Williams v. Lyddick

Crumpacker, J. The major question presented by this appeal is whether a writ of execution, as provided by § 2-3301, Burns’ 1933, § 523, Baldwin’s' 1934, will issue on a joint and several judgment in personam against a husband and wife after the lapse of more than *208 10 years from the date of its rendition and notwithstanding the separate discharge in bankruptcy of both husband and wife after the entry of such judgment but before the issuance of the writ of execution was sought. The court below concluded it would and entered judgment ordering the issuance of such a writ after a hearing on the issues joined by the appellees’ written motion that the writ issue and the appellants’ answer thereto. The evidence was wholly by stipulation and document and indicates that on July 11, 1928, the appellants were and still are husband and wife and on said date they took title to certain real estate in the city of .Gary, Indiana, as tenants by entireties." That at the time they so purchased said real estate it was encumbered by a first mortgage in the sum of $50,000.00 to the Bankers Trust Company, Trustee, and a second mortgage in the sum of $15,000.00 to the American State Bank, Trustee, both of which mortgages were duly recorded and the conveyance to the appellants was made subject thereto. As a part of the purchase price the appellants signed two promissory notes totalling $21,133.96 payable to their own order and by them endorsed and delivered to Peo-' pie’s State Bank of Crown Point, Trustee, and secured the same by a third mortgage on said real estate. On February 17, 1931, the People’s State Bank of Crown Point, Trustee, filed its complaint in the Lake Superior Court on the first of the two mortgage notes above mentioned and on June 18, 1931, said court rendered judgment against both appellants in the sum of $21,000.00 plus $1,500.00 attorney’s fees and in favor of the People’s State Bank of Crown Point, Trustee. Whether the appellants had lost the real estate securing said note through foreclosure of prior liens or had no equity over and above such liens, does not appear but, however that may be, People’s State Bank of Crown *209 Point, Trustee, did not seek the foreclosure of its mortgage and its complaint was on the note alone. It sought a judgment in personam against the joint and several makers of the note and relief was granted accordingly. On January 10, 1933, the appellant Floyd E. Williams was adjudicated a bankrupt and the following August 22, he was duly discharged. On May 25, 1934, the appellant Flossie C. Williams was adjudicated a bankrupt and was duly discharged on the following October 25.. The order of discharge in each instance recited that the bankrupt was discharged from all provable debts and claims existing on the date of the filing of his petition for .adjudication.'. On April 10, 1944, People’s State Bank of Crown Point, Trustee, filed a motion in the Lake Superior Court for a writ of execution on its judgment of June Í8, Í931, and on October 17, 1944, the appellees, upon representation that they had succeeded to ownership of said judgment, were substituted as the moving parties. It is the judgment on this motion, granting the relief sought,that is now before us for review. It cannot be questioned, we think, that the appellees’ claim, predicated upon the several liability of each of the appellants by reason of said judgment, was provable in the respective bankruptcy proceedings of each on the day each petition for adjudication was filed. It is not’ contended that said judgment was then a lien on any real estate or chattels real belonging to either appellant or to both of them as tenants by entireties. No execution, up to that time, had been issued and placed in the hands of the sheriff and so no lien on personal property, was in existence. It follows, therefore, that the appellees’ claim against each appellant severally was de *210 stroyed as a legal obligation by the court’s final order of discharge. The writ authorized by the judgment in this case is a general execution against the joint and several property, real and personal, of the appellants as provided by § 2-3301, Burns’ 1933, § 523, Baldwin’s 1934. It is in the nature of a fieri facias at common law, which was the ordinary writ for the seizure and sale of the property of a judgment debtor under execution. 21 Am. Jr. Executions, § 17, p. 25. It authorizes the seizure and sale of the individual and several property of the appellants, acquired since their discharge in bankruptcy, notwithstanding the fact that the appellees’ claim against each of them individually had been fully discharged as a legal obligation before such writ was issued or applied for. Irwin v. Scotten Adm’r. (1872), 49 Ind. 389, 397; Sharpe v. Baker (1912), 51 Ind. App. 547, 568, 96 N. E. 627, 99 N. E. 44; Drake v. Murphy (1873), 42 Ind. 82; 33 C.J.S. Executions, § 38, p. 171; 21 Am. Jr. Executions, § 385, p. 189. We are aware that the Supreme Court has held that the immunities that accrue to bankrupts by reason of their discharge do not protect a bankrupt husband and wife against seizure and sale of entirety property in satisfaction of a joint judgment when the particular entirety property so seized constituted the basis for the credit extended to such husband and wife when the joint debt represented by the judgment was created. First Nat. Bank of Goodland v. Pothuisje (1940), 217 Ind. 1, 25 N. E. (2d) 436. We are further aware that the Supreme Court has said that the lien of a joint judgment, which has attached to entirety property, is not destroyed by the individual discharge in bankruptcy of both the husband and wife. Echelbarger v. First Nat. of Swayzee (1937), 211 Ind. 199, 5 N. E. (2d) 966. *211 Neither of these decisions, however, can be construed to hold that the individual property of a husband or wife, each of whom has been discharged in bankrupty, can be seized and sold to satisfy a joint judgment against them in personam. In fact these holdings are quite the contrary and in each of them there is recognition of the principle that the individual discharge in bankruptcy of a husband and wife destroys the personal and several liability of each of them arising out of a joint judgment. It is clear to us that the lower court exceeded its power when it authorized the issuance of an execution under the direction of which the sheriff of Lake County can seize <<md sell the individual property of either or both of the appellants and therefore the judgment herein is contrary to law. There are other questions involved in this appeal but in view of the position we have taken on the question here discussed they become immaterial: Judgment is reversed with instructions to overrule the appellees’ motion for leave to issue execution. Draper, C. J., not participating. Note. — Reported in 61 N. E. (2d) 186.