Case Name: Fowler, Guardian, v. Maus et al.
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1895-03-20
Citations: 141 Ind. 47
Docket Number: No. 17,112
Parties: Fowler, Guardian, v. Maus et al.
Judges: 
Reporter: Indiana Reports
Volume: 141
Pages: 47–55

Head Matter:
No. 17,112.
Fowler, Guardian, v. Maus et al.
Real Estate. — Might of Grantee of Purchaser to be Subrogated to Mights of Lien-holders, Paid as Part of the Purchase-Price or Subsequently in Good Faith. — Equitable Melief. — J., a married man, purchased real estate of L., subject to certain incumbrances, which he assumed to pay as a part of the purchase-money; and to indemnify L. against such incumbrances, J. executed to L. a mortgage on the real estate, in which his wife did not join. Soon afterwards, and without paying such incumbrances, J. sold the land to H., and agreed to convey the same to him by warranty deed, H. having no knowledge that J. was a married man, but believing him to be single, and having no knowledge that the land was incumbered in any way; but on H. discovering such incumbrances, J. procured satisfaction to be entered of record of all incumbrances the payment of which was secured by JVs mortgage to L., except two mortgages and a judgment, and it was arranged, J. assenting thereto, that H., in order to obtain a clear title to the property, should obtain sheriff’s deeds thereto under the mortgages, in addition to the conveyance to be made by J., H. paying said mortgages and judgments and paying to J. only the balance of the price he had agreed to pay therefor. J. executed to H. a warranty deed for the land, in which his wife did not join, which deed did not contain any assumption clause by H. of any liens or incumbrances. Sheriff’s deeds were afterwards obtained by H., as arranged, and he paid the mortgages and judgments, which were entered satisfied of record, and he paid the remainder of the purchase-price to J., all of which was done by H. without knowledge that J. was a married man.
Held, that in an action for the wife’s one-third .interest, A., a remote grantee of H., is entitled to be subrogated to the mortgage executed by J. to L., so far as it secured the mortgages and the judgment paid by H., with interest, less rents exclusive of improvements.
Held, also, that equity will treat the incumbrances, if valid liens, as assigned to H. and not as satisfied, and H. could enforce the same against the property.
From the Marion Circuit Court.
8. N. Chambers, 8. O. Pickens and C. W. Moores, for appellant.
IF. H. II. Miller, F. Winter and J. B. Elam, for appellees.

Opinion:
Monks, J.
This was an action for partition and accounting, brought by the appellant against the appellees.
The court, at the request of the parties, made a special finding of the facts and stated its conclusions of law thereon.
It appears from the special finding, that appellant's ward is the widow of Isaac E. Johnson, having married him in 1847; that Johnson, in 1862, bought the real estate in controversy, with other real estate, of one La-Rue, subject to large incumbrances, which he assumed and agreed to pay, as a part of the purchase-money. To indemnify his vendor, LaRue, against said incumbrances, he executed to him a mortgage on the real estate, in which his wife did not join; that soon afterwards, and without paying such incumbrances, Johnson sold the property in question and the other property, to one Heidlinger, for the consideration of $16,500, and agreed to convey said real estate to him by warranty deed. Heidlinger had no knowledge at the time nor afterwards until the bringing of this suit, that Johnson was a married man, but believed him to be unmarried. He had no knowledge' that said real estate was incumbered in any way. At the time of making the purchase Heidlinger paid Johnson $200 on said contract, and then procured the records to be examined, and discovered the incumbrance on the property. Johnson thereupon procured satisfaction to be entered of record of all of the incumbrances upon said property, the payment of which was secured by said mortgage to LaRue, except the mortgage executed by Harris and the mortgage executed by one Hobbs, both held by one Wilson, and the judgment of Ellis McAlpen & Co. It was thereupon arranged, said Johnson assenting thereto, that said Heidlinger, in order to obtain a clear title to the property, should obtain sheriff's deeds thereto, under the mortgages held by Wilson, in addition to the conveyance to be made by said Johnson, and himself pay said mortgages and the judgments in favor of Ellis McAlpin & Co., paying to said Johnson only the balance of the price which he had agreed to pay for said real estate; that the Harris mortgage was a lien on real estate other than that in controversy, while the Hobbs mortgage was a lien on the real estate in controversy in this action. May 9, 1864, Johnson executed a warranty deed, in which his wife did not join, conveying to Heidlinger all of said real estate. This deed did not state that said real estate was conveyed subject to any incumbrances, and contained no assumption by said Heidlinger of any liens or incumbrances. Sheriff's deeds were afterwards obtained by said Heidlinger, as arranged. Afterwards said Heidlinger paid the judgments and the said incumbrances, and the same were entered satisfied of record, and thereupon he paid the remainder of the purchase-money to said Johnson, all of which was done after the execution of said deed by said Johnson; that said Heidlinger took possession of said property by himself and his grantees, immediate and remote, of whom the appellee Maus is the last, and has been in open and adverse possession ever since. The sheriff's deeds to Heidlinger were executed in foreclosure proceedings on the Hobbs mortgages held by Wilson, to which appellant's ward was not a party. On January 16, 1883, Johnson died, leaving appellant's ward as his widow, who was adjudged to be insane, and appellant was appointed her guardian, thereupon he brought this action for partition and an accounting, claiming that his ward was owner of the undivided one-third of said real estate.
