Petition for Writ of Certiorari — Overmyer v. Meeker

Supreme Court brief1996

Ask Donna

What actually matters in this document.

Text

Sopreme Gourt, U.S. , \

FILED (J)

86 581 SEP 30 19%

Docket No: gffici vi itt CLERK

SUPREME COURT OF THE UNITED STATES

October Term 1996

John W. OVERMYER and

Elizabeth Overmyer,

Appellants,

)

Vv. )

) On Petition for

Ivan MEEKER, Executor ) Writ of Certiorari

of the Estate of ) to the Court of

Arthur C. Meeker, ) Appeals of Indiana

Deceased; National ) (Cause No:

City Bank, Indiana, ) 91A04-9412-CV-488)

Crop Fertility )

Specialists, Kerlin )

Elevator, and Lincoln )

National Life )

Insurance Co., )

Appellees. )

PETITION FOR WRIT OF CERTIORARI

James P. Buchanan

209 West North Street

P. QO. Box 684

Lebanon, IN 46052

(317) 482-0203

ATTORNEY FOR APPELLANTS

i Pr F eview

I. Is Indiana’s statutory scheme

for the discharge of executors of

insolvent estates repugnant to the

Fourteenth Amendment because the

statutory option to judicially settle

accounts without notice is not

"...reasonably calculated, under all

circumstances to apprise..." unsecured

creditors of the pendency of the final

proceeding and "...afford them an

opportunity to present objections," to

the classification of other creditors as

secured and entitled to preferential

payment, Mullane v. Central Hanover Bank

& Trust, 339 US 306, 94 L.Ed. 865, 70

S.Ct. 652 (1950)?

II. Should this Court’s opinion in

United States V. Daniel Good Real

Property, US 114 S.Ct. 492, 502, 126

L.Ed.2d.490 (1993) be applied to hold a

statutory ex parte judicial

determination of a creditor’s

entitlement to preferential payment out

of an insolvent estate insufficient to

protect unsecured creditors’ rights to

ownership of the money paid?

(B)

List of Parent Companies and

Nonwholly Owned Subsidiaries

Appellee-parent - Crop Fertility

Specialists, Inc.

ey on oe ee ee gree

Subsidiaries:

Crop Fertility Specialists of Urbana,

Indiana, Inc.

Crop Fertility Specialists of Winamac,

Indiana, Inc.

Crop Fertility Specialists of Bourbon,

Indiana, Inc.

Appellee-parent - The Lincoln National

Life Insurance Company

Subsidiaries:

Lincoln National Corporation

Indiana - Holding Company

American States Lloyds Insurance Company

Lloyds Plan - Texas - Property/Casualty

Aseguradora InverLincoln, S.A. Compania

de Seguros y Reaseguros, Grupo

Financiero InverMexico

49%-Mexico-Life, Property & Casualty

Insurance

LineAm Properties, Inc.

50%-Delaware-Real Estate Investment

Corporate Agencies: Lincoln Financial

Group, Inc. (LFG) has been subsidiaries

of which LFG owns from 80-100% of the

common stock. These subsidiaries serve

as the corporate agency offices for the

marketing and servicing of products of

the Lincoln National Life Insurance

Company. Each subsidiary’s assets are

less than 1% of the total assets of the

ultimate controlling person.

Delaware International Advisers Ltd.

81.1%-England-Investment Advisor

Delaware International Advisers Ltd.

18.9%-England-Investment Advisor

Lincoln National Mezzanine Fund, L.P.

50%-Delaware-Mezzanine Financing Limited

Partnership

Lincoln National Underwriting Services,

Ltd.

90%-England/Wales-Life/Accident/Health

Underwriter

(Remaining 10% owned by Old Fort Ins.

Co. Ltd.)

Servicios de Evaluacion de Riesgos, S.

de R.L. de C.V.

51%-Mexico-Reinsurance Underwriter

(Remaining 49% owned by Lincoln National

Corp.

CL CR Management Ltd.

50%-England/Wales-Administrative

Services

Lincoln National Underwriting Services,

Ltd.

10%-England/Wales-Life/Accident/Health

Underwriter (Remaining 90% owned by

Lincoln Nat’l. Reinsurance Co.)

