefore estopped from now claiming that Kuhn has a valid other security upon Elliott’s lands.
The other requisite to the application of the rule cited from Jones, to wit: that it must not work injustice to another person interested in the security, is also wanting. Elliott having paid the claim in 1873, had a superior equity from that date. The mortgage delivered to Kuhn was paid as to Elliott, and so far as his lands are concerned he has a right to insist upon a cancellation. As to Sohngen a different rule applies. He represented to Kuhn that the Elliott mortgage was valid, and upon the faith of his representations he' induced Kuhn to lend him the money. Sohngen then held the legal and equitable title to the 130 acres. No other claimants stood in the way as to this 130 acres.
The rule in such a case is this: “ The owner of lands who treats a mortgage upon the same which has been assigned to him as a valid instrument, and transfers it as such is estopped from insisting as against the assignees under him, that in his hands it has merged and disappeared in the fee.” 4 Waite’s Actions and Defenses, 533-34; Powell v. Smith, 30 Mich., 451.
Kuhn has no right to the Elliott mortgage, except by way of estoppel arising out of Sohngen’s fraudulent representations as to its validity, and this right is limited to that portion of the land embraced in the mortgage belonging to Sohngen (the 130 acres). Sohngen could do no act that would bind Elliott. See Jordon v. Furlong, 19 Ohio St., 96.
III. It is claimed by counsel for Brown, that when Elliott conveyed the 130 acres to Sohngen, he covenanted that the same was unincumbered and that Elliott is thereby estopped to show that Sohngen was to pay the mortgage. Precisely the opposite doctrine is held in Pied v. Syoks, 27 Ohio Sfc., 285. See Jones on Mort., §§ 865,'867; Mickles v. Townsend, 18 N. Y., 575 ; 14 Ohio St., 405; 22 N. Y., 535; Rawle Cov. Lit., 340; 10 Ohio, 333; 3 Id., 211; 17 Id., 60.
Israel Williams, and Long, Kramer <f Kramer, for .Kuhn.
I. We claim that Samuel Kuhn’s equity in the 130 acre tract, is superior to Brown and all other parties. Brown claims that he had no notice of the outstanding mortgage of Kuhn; that he was authorized to assume that the Sohngen mortgage had merged in the fee by operation of law. He knew the mortgage was on record and was uncancelled, and .he knew that it was still a valid lien on the other tract of 327 acres. The defeasance clause showed him that as to two of the notes, they were not due and were negotiable in August, 1875, when he obtained his mortgage. This state of the record gave him positive notice, that the mortgage was still alive; that it represented a thing of life, — an actual debt, and put him upon notice and inquiry. Brown and the Bank 'are not innocent purchasers. Their debt remaining unpaid under their mortgage, was antecedent,— their mortgage, so far as the debt unpaid is concerned, was given to secure an antecedent debt, and was not for a present consideration passing at the time; They did not part .with any money on the faith of the mortgage. The mortgage was also given to indemnify the mortgagee against three certain notes, in existence prior to the taking of the mortgage, and upon which Brown was liable with Sohngen. Brown knew at the time that two of the notes at least were not due, and might be in the hands of innocent third parties, and he knew that if so, the mortgage went with the debt, the incident must follow the principal thing, and he knew from the record that the mortgage was not released, discharged or satisfied as to the 130 acres, or as to the 327 acres. Did this not put tíim upon notice ? Should he not have inquired as to who, if any person, held the notes not due and negotiable ? Is he not himself guilty of laches ? He has not suffered on account of any act or conduct of Kuhn.