Upon the facts so found, the court stated its conclusions of law, to which appellant excepted at the time. The court below, in its conclusions of law, held that said appellee Maus, as the remote grantee of Heidlinger, was entitled to be subrogated to the mortgage upon said real estate executed by Johnson to LaRue, so far as it secured the Hobbs mortgage and the Ellis McAlpin & Co. judgment, as well as to said Hobbs mortgage and said judgment to the extent of the money paid thereon by Heidlinger, with interest from January 16, 1883, less rents exclusive of improvements; that said real estate be sold and that the costs of this action be first paid out of the proceeds of sale, and then a certain proportion of the remainder be paid to appellee Maus on account of the improvements made on said real estate, after the same was sold by Johnson; and that two-thirds of the remainder be paid to said Maus and operate as a credit to appellant upon the amount.due Maus on the mortgage and judgments aforesaid, the remaining one-third, after paying the said Maus any balance which may remain unpaid of the amount due him on said mortgage and judgments, be paid to the appellant.
The appellant makes no complaint of the order in regard to the payment of the proceeds of sale, if appellee is entitled to be subrogated, as held by the court; but he earnestly contends that such right of subrogation does not exist in this case; "that an incumbrance once paid off by a purchaser of land, which he assumed and agreed to pay as a part of the purchase-money, is, by such payment, forever discharged; and that having once been extinguished, it can not thereafter be revived by the purchaser, or kept alive for his benefit; in a word the purchaser can not be subrogated to a lien which is once extinguished." Citing Birke v. Abbott, 103 Ind. 1.
Appellee, on the other hand, claims "that Johnson and his wife as well took the property subject to all liens upon it at the date of his purchase, and that when Johnson conveyed to Heidlinger, by warranty deed, he at tempted to convey the title to the entire property, including the undisclosed interest of the wife, and, that in any event, the utmost of such undisclosed interest as against Heidlinger, was the inchoate one-third interest of the wife, in the excess of value of said real estate over and above the incumbrances."
It is clear, from the facts found, that if Johnson had died the owner of said real estate, without said incumbrances having been paid, his widow's interest therein would have been subject to the lien of said judgments and mortgages. Nutter v. Fouch, 86 Ind. 451; Keith v. Hudson, 74 Ind. 333; Walters v. Walters, 73 Ind. 425; McCaffrey v. Corrigan, 49 Ind. 175; Fisher v. Johnson, 5 Ind. 492; Talbott v. Armstrong, 14 Ind. 254.
In such case she would be entitled to have one-third of said real estate if the two-thirds would pay the incumbrances, but if the two-thirds were not sufficient to pay the same she would only be entitled to what remained after the incumbrances were paid. Bowen v. Lingle, 119 Ind. 560.
This is the legal effect of the conclusions of law stated by the court, and the decree entered in this case.
If Heidlinger did not agree with Johnson to assume and pay the incumbrances as a part of the consideration for the real estate, it is not claimed by appellant that the conclusions of law and decree of the court are incorrect. Hancock v. Fleming, 103 Ind. 533; Birke v. Abbott, 103 Ind. 1; Adams v. Wheeler, 122 Ind. 251.
As we understand the special finding, Heidlinger did not agree with Johnson to assume and pay the incumbrances on the real estate as a part of the consideration therefor, nor did he in any way become primarily liable for the same. The arrangement made with the assent of Johnson that Heidlinger should obtain sheriff's deeds and pay the incumbrances mentioned, was to protect and give him a clear title to the land, and did not make him personally liable therefor. We think, however, that the conclusions of law stated by the court and the decree rendered would be correct, even if the special finding stated that Heidlinger agreed to pay the incumbrances as a part of the purchase-money. Certainly no one would contend that if Johnson had no title and conveyed none to Heidlinger, he, Heidlinger, would not be subrogated to the incumbrances paid by him in good faith, in ignorance of the want of title in Johnson, even though he had assumed and agreed to pay the same as part of the purchase-money. In such case the payment would be made under a mistake of fact, and equity would treat the incumbrances, if valid liens, as assigned to Heidlinger and not as satisfied, and he could enforce the same against the property. This would be eminently fair, just, and equitable, and is abundantly sustained by authority. Dillow v. Warfel, 71 Iowa, 106; Betts v. Sims, 35 Neb. 840, 37 Am. St. Rep. 470; James v. Burbridge, 33 W. Va. 272; Goring v. Shreve, 37 Ky. (7 Dana), 64; Muir v. Berkshire, 52 Ind. 149; Whitehead v. Cummins, 2 Ind. 58; Crosby v. Taylor, 15 Gray (Mass.), 64; Sidener v. Hawes, 37 Ohio St. 533; Phillips v. Chamberlain, 61 Miss. 740; Rhead v. Hounson, 46 Mich. 243; Cutcheon v. Buchanan, 88 Mich. 594; Tomp kins v. Sprout, 55 Cal. 31; Smith v. Grimes, 43 Iowa, 356; Fordyce v. Hicks, 76 Iowa, 41; Sheldon Subrogation, sections 30, 31, 33, 34 and 36a.
