Blakemore v. Taber's

Perkins, J. Suit for rent, and to enforce a lien for its payment. Judgment below for plaintiffs. The suit was commenced in 1859. On the 3d of April, 1857, Hamilton and Taber made a com — 467 — tract in writing, leasing to one Shoobridge, a certain quantity of land adjoining Taberville, Indiana, for a term of seven years, upon the conditions that said Shoobridge erect on the land certain buildings, and carry on in them certain kinds of manufacturing, and that he should pay the taxes on said improvements, and should own them and have the right to remove them at the end of the term; and, further, should pay a certain annual rent for the land, to secure the payment of which, the said improvements, to be erected on the land by said Shoo-bridge, were declared, in said lease, to be thereby mortgaged. Hamilton and Taber signed and acknowledged the lease on the 29th day of May, 1857. Shoobridge signed and acknowledged it on the 9th of July, 1857, and it was recorded on the next day, the 10th of July, 1857, in the mortgage record of the county. Henry H. JEuarts was the subscribing witness to the execution of the lease by Shoobridge; and, at the., time the latter executed, and Euarts witnessed it, both expected, as did, also, Hamilton and Taber, that Shoobridge was to be.the owner of the improvements stipulated to be erected, and which were erected in the name of Shoobridge; he appears to have honestly been held out, at the time, as the prospective owner; but an arrangement was made afterwards between him and Euarts, by which his prospective ownership was extinguished, and, as between them, Euarts Recame the owner. This is clearly shown by the evide'nce. Upon the foregoing facts, Euarts, having held out to Hamilton and Taber that Shoobridge Was the proprietor of the lease, buildings, &e., is estopped, as against them, to deny such ownership, and the consequent power in Shoobridge to incumber them by liens; and all persons claiming under or through Euarts, are bound by that estoppel, as to liens created as above, unless they can show fraud, or want of consideration, on the part of Hamilton and Taber, in the transaction. RTo such showing is attempted. — 468 — Hamilton and Taber, then, to the extent that they had the first lien, could enforce it, upon the property specified in the lease, against Huarts and those claiming through him, equally as efficiently as they could have done, had the lease been signed by Huarts himself. It appears that on the 16th of May, 1857, G-. W. Blakemore sold Henry H. Huarts, hereinbefore mentioned, a tract of land, three and a half miles south of Logansjoort, and took his notes for the purchase money. The notes were not paid, and judgment was obtained upon those first due, on the 30th of October, 1857. Execution was issued upon the judgment, and levied upon the property put upon Hamilton and Taber’s land, under the lease above mentioned, as the property of said Huarts•; and the question is, is the property subject to the lien asserted by Hamilton and Taber for rent? If it would be so subject, had the lease been made to, and signed by Huarts, instead of Shoobridge, it is so subject now, because Hamilton and Taber took the lien, such as it is, on the faith of a representation by Huarts to them, that the property belonged to Shoobridge. Suppose, then, the improvements had been made by Huarts, under a parol agreement for such a lease as appears in this case, between him, instead of Shoobridge, on one part, and Hamilton and Taber on the other part; suppose, on the 9th of July, after the improvements had been so erected, such a lien as that actually appearing in this case, had been executed between Huarts and Hamilton and Taber, and had never been recorded, hut that Blakemore, and all under him, had been actually notified of the existence of the lease, and its contents; could Hamilton and Taber have retained.the lien on the property against an execution in favor of Blakemore, on a judgment rendered and execution issued after the full execution and such notice of the lease ? This question is asked upon the hypothesis that the instrument called a lease, in the — 469 — ■case, does not amount, also, to a mortgage. . Story, 2d volume of Eq. Jur., sec. 1231, speaking of equitable liens, says: “Indeed, there is generally no difficulty in equity in establishing a lien, not only on real estate, but on personal property, or on money in the hands of a third person^ wherever that is matter of agreement, at