Ellis v. Cole

Stover, J.: The plaintiff is the father of the defendants. Plaintiff was the owner of a farm and, at the time of the making of the contract under which the cause of action arises, had a life estate in a house and lot, the estate in remainder being in the defendants. At the time of making the contract there was a mortgage of $2,000 upon the farm. On the 5th of March, 1894, the contract in question was entered into between the plaintiff and the defendants, by which the plaintiff ■conveyed the farm and the house and lot to the defendants, the [50] defendants agreeing to pay from time to time, as collected or received by them, the rents and profits of the premises conveyed, after deducting therefrom the interest on the $2,000 mortgage,-and taxes and expenses of all kinds incurred in the care, preservation and management of the premises. It was further agreed that in case the premises should be sold the moneys should be applied in payment of the $2,000 mortgage, or be invested in bond and mortgage,, and the interest paid for the maintenance and support of the-plaintiff. The defendants sold the house and lot for $1,900, and on March 28, 1896, took up the mortgage on the farm with the purchase-money of the house and lot, and by the additional 'payment of $100 by the defendants the mortgage was satisfied and discharged of record. After the conveyance of the farm and the house and lot by the-plaintiff to the defendants, an action was commenced in the Supreme Court by a creditor of the plaintiff to set aside the conveyance from, the plaintiff to the defendants as in fraud of creditors. A decree was entered in that action in February, 1899, in and by which a receiver of the rents and profits of the premises was appointed, with direction to receive the income to which the plaintiff in this-action was entitled, and further directions as to the disposal of funds which might come into his hands as the proceeds of the life-estate of the plaintiff herein. The decree further directed that said receiver should pay to Ida Hutches and Polly Cole, the defendants, in this action, the interest upon the $2,000 invested by them in the bond and mortgage, or the legal rate of interest; the adjudication thereby being, necessarily, that these defendants, and not the plaintiff here, were entitled to the interest upon the $2,000 represented by the bond and mortgage. This action is brought to recover the interest upon the $2,000-mortgage for six years from April 1, 1898, being the sums paid to defendants by the receiver under the decree in the creditor’s action. A summary of the situation at that time was this : The property having been disposed of under the contract, the question then arising between the plaintiff here and his creditor, it was adjudicated that the plaintiff here or his judgment creditor were not entitled to the interest upon the bond and mortgage, but that these defendants, [51] had become the owners, and entitled to the interest or income arising from the bond and mortgage. The court in that action must have necessarily found that the plaintiff here was not the owner of the proceeds of the mortgage, and that his daughters, the defendants here, were such owners, in order to have decreed in the creditor’s action that the defendants were entitled to the interest on the bond and mortgage. This decree, we think, was binding upon all of the parties, and was a final and complete adjudication of their rights in the property in question. They were all parties to the record, and a complete adjudication was had as to the ownership of the fund now brought in question in -this action. This plaintiff may perhaps have been willing that in that action the title should have been adjudged to be in his daughters and thus prevent the payment of the claim of his creditor; but whether willing or otherwise the adjudication was definite and binding upon all of the parties to the action. The decree was properly pleaded and proven and, we think, it was a complete bar to the maintenance of this action, and the complaint should have been dismissed upon the merits. Spring, J., concurred ; McLennan, P. J., and Williams, J., dissented.