II. The principle in equity of two funds or double funds, does not* apply in this ease. The principle contended for by the plaintiff in error, applies only where the liens are founded upon debts existing against a common debtor. In the case at bar, the lien of Samuel Kuhn, is against Elliott, that of the plaintiffs in error, and the Second National Bank and Windiseh, are against Sohngen. They have no claim, debt or demand whatever against Elliott. They acquired their liens- against Sohngen, upon land conveyed to him by Elliott, founded upon debt against Sohngen alone, and these liens were all acquired with full notice in law of the prior mortgage of Kuhn. The rule in equity as to marshalling liens where a creditor or senior mortgagee has two funds or properties, is elementary, and none will. dispute it, but there must be a common debtor, otherwise the rule cannot apply. In this case, there is no common debtor, this necessary element is wanting. Elliot is Kuhn’s debtor, but is not debtor to the Bank or Windiseh.
III. We maintain that Kuhn is not bound by the contract of 1873, as between him and Elliott, or as between him and Sohngen, and that they are both estopped from asserting it against him. The Elliott notes and mortgage were not paid or satisfied by the contract of 1873, so far as Kuhn was concerned. By this contract, Sohngen merely assumed the payment of it, as between him and Elliott, and the latter was still bound on his notes and mortgage to Clawson. Elliott knew at the time of making the contract that some man in Cincinnati held his notes and mortgage, and he had constituted Sohngen his agent, to negotiate his notes and mortgage, all of -which was for his-benefit in con- . junction with Sohn'gen. As he received the benefit of this transaction, he is now estopped from denying his liability7".
Von Seggern, Pharis Pewald,ior Windiseh.
As between Kuhn and Windiseh, each - having a lien on the 130 acre tract, and Kuhn, the prior lien-holder, having also a lien on other property, to secure his debt, on which Windiseh has no claim, there can be no doubt that Kuhn will be compelled in equity to exhaust the property on which Windiseh has no lien, before coming on the 130 acre tract, to satisfy his claim. Forrest v. Traber, 20 Ohio, 540; Miami Fx. Co. v. Bank XT. Wright’s R., 249, 256; Lodwick v. Johnson, Id., 498;' Jones on Mort-., § 1628, et seq.

Opinion:
Granger, C. • J.
The statutes regulating pleadings, appeals and proceedings in error in force pending the action below were worded substantially, if-not precisely, as the Revised Statutes. Section 5059 authorized a defendant to file an answer asking affirmative relief, to be styled " a cross-petition." The only provision for a summons upon a cross-petition is in section 5074. Its object is to bring in as a defendant a person not at the time a party to the original action. Moreover, section 5097, fixing rule days for pleadings, directs that an answer to a petition shall be filed on or before the third Saturday "after the return day of the summons," while the answer to a cross-petition shall be filed on or before the third Saturday " after the cross-petition is filed." These sections imply that no summons is to go out upon a cross-petition except to bring some one into court who is not already there. To summon those already in court would add materially to the cost of litigation without reason. The cross-petition can ask relief only "touching the matters in question in the petition." The same section (5071)' that tells what a defendant may set forth in his answer includes the matter of a cross-petition. Every other defendant is warned to examine the court files, after the rule day for answer, for cross-petitions against himself, as fully as is the plaintiff in the action. We find no statutory provision for cross-petitions in error. In practice they have been sanctioned, and we think that the same rule ought to apply to them as to cross-petitions in the common pleas. No summons for, or waiver by, William A. Elliott in the cross-petitions was necessary or proper. He was already in court.
A like principle applies to the revivor. Its object was to bring the administrator and the heirs into court in the place of the decedent. Upon Brown's application they were duly brought here, and they are here for the whole case.