least against the party himself, and third persons, who are volunteers, or have notice; for it is.a general principle in equity, that, as against the party himself, and any claiming under him voluntarily, or with notice, such an agreement raises a trust.” But we shall pass this'point, because we think the lease contains a mortgage by Shoobridye, and by Euarts, through Shoobridge, to Hamilton and Taber of the improvements, &c;, named. It contains this clause: “And for the purpose of securing the prompt payment of the rent, and the punctual performance of the stipulations of this lease, [from Hamilton and Taber to him,] said Shoobridge [said Euarts agreeing thereto,] hereby mortgages and warrants said buildings and machinery to the party of the first part, [said Hamilton and TaJber.J’ . This mortgage clause was signed on the 9th of July, 1857, as we have seen, by Shoobridge, being after the improvements were placed upon the leased premises, was duly acknowledged, and recorded on the next day, the 10th of July. As it was a mortgage by Shoobridge to Hamilton and Taber, the latter properly had it recorded in the book of mortgages. There was where third persons would look for such incumbrances. As to third persons, the case would stand thus. Prima fade, the improvements would belong to Hamilton and Taber, because of their ownership of thé land on which they were situated. On inquiry, it would be found that they were owned by the lessee, but the leasé itself,-which disclosed the lessee’s title, would, also, show the lien of the lessors, and, in — 470 — addition, on examining the mortgage record, it would he again disclosed. The mortgage, then, being valid, Blakemore’s course was to sell, so far as Euarts was concerned, the property covered by it, subject to the mortgage. This follows from the fact that the mortgage was the elder lien. Lord v. Fisher, 19 Ind. 7. See., also, 18 Ind. 250. Our statute treats chattel-mortgages, in this respect, like mortgages upon real estate. 2 G. & H. p. 240, sec. 436. It is objected that the mortgage is void for uncertainty. But when we consider that the property mortgaged was all on the premises of the mortgagees, thus, to .some extent, in their-possession, and that the mortgage covei’ed all the buildings and machinery, which, being, as we have said, on the land of the mortgagees, were thus separated from all other property, and identified; and the further fact that Blake-more, and all others concerned, had notice, &c., we think the mortgage can not be held void, or inoperative as to any of the described property for uncertainty. It is also insisted, that a'suit by foreclosure will not lie upon a chattel mortgage. As our statute places chattel mortgages on the footing of mortgages upon real estate, in this, that it recognizes the legal title, the equity of redemption, as remaining in the mortgagor, and the mortgagee as having but a lien, it follows that a foreclosure is the proper mode of proceedure to enforce the lien, and extinguish the equity of redemption. 3 Wend. 500; 11 Ind. 398; 13 Ind. 141; Will. on Per. Prop, side p. 45; Same on R. Prop., do. 357. See, as bearing on this case, Chandler v. Caldwell, 17 Ind. 256. Also, see 14 Ind. 231; 5 id. 293; 2 id. 663; 7 Blackf. 284; 8 id. 420, 1 Ind. 356; Ind. 319; 2 Story s Rep. 630; Smith’s Mer.L. 693. These last citations are upon the power to mortgage property, not in existence at the time. See, also, 8 Ind. 364. In the case at bar, it will he observed, the seven years for — 471 — which the mortgage was to run, had not expired at the commencement or trial of the suit; and surely Blakemore could not complain that the remedy by foreclosure was adopted. And, under our statutes, and upon general principles of equity, we see no reason why the general rules of foreclosure, as to mortgages, should not be applied in cases of chattel mortgages. See 2 Hill, on Mort., pp. 346, 478, 504, as to chattel mortgages. L. Chamberlain and George W. Blakemore, for the appellant. D. D. Pratt, for the appellees. But it further follows, from the above propositions, that in selling the mortgaged property, on Hamilton and Taber’s .judgment of foreclosure, on failure of Blakemore, or others interested, to pay the money found due on it, the Court, or sheriff, might cause such part of that property as had not been sold, or incumbered by later mortgages, to third persons, to be first disposed of. Aiken v. Bruen, 21 Ind. 137. Per Curiam. The judgment below is affirmed, with costs.