Evans, Adm'r, et al. v. Pence. No. 7939. EVANS, ADM'R, ET AL. v. PENCE. MORTGAGE.- Foreclosure.- Decedents' Estates.-Heirs.-Consideration.- Pre- SAME.-Existing Indebtedness.-Privity.--An existing indebtedness is a suffi- From the Warren Circuit Court. NEWCOMB, C.-This was an action by the appellee against the heirs and administrator of George Pence, deceased, to foreclose two mortgages executed by said George in his lifetime to the appellee. Both mortgages were upon the same tract of land, but were given at different dates. The first was to secure six promissory notes of said George, payable to the appellee, all of which were past due when the mortgage was executed. The second mortgage was to secure six additional notes, and also the notes mentioned in the first mortgage. Each mortgage contained a promise to pay the several notes secured thereby. The administrator answered that the mortgages were given and executed without any consideration whatever; that the estate of George Pence was insolvent, and that to pay his debts it would be necessary to reduce all of said real estate to 78 439 129 367 78 439 133 281 Evans, Adm'r, et al. v. Pence. assets for that purpose. Also that the mortgages were not recorded within forty-five days after their execution, nor until after the death of said mortgagor. The record does not show that any reply was filed to these. answers, but, as the parties proceeded to trial upon them, they are to be deemed controverted as though a formal denial had been filed. The cause was tried by the court, which found for the plaintiff, and rendered judgment of foreclosure accordingly, over a motion by the defendants for a new trial. Two facts present the only questions discussed by the appellants, viz.: 1. That the mortgages were given to secure pre-existing debts, there being no new consideration therefor. 2. That the estate of George Pence was insolvent. On these grounds the appellants ask for a reversal of the judgment. Their argument against the validity of the mortgages is based on the doctrine asserted in Busenbarke v. Ramey, 53 Ind. 499, Gilchrist v. Gough, 63 Ind. 576, and other like cases, to the effect that one who takes a mortgage or collaterals to secure an antecedent debt, is not a purchaser for value as that term is used in the law, and that he takes such security subject to all outstanding equities, and to the equities of subsequent bona fide purchasers or encumbrancers, without notice. But this rule is for the protection of the rights of third persons. As between debtor and creditor, it does not invalidate securities executed by the former. The existing indebtedness is a sufficient consideration to support the mortgage as between mortgagor and mortgagee. Jones Mortgages, sec. 611; Cooley v. Hobart, 8 Iowa, 359; Usina v. Wilder, 58 Ga. 178; Moore v. Fuller, 6 Oregon, 272; Jewett v. Warren, 12 Mass. 300. It was held by this court in Work v. Brayton, 5 Ind. 396, Nutter v. Harris, 9 Ind. 88, Wright v. Bundy, 11 Ind. 398, Evans, Adm'r, et al. v. Pence. McMahan v. Morrison, 16 Ind. 172, and Babcock v. Jordan, 24 Ind. 14, that a precedent debt constitutes a valid consideration for a conveyance or mortgage. The doctrine announced in those cases has been modified by the subsequent cases of Busenbarke v. Ramey and Gilchrist v. Gough, supra, in favor of the equities of third parties; but we do not understand these later cases to hold that a debtor may avoid a conveyance or mortgage given for an antecedent debt, or if he has endorsed notes to his creditor as collateral security for a preexisting debt, that he may at pleasure repudiate the transaction and reclaim such collaterals. See also Robertson v. Cauble, 57 Ind. 420. The administrator of George Pence was in privity with him by representation, and the mortgage was valid against him and the heirs of the decedent, if obligatory upon the latter in his lifetime. The fact that the estate of the decedent was insolvent could make no difference. The statute does not invalidate mortgages for that reason; on the contrary, it makes them preferred debts as to the personalty. 2 R. S. 1876, p. 534, sections 108, 109. Nor did the failure of the mortgagee to record her mortgages within the statutory period furnish any defence to the appellants. Such failure would avoid the mortgages only as to subsequent purchasers, lessees or mortgagees in good faith and for a valuable consideration. 