Court Opinion

ID: 9526346
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:15:58.849118+00
Date Added: 2024-06-11T13:19:29.478633
License: Public Domain

On Petition for Rehearing
Kelley, C. J.
Appellees, in their petition for rehearing, assert that we failed to give a decision of a substantial question arising on the record, namely, whether or not appellant had an appealable interest.
Such decision was unnecessary as appellant’s right to appeal does not appear upon the record as any claimed error of the trial court for which reversal is sought. We have already ruled on the question adversely to appellees when we denied their petition to dismiss the action which was predicated on the ground that appellant possessed no appealable interest.
Appellees further assert we were in error in holding that their claims were not of such a nature as to constitute them valid and allowable claims against the estate. This proposal of appellees is based upon the apparent theory that when they paid the real estate taxes, which were assessed on the land prior to dece*391dent’s death, they became “subrogated” to the “rights” of the State of Indiana.
We must first observe that our opinion did not delve into a consideration of any matter of subrogation because appellees’ brief was so worded that we thought it confined to the statements made therein. As explanatory, it appeared from the record that the claim of appellee, R. Franklin Zehring, was filed more than six months after the first published notice to creditors, and appellant contended in his brief that such claim was filed too late. In answer thereto, appellees stated in their brief: “Thus, when appellees paid the real estate taxes, they became subrogated to the rights ‘of the state and any subdivision thereof . . . ’ and therefore were not obliged to file a claim within the six months’ period.” (Our emphasis.) We, therefore, concluded from the wording of the brief that their reference to the subject of subrogation was devoted to the exculpation of the claim of Zehring from appellant’s charge that it had not been filed within the statutory time; and, since the • conclusion we reached furnished no occasion for determining that question, we did not give it countenance.
It does not appear to us that appellees are in any position to urge the application to their situation of the equitable principles of subrogation. The circumstances and conditions attendant upon their purchase of the real estate from the executor, pursuant to and under the terms of the sale as fixed by proper order of the court, as particularly delineated in our opinion, would seem, in themselves, without further exploration, to dispel any valid claim by them of rights of subrogation. No fraud or impropriety in the proceedings leading to nor in the conduct of the sale by the executor is asserted. As pointed out in the main opinion, all pertinent and essential matters, such as the will, the *392court proceedings, the order authorizing and prescribing the terms of sale, and all other actions and proceedings taken by the court and the executor in connection with the sale of the real estate purchased by appellees, were of public record, and appellees make no contention that they were without knowledge thereof.
It must fairly follow, then, that appellees’ advanced proposal of subrogation hangs on the frail hook that by reason of their payment of the real estate taxes, which, by reason of their purchase of the real estate under and pursuant to the terms fixed by the court, were voluntarily assumed by them, they thereby became substituted creditors of decedent’s estate in the place of the State of Indiana. Appellees quote the rule found in some of the Indiana cases:
“The right of subrogation is not founded upon contract, express or implied, but upon principles of equity and justice, and includes every instance in which one party, not a mere volunteer, pays a debt for another, primarily liable, which in good conscience should have been paid by the latter.”
While necessarily incomplete as to all aspects of the rule, the principle, as quoted, suffices in most instances as an applicable affirmation. Fundamentally, as impliedly stated in the quoted pronouncement, the doctrine of subrogation or, as is sometimes stated, the “doctrine of substitution,” is a “device adopted by equity to compel the ultimate discharge of an obligation by him who in good conscience ought to pay it.” “It is not an absolute right, but one which depends upon the equities and attending facts and circumstances of each case.” 50 Am. Jur., Subrogation, sections 2 and 10.
It seems vain to now further expand the ramifications and various applications of the doctrine. Simply *393put, the attending facts and circumstances of the instant case, as portrayed in the original opinion, are inadequate to present a case where appellees have paid the debt of another, which in good conscience should have been paid by the latter. The appellees purchased under an order of the court which expressly provided that the involved taxes were a lien not excepted as an encumbrance on the realty. Therefore, appellees bid in the property and bought the same subject to the encumbrance of the tax lien. They bought it at a judicial sale and their purchase thereat was subject to the rules and principles applicable to such sales. Our Supreme Court, many years ago, by adoption, lent expression to the law with reference to judicial sales, in the case of Seamans v. Harvey (1876), 52 Ind. 331, 333, 334.
To an action for money had and received and for work and labor performed, the appellant, in that case, answered, in the fourth paragraph, that he purchased the real estate of the appellee at a sheriff’s sale, on foreclosure decree; that the real estate was encumbered by the lien of unredeemed taxes which appellee had failed to pay; that to prevent the sale of the land appellant paid the taxes; and he offered to set the same off against appellee’s claim. There was no warranty in the mortgage, nor any contract by the mortgagor to pay the taxes. The error assigned was the sustaining of a demurrer to the answer.
The court quoted from the work of “Mr. Rorer” on judicial sales as follows:
“It is a well settled principle that in judicial sales there is no warranty. This principle, as a general rule, holds good as to all those sales of real property (they being in character judicial sales) made in equitable proceedings, under the direction and control of the courts, usually de*394nominated mortgage sales, guardian’s, executor’s, and administrator’s sales, sales for enforcement of vendor’s and statutory liens, and sales in proceedings for partition. In short, in all sales made under supervision and control of the courts on decrees in equity or on decrees made in the exercise of equity powers, there is no warranty; the purchaser takes what he gets. The officer, trustee, or person executing the deed is the mere ‘agent or instrument’ of the court; is not liable for defect of title or insufficiency of the proceedings; nor at all, except for fraud, unless he conveys with warranty, and then the covenant of warranty binds him personally and him only.” (Our emphasis.)
The court then made its own declaration on the subject, apropos here, and finished with these words:
“. . . but having purchased the land with the incumbrance upon it, it may be presumed that he (the appellant) took the incumbrance into account in determining the amount he would pay, and that he bought the land with the understanding that he would have to discharge the incumbrance in addition to the amount bid by him at the sale of the premises.”
It seems to us that the circumstances and conditions surrounding appellees’' bid for and purchase of the real estate at the executor’s sale were such as not to call' for the application of the principles of the equitable doctrine of subrogation but rather, that said circumstances encompass appellees within the rules laid down in the Seamans case, supra. It can be said upon the record that appellees bought the land with the understanding that they would have to pay the taxes in addition to the amount of their bid therefor. Upon the same consideration, all other potential bidders would be held to possess a like understanding. But appellees now seek to circumvent the equality of the basis for such bids by an after affirmed provision of the will, which asserted provision, prior to and during the entire proceedings leading to and *395the sale of the real estate to appellees, was a matter of public record and notice to appellees of the contents thereof. Such facts seem impotent to support a conviction that “clean hands” tendered the entreaty for the interposition of equitable substitution.
Lastly, appellees urge that we erred in holding that when, under the facts and circumstances set forth in the original opinion, they purchased the real estate without objection to the sale and accepted their deeds without protest upon any ground, such conduct would seem to constitute a waiver by them of any right they. may have possessed to insist upon their construction of the executor’s duty, under the will. They iterate the same contention made originally, namely, that the court had a duty to construe decedent’s will and to hold that appellees had waived their rights would deprive the court of its power of judicial construction. But the referred to waiver extends to any claimed rights of appellees and does not have any reference to or aifect upon the judicial powers of the court. We iterate what we stated in the challenged opinion, to-wit: that “It may be that the court in a proper action for such purpose would be authorized to construe any ambiguous provision of the will, but we are at loss to comprehend upon what basis the court can permit improper claims against an estate upon the theory of construing the will.”
The petition for a rehearing is denied.