In Dillow v. Warfel, supra, a husband and wife owned land jointly which was subject to a lien for purchase-money. The husband sold said real estate, representing to the vendee that he was authorized by his wife to do so, when in fact he was not. The vendee, as a part of the purchase-money, assumed and agreed to pay said vendor's lien on said real estate, and in pursuance of his agreement paid the same. It was held that the wife was the owner of the undivided one-half of said real estate, and said vendee of the other undivided one-half thereof, and that said vendee was entitled to be subrogated to the right of the holder of the vendor's lien which he had paid, and could enforce the one-half thereof against the wife's interest in said real estate.
In Betts v. Sims, supra, one Betts, a married man, was the owner of a homestead which could not be conveyed or encumbered except by deed of both husband and wife. Betts and his wife executed two mortgages thereon amounting to $1,100. Afterwards Betts conveyed the real estate to one Bentley by deed, in which his wife did not join. Afterwards Bentley conveyed the real estate to one Brown, who assumed and agreed to pay said mortgages as a part of the purchase-money therefor. After the conveyance to him Brown mortgaged the premises to one Bidleman for $1,150, with the proceeds-of which he paid off and satisfied the two mortgages executed by Betts and wife. Brown then conveyed the real estate to Sims, who, in consideration thereof, assumed and agreed to pay said mortgage of $1,150, which he afterwards did, and the same was entered satisfied of record. The court held that no title passed by the deed of Betts to Bentley, for the reason that his wife did not join therein; that neither Bentley, Brown, nor Sims had any title to said premises; that Sims, believing in good faith that he owned said real estate, having paid off said mortgage, was entitled to be subrogated to rights of the mortgagees in the mortgages paid by Brown and to have the same revived and enforced for his benefit against the premises.
In James v. Burbridge, supra, it was held that when a purchaser of land, pursuant to a contract, pays as a part of the purchase-money, a lien on land binding his vendor's estate in it, and such contract of purchase is aban cloned by tbe parties, and the vendor becomes unable to execute it, though the purchaser took no assignment when he so paid the lien, yet he is entitled to be subrogated to such lien and equity will keep it alive for his indemnity.
In Goring v. Shreve, supra, it was held that when a purchaser of real property assumes and agrees to pay incumbrances on said property, as a part of the purchase-money therefor, and does pay the same, believing in good faith that he is the owner of the real estate, when in fact he has no title, he is entitled to be subrogated to such incumbrances as are valid liens, and can enforce the same against such property.
Upon the same principle it is held in this and other jurisdictions, that purchasers at sales by executors, administrators, guardians, or trustees, or at foreclosure, etc., execution or other sales of like nature, or the grantees of such purchasers, will be subrogated to the rights of the holders of claims, which are paid by the purchase-money, or that they subsequently pay in good faith, in the event that the sale is ineffectual to convey title to the' property sold.
Watkins v. Winings, 102 Ind. 330; Willson v. Brown, 82 Ind. 471; Bodkin v. Merit, 102 Ind. 293; Bunting v. Gilmore, 124 Ind. 113; Blodgett v. Hitt, 29 Wis. 169; Levy v. Martin, 48 Wis. 198; Valle's Heirs v. Fleming's Heirs, 29 Mo. 152, 77 Am. Dec. 557; Hudgin v. Hudgins Exr., 6 Gratt. 320, 52 Am. Dec. 124; Caldwell v. Palmer, 6 Lea (Tenn.) 652; Martin v. Turner, 2 Heisk. (Tenn.) 384; Webb v. Williams, 1 Walkers Ch. (Mich.) 444; Min ing Co. v. Mining Co., 116 Ill. 170; Dutcher v. Hobby, 86 Ga. 198, 22 Am. St. Rep. 444; Everson v. McMullen, 113 N. Y. 293, 10 Am. St. Rep. 448; Scott v. Dunn, 1 Dev. & Bat. Eq. (N. C.) 425, 30 Am. Dec. 174 (177-182); Perry v. Adams, 98 N. C. 167, 2 Am. St. Rep. 362 (329); Chafe v. Oliver, 39 Ark. 531; Homeopathic Mutual Life Ins. Co. v. Marshall, 32 N. J. Eq. 112; Brewer v. Nash, 16 R. I. 458; Temperance House v. Fowle, 22 Ore. 303; French v. Grenet, 57 Tex. 273; Spaulding v. Harvey, 129 Ind. 106; Sheldon Sub. Sec. 40, 209.
Filed Mar. 20, 1895.
Such being the rule when no title is conveyed, or if conveyed is set aside, the same rule applies in this case, where one-third instead of the entire property is in question.
We think the facts found by the court fully sustain the decree entered, and that there is no error in the record.
Judgment affirmed.