1 R. S. 1876, p. 365, sec. 16. We find no error in the proceedings of the circuit court, and its judgment should be affirmed. PER CURIAM.-It is therefore ordered, on the foregoing opinion, that the judgment below be, and it is hereby, in all things affirmed, at the costs of the appellants. The American Insurance Company of Chicago v. Pressell. No. 7117. THE AMERICAN INSURANCE COMPANY OF CHICAGO v. PRESSELL. INSURANCE.-Promissory Note.-Fraud.-False Representations.-Pleading.In an action by an insurance company upon a promissory note, given for premiums on insurance, an answer is good which avers false representations of existing facts affecting the responsibility of the company and its ability to fulfil its contracts, made by its agent as to matters presumed to be within his knowledge, and of which the defendant was ignorant, whereby the defendant was injured. SAME.-Foreign Insurance Company.—Evidence.—A foreign insurance company furnished to the Auditor of State a statement substantially as required by statute. The copy of its charter was furnished as a separate paper, and not embraced as the fourteenth item of the statement, as section 3765, R. S. 1881, specifies. This was accepted by the auditor as sufficient. The auditor's certificate of authority and copy of statement recited that a copy of the charter was filed, and this was filed by the company's agent in the clerk's office, without a copy of the charter. Held, that a premium note taken for insurance made in the county was not, for this cause, void. From the Henry Circuit Court. M. E. Forkner and D. W. Kinsey, for appellant. BICKNELL, C. C.-This was an action by the appellant against the appellee on a promissory note given for insurance and payable in yearly instalments. The note was to become wholly due if any of said instalments should remain due and unpaid for thirty days after notice given of the maturity thereof. The complaint averred the making of the note and contract, and that three of the instalments were not paid, whereof notice was duly given, whereby the entire note became due. A copy of the note and a copy of said notice and a copy of the appellant's charter, which was made a part of the contract, were parts of the complaint. The appellee answered in eight paragraphs, to all of which, except the sixth, seventh and eighth, demurrers were sustained; demurrers to the sixth, seventh and eighth, for insufficiency of facts, The American Insurance Company of Chicago v. Pressell. were overruled; to these rulings the appellant excepted, and then replied in denial of the sixth, seventh and eighth defences. The issues were tried by the court, and there was a finding for the appellee. The appellant's motion for a new trial was overruled; judgment was rendered upon the finding, and this appeal was taken. Errors are assigned in overruling the demurrers to the sixth, seventh and eighth defences, and in overruling the motion for a new trial. The error assigned as to the sixth defence is not alluded to in the appellant's brief, and is therefore regarded as waived. The seventh and eighth defences were good. They averred false representations of existing facts relating to the condition and business of the insurance company, which facts affected the responsibility of the company and its ability to fulfil its contracts. Burt v. Bowles, 69 Ind. 1; Reagan v. Hadley, 57 Ind. 509. And such representations were made by the agent of the appellant of matters presumed to be within his knowledge, and of which the appellee was ignorant. Shaeffer v. Sleade, 7 Blackf. 178; The State v. Holloway, 8 Blackf. 45. And each of the defences avers an injury sustained by reason of the false representations. Sieveking v. Litzler, 31 Ind. 13. There was no error in overruling the demurrers to the seventh and eighth defences. As a cause for a new trial, it is alleged that the finding of the court is not sustained by the evidence and is contrary to law. The point is made that the statement filed by the appellant's agent in the clerk's office of Henry county, under section 1 of the act of December 21st, 1865, in relation to foreign insurance companies, 1 R. S. 1876, p. 594, did not contain a copy of the act of incorporation of the appellant's company. It was held in The Rising Sun Insurance Co. v. Slaughter, 20 Ind. 520, that, under the act of June 17th, 1852, 1 G. & H. 272, a policy of insurance negotiated in this State by a foreign insurance company, or its agent, without a previous compliance with the requirements of that act, was void. |