Servicios de Evaluacion de Riesgos, S.de

Iil

8.2: Ge Sev:

49%-Mexico-Reinsurance Underwriter

(Remaining 51% owned by Lincoln Nat’l.

Reinsurance Co.)

ance are

LINCOLN FINANCIAL GROUP, INC.

CORPORATE AGENCY SUBSIDIARIES

Lincoln Financial Group, Inc: (AL)

Lincoln Southwest Financial Group, Inc.

(Phoenix, AZ)

Lincoln Financial and Insurance Services

Corporation (Walnut Creek, CA)

California Fringe Benefit and Insurance

Marketing Corporation DBA/California

Fringe Benefit Company (Walnut Creek,

CA)

Colorado-Lincoln Financial Group, Inc.

(Denver, CO)

Lincoln National Sales Corporation of

Connecticut (formerly: The Lincoln

Financial Group, Inc.) (Norwalk, CT)

Lincoln National Financial Services,

Inc. (Lake Worth, FL)

CMP Financial Services, Inc. (Chicago,

IL)

Lincoln National Sales Corporation of

Indiana, Inc. (Indianapolis, IN)

Lincoln Financial Group of Northern

Indiana, Inc. (Fort Wayne, IN)

The Financial Group, Inc. (Mission, KS)

Financial Planning Partners, Ltd.

(Mission, KS)

The Lincoln National Financial Group of

Louisiana, Inc. (Shreveport, LA)

Benefits Marketing Group, Inc. (D.C. &

Chevy Chase, MD)

Morgan Financial Group, Inc. (Baltimore,

MD)

LS ee

Lincoln Financial Services and Insurance

Brokerage of New England, Inc. (formerly

Lincoin National of New England

Insurance Agency, Inc. (Worcester, MA)

Linccin Financial Group of Michigan,

Inc. (Troy, MI)

Financial Consultants of Michigan, Inc.

(Troy, MI)

Lincoln Financial Group of Missouri,

Inc. (formerly: John J. Moore &

Associates, Inc.) (St. Louis, MO)

Financial Associates, Inc. (Omaha, NE)

Beardslee & Associates,Inc. (Clifton, NJ)

Lincoln Financial Group, Inc. (formerly:

Resources/Financial, Inc.) (Albuquerque, NM

Lincoln Financial Grour/Carolinas, Inc.

(Charlotte, NC)

Lincoln Cascades, Inc. (Portland, OR)

Lincoln Financial Services, Inc.

(Pittsburgh, PA)

Lincoln National Financial Group of

Philadelphia, Inc. (Philadelphia, PA)

Cavalier Financial Planners, Inc.

(Philadelphia, PA)

Lincoln Financial Group, Inc. (Salt Lake

City, UT)

Lincoln Financial Services of Virginia,

Inc. (Norfolk, VA) (DBA/Group Concepts

Unlimited)

Appellee, National City Bank, Indiana

Parent - National City Corporation

Subsidiaries:

Bank Service Corporation of Indiana

33.33% - Other Holding Company

M.N.B. Trustee Company (UK) Limited

50% - Pension, Health & Welfare Funds

Appellee, Kerlin Elevator, no parent, no

subsidiaries

(C)

TABLE OF CONTENTS

Questions Presented For Review.

List of Parent Companies and

Nonwholly Owned Subsidiaries.

Table of Cited Authorities.

Citations of Official And

Unofficial Report of The

Opinion of Indiana Court of

Appeals Sought to Be Reviewed

Concise Statement of The Basis

For Jurisdiction in This Court.