A more difficult and- perplexing question is presented by Elliott's motion to dismiss the appeal. Case No. 11190 was first brought, and Kuhn and Elliott might well have been made defendants therein to cross-petitions by Brown and the Bank. Kuhn might clearly have been made a defendant to the petition; and Elliott also, because of Sohngen's claim that he was bound to relieve the land by paying the Kuhn debt. If they had been so made defendants, Kuhn could not have asked a personal judgment against Elliott, because in his answer he could only " ask relief touching the matters set up in the petition." From any decree rendered in that action either party could appeal. In it the land had been sold and. its proceeds were in court for distribution. "The consolidation was made in .order to determine who was entitled to that fund." So says the argument for Elliott's administrator and heirs. The journal entry in the common pleas .expressly states that the issues were submitted to it "for-finding and decree as to the right of the respective parties in said fund, and for an order and decree of distribution thereof." It is a fair presumption that the case resulting from a consolidation made for the purpose of settling rights in a fund and determining its distribution, was the case in which the fund was created and held. We know of no law recognizing a case in which the assignees of Sohngen and Kuhn could be joined as plaintiffs under the state of facts shown by this record. The " consolidated case " was either two cases tried together at the same time, upon the same evidence, for the convenience of parties, or it should be treated as one case conforming to statutory requirements regulating a civil action. -The parties have treated it as one case, and in order to do justice and equity this court ought to acquiesce in their action. But the law does not allow two petitions by different plaintiffs in the same action. It does' not permit a petition containing different causes of action in one of which one set of plaintiffs are alone interested, and a second in which another set of plaintiffs are alone interested. After the consolidation one of the petitions necessarily ceased to be a petition and became an answer and cross-petition. Considering the object of the consolidation the petition that produced the fund, following the rule of the " survival of the fittest," became the petition .in the consolidated case.
We think'therefore that the " consolidation " should be considered as substantially effecting the appearance of Kuhn and Elliott as defendants in No. 11190. As a result, Kuhn could not assert in the consolidated case any claim to a personal judgment against Elliott. The agreed purpose of the consolidation and the terms of section 5071, Rev. Stat., unite in prohibiting such a claim by him. We do not overlook the fact that the " consolidation " was " by agreement of parties." But we think that no such agreement should be permitted to make a legal monstrosity, such as a double-•headed civil action. They must be presumed to intend the creation of a civil action of the statutory form and with the statutory pleadings; an action with but one petition. From the nature of the question to be determined in the consolidated case, the petition of Sohngen's assignees in No. 11190 became the petition in the consolidation. We treat their cross-petition in No. 11483 as an amendment thereto, and regard Kuhn's petition as a cross-petition in the new case. If we are right in thus treating the case it was appealable as against William A. Elliott. The doctrine of Dodsworth v. Hoppel, 33 Ohio St., 16, supports this position.
This brings us to the merits. We think the evidence clearly proved that as between William A. Elliott and Sohngen, Elliott was liable for the entire judgment against George Elliott and his bondsmen. William and George testified that Sohngen was liable for half of it, and that at the time of the sale of the 130 acres the whole matter was settled by Sohngen's agreement to pay $2,850 to the man in Cincinnati. Sohngen testified that under the original agreement William Elliott was to pay all of George's debt. Sohngen's clerk corroborated this. Ordinarily a reviewing court will not disturb the finding of the trial court upon conflicting testimony. But this record presents an array of undisputed facts which, we think, are so plainly inconsistent with the claim of the Messrs. Elliott,' that the finding ought to have been in favor of Sohngen.
In 1871, William operated the distillery at a loss to himself and paid §3,000 on the debt. While doing this he not only did not call on Sohngen for help, but he also paid him in full for all the malt furnished by him. In May, 1872, although William had then paid §3,000 of the debt, and Sohngen nothing, William with his wife, mortgaged to Sohngen 450 acres of land, and gave him his negotiable notes to the amount of §12,000, running for two, three and four years. He knew that these notes and that mortgage were pledged by Sohngen in order to obtain the §9,605.49 which was paid upon the judgment. In his sworn account (filed in June, 1876,) as assignee of George, William credited himself with having paid the whole of this §9,605.49, as well as the §3,000, and -drew the dividend belonging thereto as on valid claims against George's estate. It is urged that this account was prepared by his counsel, and that William ignorantly verified it. It seems to us unlikely that William would forget within four years after the §9,605 was paid, the source from which it came, and we must treat his affidavit to that account as weighing against him upon the point in question. But we will not dwell on this, because more convincing evidence is in the record.
