Court Opinion

ID: 7062249
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:22:06.575724+00
Date Added: 2024-06-11T16:12:13.553689
License: Public Domain

On Petition for Rehearing.
Black, C. J. — In the brief of counsel for the appellee on petition for a rehearing we are told that in the original draft of the answer it was alleged that Castor sold and conveyed to the appellee “by deed of general warranty,” and that in the answer in the record the words quoted were inadvertently omitted by the stenographer or clerk; and counsel say that the averment was so made because it was a correct statement of the fact. Very properly, it is not claimed that we can treat the transcript otherwise than as a true copy of the record, or that the mistake of the copyist can be corrected on petition for a rehearing. While we adhere in all respects to our former opinion, we think it perhaps not improper, in view of this statement of counsel that we should decide the question which must inevitably come before the trial court.
When Castor conveyed lot B to the appellants, having previously conveyed lot A by deed of general warranty to the appellee, the appellants acquired as against the appellee only the rights which Castor retained after the conveyance to the appellee. The equities of the purchasers of the parcels were not equal. The subsequent purchaser could not call upon the prior purchaser for contribution. If the party primarily liable had discharged the encumbrance which rested on both lots he could not claim contribution from the party secondarily liable. Henderson v. Truitt, 95 Ind. 309; Merritt v. Richey, 97 Ind. 236; Richey v. Merritt, 108 Ind. 347; Aurora Nat. Bank v. Black, 129 Ind. 595; Britton v. Updike, 3 N. J. Eq. (2 Green), 125. When the appellants purchased lot B from the judgment defendant, they took it, chargeable with the judgment, in preference to lot A, already conveyed with warranty to the appellee, which was only bound to supply any deficiency after exhausting lot B. The *202appellants took lot B with all its equitable burdens. Clowes v. Dickenson, 5 Johns. Ch. 235; Jennings v. Moon, 135 Ind. 168; Judson v. Dada, 79 N. Y. 373.
In McCreery v. Day, 119 N. Y. 1, 23 N. E. 198, it was said: “Courts of equity often interfered by injunction to restrain proceedings at law to enforce judgments, covenants, or obligations equitably discharged by transactions of which courts of law had no cognizance. (2 Story Eq. section 1573.) It is a necessary consequence of our changed system of procedure, that whatever formerly would have constituted a good ground in equity for restraining the enforcement of a covenant, or decreeing its discharge, will now constitute a good equitable defense to an action on the covenant itself.”
It is a leading feature of our code that all matters in dispute between the plaintiff and defendant, and relating to the same subject, may be litigated and settled in one action. Vail v. Jones, 31 Ind. 467. In this State, under our code, an equitable defense may be set up to a legal claim, and where a party is seeking to enforce an asserted right under a legal form, equity will give the same protection to equitable rights that theywould receive if the proceedings were under equity forms, and equity can be invoked under all circumstances where an equitable right calls for protection or enforcement. Troost v. Davis, 31 Ind. 34.
If the judgment lien had been enforced while the appellee was the owner of lot A, and while his grantor or the appellants still owned lot B, the appellee would have been entitled to have the judgment debt paid by the sale of lot B, the value of which exceeded the amount of the debt, and the owner of lot B would not have been entitled to any contribution from the appellee. When the appellee, by his warranty deed, conveyed lot A to the appellants, there was existing an equitable obligation upon the latter as the owners of lot B to discharge the lien upon the two lots. The appellants were already subject to this burden before they became the owners of lot A. The judgment was only a secondary lien on lot A, *203•while it was a primary lien on lot B. The appellee’s covenants in his warranty deed did not cover the lien of the judgment except as a secondary lien, the primary lien resting on lot B. As between the appellants and the judgment creditor, the two lots, while owned by the appellants, were subject alike to the lien of the judgment, yet, as between the appellants and the appellee, the judgment continued to be a primary lien on lot B, and a secondary lien on lot A, and the appellee continued to possess the equitable right to have lot B exhausted before resort to lot A; that is, the appellee’s covenants only extended to loss that might be suffered'by the appellants through such a secondary resort to lot A. The appellants, thus owning the two lots subject to the one lien, conveyed lot B by warranty deed to Moss. Under the equitable rule mentioned in our original opinion Moss had the right as against his immediate grantors and the judgment creditor to have the parcel still owned by the appellants subjected to sale under the judgment and exhausted before resort to his parcel. The appellants were under obligation on their warranty deed to Moss to save him harmless from the judgment lien. While nothing had occurred to change the eqrdtable rights of the appellee, as between him and the appellants, he had no right to claim as against Moss, that lot A should npt be first exhausted before resort to lot B. But the appellee had been deprived of such right by the act of the appellants in conveying to Moss the parcel, which, as between the appellants and the appellee, was primarily liable. By their own act and for their own advantage, the appellants reversed the priority. They put it out of the power of the appellee to intervene and procure the exhaustion of lot B before resort to lot A. Indeed, it must be considered that the appellants were under obligation to save Moss from the enforcement of the lien upon lot B, and the appellee from any loss through its enforcement on lot A if lot B was worth more than the judgment lien. The appellants are in the condition, so far as the appellee is concerned, in which they *204•would have been if they had discharged their obligations to Moss by paying off the lien with money and retaining lot A.
The appellee was not bound to initiate any proceeding to prevent the result which accrued. He could no>t have prevented it by any proceeding he might have brought, and he had no interest in doing so. He is entitled to set up the equitable defense in this action. The petition for a rehearing is overruled.