Constitutional Provisions and

Statutes Involved In The Case

Statement Of The Case Showing

How And When Federal

Questions Were Raised

Argument

I. Denial Of Opportunity

To Contest an

A.) Property Rights

Protected By

Fourteenth Amendment

B.) Process Due: Analogy

XIII

.XIV

To Federal Cases Affirming

The Right To Defend

Forfeiture Cases

Vil

C.) Constitutional Insufficiency

Of Ex Parte Determination

OF Prertereccen «< 3 ack aS SB

Appendix

Opinion Of The Indiana Court Of

Appeals Sought To Be Reviewed. . .i

Findings Of Fact & Conclusions Of

Law OF State Triads. Court .) . ss Se

Appellants’ Petition

Oe er a ia a es ee

Order Of Indiana Supreme Court

tate Tee. kc ee ae ee

chP ial. ey |: rae mame ae ay - 5 o |

TABLE OF CITED AUTHORITIES

Constitution

United States Constitution, PS 3 EG ge

Amendment Fourteen. .. 13, 17, 29, xxii

Cases

United States Supreme Court Pages

Hovey v. Elliott,

167 U.S. 409,

lL? Bou ees

CY das oe Pe ee 2 of Re ee eee

Joint Anti-Fascist

Refugee Committee

VIII

v. McGrath, 341 U.S.

> te 2. ee Oe ge or eae

S. Ct. 624, 647-49,

i, Ah) Mee eR RB ao a ee ae Ree aa

Logan v. Zimmerman

Brush Co. (1982)

455 US 422, 428-430;

104 ..8.06.: 2268;

Teds as. ADs

vow Ree 1 ina ae ate Saas SST “Sieg S Pata tiie + 2% f

McVeigh v. United States

760.8 421 Waist .3

oo Siler 8 TBS Say EG Oe Ey i: ) GaN eR ee a eaereae” 7 5

Mullane v. Central

Hanover Bank &

Trust, 339 US 306,

94 L.Ed. 865, Page 3 gee

Tee eee Sao as Na we 2S, 27, 26

United States v.

Daniel Good Real

Property. US __

134 &.-€C.. 492, 3502,

126 L.Ed. 2d. 490

Pe hae ee eg et BR ee

Windsor v. McVeigh (1876),

2S ee ee as Re ie Re Ee odes ole Oa EE

Seventh Circuit Court of Appeals

Deas wv. Teme 731 F. 28.

3393, 402, ° t&CA 7,

oy BEATEN SRN EINSR GA i eNotes Coes a em 2” Se

U.S. v. $40,877.59

in U.S. Currency,

32 F.3d 1151

(7th Cir. 1994,

a "He

Indiana

Archem v. Simo (Ind. App. 1980)

549 NE 2d. 1054, 1059 . xxii

Diaz _v Duncan, _

406 NE 2d. 991,

1002, (Ind.App. 1980) . . 12, xviii, xix

Federal Land

eank of Louieyil)

vy. Schleeter, 208

Ind. 9, 194 N.E.

> BS Ser or eS eee |

Hunt v. Shettle (Ind. App. 1983)

452 NE 2d. 1045, 1050, 1051... . xxii

La Plante v.

Convery, 98 Ind. 499,

6 ae ee es re ee eet

binentn Mere) pie

530 N.E. 2d 784

(Ind. App. 1988), 4, aa, wai,

trans. denied... Eo Sh, BVA, WEA

Matter of Lemond (Ind. &

Ind. App. 1980)

ot © AS Se) Oe es ree eee

661 NE 2d. 1271

(Ind. App. 1996)... . .XIII, i,

661 N.E. 2a 580

(Ind. App. 1996).

State ex rel. Anderson

Development Corp. v.

County, 199 N.E. 2d 88,

245 Ind. 371

(Ind. 1964)

State v. Superior

Court of Madison County

(Ind. 1964) 199 NE 2d 88, 93, 94.

State v. Superior

Court of Marion County

(Ind. 1933) 187 NE 203, 204

eoetiiad Fed

Land Bank of

, 451 N.E. 2d

667, 672, n. 1 (Ind.

App. 1983). eer"

Federal

28 USC § 1257

18 USC § 981.

Ind.

Ind Code 20-1-14-1.

Ind Code 26-1-9-203

.XIV

Ind. Code 29-1-1-21

Ind. Code 29-1-7-4

Ind. Code 29-1-4-1

Ind. Code 29-1-8-8 he

Kan.--K.S.A. 59-1507.

Minnesota

Minn.--M.S.A.

525.51. (Repealed: 1995)

Minnesota Statutes

Annotated §524.3-

1203 subds. 1-5

Texas

Tex.--V.A.T.S.

