Seiler v. Northern Bank

5 S.W. 536, 86 Ky. 128, 1887 Ky. LEXIS 121
CourtCourt of Appeals of Kentucky
DecidedOctober 4, 1887
StatusPublished
Cited by10 cases

This text of 5 S.W. 536 (Seiler v. Northern Bank) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Seiler v. Northern Bank, 5 S.W. 536, 86 Ky. 128, 1887 Ky. LEXIS 121 (Ky. Ct. App. 1887).

Opinion

JUDGE HOLT

delivered the opinion of the court.

Charles Geisbauer died heavily indebted, and the ■owner of a large brewery. In order to prevent its .sale at the suit of creditors, his executor and devisees .•applied to the appellee, the Northern Bank of Kentucky, for a loan, to be secured by a mortgage on the property. It was refused.

T Subsequently the property was conveyed to the bank by the widow, heirs and executor for the consideration of sixty thousand dollars by a deed absolute in form. ‘.Simultaneous with this conveyance the appellee sold ;and agreed to reconvey it to Louis Geisbauer, a son ■of the decedent, for one hundred and seventy-seven thousand seven hundred and forty dollars, upon long •credit, and in payments, with the stipulation that if any of the notes were not paid at maturity the entire purchase money should, at the election of the bank, become due. The debts of the father were paid with the money thus obtained, including a large one to the [130]*130bank. For the greater portion of the purchase-money Lonis Geisbauer gave bis individual notes to the bank ; but for the balance of it he executed notes with the-appellants as his sureties. By reason of default of' payment of one of them this action, seeking a personal judgment and the enforcement of a vendor’s-lien, was brought upon all of the unpaid ones, all of the appellants being made parties to the action.

Other creditors of Louis Geisbauer brought suit and. attached certain property upon the brewery premises, claiming that it was not covered by the lien of the-bank, and that it had been obtained by Louis Geisbauer subsequent to his purchase of the bank. These creditors, or some of them, also made themselves parties to this suit, and insisted that the agreement, first between the widow, devisees and executor of CharlesGeisbauer and the bank, and then between the latter and Louis Geisbauer, was, in fact, but a mortgage, and should be regarded as one transaction. All the suits were consolidated, and a considerable litigation followed between the bank and the attaching creditors,. hut to which the present appellants were parties.. By consent, all of the property was sold, the proceeds-to be the subject of the litigation. The lower court held that the transactions between the Geisbauers and the bank constituted only a mortgage, and allowed the attaching creditors six thousand two hundred and ninety-two dollars out of the fund in court, upon the-ground that this much of it had been realized by the sale of property upon which the bank had no lien.

From this judgment the bank appealed to this court,. [131]*131Its opinion in the case may be found in 83 Ky., page 154 (Northern Bank of Ky. v. Deckebach, &c.) It held that the purchase by the bank and then the sale to Louis Gfeisbauer were absolute sales, and that they did not constitute a mortgage; but affirmed the judgment of the lower court, inasmuch as it afforded no relief, save it gave a portion of the fund in court to the attaching creditors, which, in the opinion of this court, was right. The present appellants were parties to that appeal. Upon the return of the cause the lower court rendered a judgment against the appellants for the amount of the notes sued upon, less the fund left from the sale of the property after the payment of the six thousand two hundred and ninety-two dollars to the attaching creditors ; and of this they now complain, the principal ground of complaint being that the transfer to the bank and then by it to Louis Greisbauer was but a mortgage and not an absolute sale.

The doctrine is well settled that a conveyance absolute in form may be shown by parol evidence to be but an equitable mortgage. In fact, courts lean to this conclusion in doubtful cases. The question in this case is, however, res judicata. This court, upon the former appeal, passed upon it.

It is urged that the appellants were merely nominal parties to it; that no error was assigned as to them; that the then controversy was between the attaching creditors and the bank, and that the appellants were not interested in it. The latter part of this statement is certainly incorrect. The bank was asserting a vendor’s lien. The attaching creditors denied this, and claimed that it had but a mortgage [132]*132lien. If so, it was open to defenses not available as against a vendor’s lien. The appellants were certainly interested in this issue. If the attaching creditors succeeded as to it, then the liability of the appellants might be decreased. It was exactly the issue which they now present; and when presented before, although .by other litigants, yet they were then parties to the ■action and interested in the determination of this issue. 'The character of the lien of the bank and what it embraced was in question. The appellants were not only interested in having it declared to be a mortgage lien only, because this was likely to lessen the debt, bnt also in defeating the claim of the attaching creditors, as the entire fund would then be applied in payment of the liability of the sureties..

The actions were consolidated; and a party to one of them was required to notice, and was bound by all that was done in each and all of them. The law looks approvingly toward the end of a litigation. It will not, therefore, permit a party to a suit to lie by while another makes a question in which he is interested, and then say that he is not concluded by it. In this instance, upon the former appeal, one of the errors assigned by the bank was that the lower court had held the transaction to be a mortgage instead of an absolute sale.

One other question remains to be considered.

After the determination of the former appeal, the lower court at its October term, 1885, rendered a judgment against the appellants for fifteen thousand three hundred and sixty-eight dollars, with interest from April 17, 1880, which was the date of the sale of the [133]*133property. This amount appears to have been arrived at by first deducting from the proceeds of the sale the six thousand two hundred and ninety-two dollars allowed the general creditors, and seven hundred and fifty dollars for the master commissioner. The remainder was then applied first to extinguish the individual notes of Louis Geisbauer, and then as a credit on the unpaid notes of the appellants.

At the same term of court that this judgment was rendered the appellants, save Louis Geisbauer, moved to correct it. The motion gave no 'reason or grounds for doing so. The entry of record is simply that they moved to correct it. The bank in no way entered its appearance to it, nor did the court act upon it at that term. There was no order continuing the motion or reserving it for further consideration, or suspending the judgment. At the next term of the court it rendered what was termed “ a corrected judgment” against the appellants for the sum of eleven thousand seven hundred and twenty-six dollars and fifty cents, with interest from that time until paid. We do not see how this result was reached ; but as this record stands it is immaterial. The appellants have appealed from both judgments, while the appellee, by a cross-appeal from the last one, insists that the first judgment must be upheld. This involves the right of the court to render the last one.

It is said, arguendo, that the power of the court over the first judgment expired when the term ended at which it was rendered, and that the motion to correct it then died.

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Bluebook (online)
5 S.W. 536, 86 Ky. 128, 1887 Ky. LEXIS 121, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seiler-v-northern-bank-kyctapp-1887.