On April 12th, 1873,' when William Elliott knew that his mortgage and notes were held by a " man in Cincinnati "— for value and before maturity — he agreed to convey the 130 acres to Sohngen. He took from Sohngen an agreement to pay, as part of the purchase money, "to interest on §10,000, mortgage held by man in Cincinnati, §850," and "amount cash to William A. Elliott to pay on principal of §10,000 mortgage held by man in Cincinnati, §2,000." The Elliotts claim that this §2,850 represented ali of William's half of the debt that was then unpaid. If that were so, the best and shortest phrase would have been to follow the enumeration of the other items composing the §14,000 of purchase money by the words " and pajr in full the mortgage held by the Cincinnati man." If William was to have nothing more to do with that debt, what mattered it to him that the $850 was to be paid on the interest and the $2,000 on the principal ? William's counsel was at hand and the memorandum resulted from his prudent suggestion to put in writing what they had agreed should be done. One week later William and his wife conveyed the 180 acres to Sohngen. He not only did not take from Sohngen a mortgage to secure compliance by Sohngen with the alleged agreement to pay the Cincinnati man in full, but he covenanted that the 130 acres was then free from all incumbrance and that he would warrant Sohngen and his heirs and assigns against all lawful claims upon said land. William then knew that the mortgage and his notes were a valid and lawful- incumbrance on that land in favor of "the Cincinnati man." His lawyer had cautioned him to put the agreement in writing. Instead of calling upon Sohngen to agree by some writing to keep him and the 320 acres harmless from the mortgage, he covenanted expressly that he (Elliott) would warrant Sohngen and any owner of the 130 acres under him against that mortgage. His notes matured in 1874, 1875 and 1876, yet the evidence does not show that he made inquiry after them, or sought in any manner to get control of them until after Kuhn sued on them. '
On June 11-14, 1876, the last of his three notes became due, and on June 30th, 1876, he verified his account as assignee, claiming that all of the $9,605.49, raised by the pledge of his mortgage and notes, was his money; that he had paid it on the judgment. For six years William acted as if the whole debt was his own; as if he had no right to call on Sohngen to pay it. On the other side — Sohngen's conduct was not inconsistent with his claim. As between him and the United States he was liable for the whole judgment. It was for his interest to aid as he did in raising the money. William's mortgage made him absolutely secure. So long as that existed as a valid lien, Sohngen's estate was sure of reimbursement for any payment made by him to Kuhn. So far as he paid anythipg to Kuhn, he was paying it upon his own notes. To refuse to meet, or renew them, would affect his credit. Up to Sohngen's failure William had so dealt with him, that he might well be willing to delay such steps as would produce a foreclosure upon William's land. A refusal to renew his notes to Kuhn would have forced a foreclosure. William's request to Sohngen to take other land in payment, made after the sale of the 130 acres, showed that he was not able to pay in money. William's offer to pay in land, and Sohngen's absolute security by means of the mortgage, would have rendered harsh any steps leading to foreclosure. Sohngen's action was natural, and, as already said, not inconsistent with his claims. But if William's claim was true his conduct was unaccountable. We have no hesitation therefore in holding that the finding of the district court upon this matter was unsupported by the evidence.
We also think that Kuhn did not take the Elliott notes after all of them were due. Kuhn first took the mortgage and notes May 7, 1875. At that time only one of Elliott's notes was due. The subsequent transactions were merely renewals of the same debt. No additional loan was made by Kuhn. He gave up overdue notes and took new notes in place of them, receiving money to make good his interest or discount; but, all the while, he held Elliott's mortgage and notes as collateral. Kuhn held, therefore, the first mortgage lien upon both tracts- of land for the true sum due to him from Sohngen after deducting the usury.
Even if Elliott's claim that Sohngen should pay all of the Kuhn debt were true, we think that Brown and the bank were entitled to a decree requiring Kuhn to exhaust the 320-acre tract first. It is only when equities are equal that the elder prevails. When the holder of the elder equit}'- has so acted as to estop himself from asserting it against the holder of the younger equity, the latter must prevail. By his deed of April 19, 1873, Elliott said, in effect, to Brown: "You need not inquire back of this day; I vyarrant you that this land is now clear and free from every valid incumbrance." He then knew that a Cincinnati man held for value his mortgage securing notes not then due. By the express terms of his covenant Sohngen's assigns had a right to rely on that covenant as a statement of fact, even if the claim that they could not recover against him on his covenant be valid. It is unnecessary in this case to decide whether a mortgagee, standing as Brown does, could recover on such a covenant. Reading it in the deed, Brown had a right to believe that the debt secured by the mortgage of April 19, 1873, was Elliott's debt, and that Elliott's 320 acres would be first applied to -pay itl No claim is made that Elliott acquired any equity after April 19, 1873. Every claim that belonged to him at the time of the trial below belonged to him when he delivered the deed to Sohngen. Even if the rule required Brown to inquire for equities of later growth, he had a right to rely upon the covenants in the deed of April 19, 1873, as an assurance that there then existed no right in Elliott to enforce, in any manner, an incumbrance upon the 130-aere tract. Having made that assurance part of the recorded title to the land, subsequent purchasers and mortgagees who parted with their money, believing it to be true, ought not to suffer loss at his instance because his deed did not state the truth.
It is claimed that such covenants do not prevent the enforcement of a vendor's lien for the unpaid purchase-money. That is true. But in this case, as the record indicates, the entire $14,000 of purchase-money was paid.
It is urged that in 1875 Sohngen actually paid off the debt secured 'by the pledge of the mortgage when he settled with Clawson and transferred the pledge to Kuhn ; that as between Sohngen and Elliott the mortgage was then extinguished by satisfactioñ.
But Elliott had no part in that transaction. He must base his claim for any benefit from it upon rights that belonged to him (if ever) before he made the deed of April, 1873. According to the views hereinbefore expressed his covenants in that deed estop him as against Brown and the Bank from asserting rights, then and theretofore belonging to him, in any way enforcing any then existing incumbrance on the ISO acres. If because of some new consideration moving from Elliott after April 19, 1873, Sohngen had extinguished the mortgage as between himself and Elliott, while leaving it in force in favor of Kuhn against both of them, a different question would be presented. No such considerations, however, will avail Windisch. Unless the debt to Kuhn is William's debt, Windisch cannot ask the application of the 320 acres to pay Kuhn.
Mrs. Sohngen's claim for dower remains for decision. We think it is so connected with the main controversy that the appeal brought it into the district court unaffected by the decree in the common pleas. If the final finding shall determine that the entire debt to Kuhn is' the debt of William Elliott's estate, and the 320 acres shall suffice to pay it, Mrs. Sohngen will be entitled to the value of her inchoate dower in the proceeds of the 130 acres. If, however, any of the Kuhn debt was in fact Sohngen's debt, the sum of the money required to pay Sohngen's part of that debt must be deducted from.the proceeds of the 130 acres in determining the extent of her dower claim, notwithstanding the fact that the equity of Brown and the Bank may throw Kuhn wholly upon the 320-acre tract. So far as any of the Kuhn mortgage was Sohngen's debt, Elliott's estate has a right to have 'any of the proceeds of the 130 acres unconsumed by Brown and the Bank applied upon the Kuhn mortgage. In so far as Brown and the Bank (in such case) consume those proceeds, they take money that would have gone to Kuhn were he not controlled by their equity. As to it they would stand in his shoes so far as the dowress is concerned, and therefore she could not take from them.
Judgment of the district court reversed and the cause remanded.