Probate Code Sec. 143

Rules of Procedure

Ind. Rule Ap. 11

Ind.Rule Ap.11(B

Ind.Rule. Ap. 11

Ind Rule Ap. 4(A

Rule 29.4(c).

(B) (4).

)

(

) (

) (5).

XII

2) (e)

20,149

pe ants me E

anes mle So

44) aa ote. ae

. 22

16, “17,

eval. xviii

ee. P

ee 4 A

.Xix

————

(D)

CITATIONS OF OFFICIAL AND

UNOFFICIAL REPORT OF THE OPINION

OF INDIANA COURT OF APPEALS

SOUGHT TO BE REVIEWED

John W. OVERMYER and Elizabeth

Overmyer, Appellants,

Vv.

Ivan MEEKER, Executor of the Estate of

Arthur C. Meeker,

Deceased; National City Bank, Indiana,

Crop

Fertility Specialists, Kerlin Elevator,

and Lincoln National Life

Insurance Co., Appellees.

No. 91A04-9412-CV-488.

Court of Appeals of Indiana.

March 6, 1996.

661 N.E. 2d 1271, Overmyer v. Meeker,

(Ind. App. 1996)

XIII

(EB)

CONCISE STATEMENT OF THE BASIS

FOR JURISDICTION IN THIS COURT

(i.) Indiana Court of Appeals

opinion entered, March 6, 1996.

(ii.) Petition to Transfer filed

with the Supreme Court of Indiana on

March 21, 1996, was overruled on July 2,

1996, See: Rule Ind. Ap. 11(B).

(iii.) Rule 12.5 is inapplicable.

(iv.) 28 USC § 1257 is believed to

confer on this Court jurisdiction to

review on a writ of certiorari the

judgment in question.

(v.) The notifications required by

Rule 29.4(c) concerning the

constitutionality of Ind Code 29-1-8-8

have been made by serving the Attorney

General of Indiana with copies of this

petition.

XIV

(F)

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED IN THE CASE

(i.) United States Constitution

Amendment Fourteen

"All persons born or naturalized in

the United States, and subject to the

jurisdiction thereof, are citizens of

the United States and of the state

wherein they reside. No state shall

make or enforce any law which shall

abridge the privileges or immunities of

citizens of the United States; nor shall

any state deprive any person of life,

liberty, or property, without due

process of law; nor deny to any person

within its jurisdiction the equal

protection of the laws."

(ii.) Ind. Code 29-1-8-8, which

provides as follows:

"Sec. 8. Whenever, after the

inventory has been filed by a

personal representative, it is

established that the estate of a

decedent, exclusive of allowance

to the surviving spouse or

dependent children, does not

exceed an amount sufficient to pay

the claims of classes 1 to 6

inclusive, the personal

representative upon order of the

court shall pay the same in the

order provided and thereafter

present his account with an

application for the settlement and

allowance thereof. Thereupon, the

court, with or without notice, may

adjust, correct, settle, allow or

disallow such account, and, if the

account is settled and allowed,

decree final distribution,

discharge the personal

representative and close the

administration." (emphasis added)

(iii.) Ind. Code 29-1-16-6 (c), which

provides, in pertinent part, as follows:

"Upon the filing of any account ina

decedent’s estate, hearing and notice

thereof shall be had as follows:

and the personal representative makes

no request (1) for authority to

distribute any of the assets of the

estate, or (2) that said account may

be made final as to the matters and

things reported in said account, the

court may order such notice as he

deems necessary or approve the same

ex parte and without notice. Every

such intermediate account approved

without notice shall be subject to

review by the court at any time and

shall not become final until the

personal representative’s account in

final settlement is approved by the

court.”

XVI

(G)

STATEMENT OF THE CASE SHOWING HOW AND

WHEN FEDERAL QUESTIONS WERE RAISED

Although the clerk of the Circuit

Court, White County, Indiana, notified

appellants that executor’s petition to

close decedent’s estate as insolvent

“pursuant to Ind. Code 29-1-8-8," was

set for hearing on September 19, 1994,

(notice of hearing & executor’s petition

to close estate as insolvent, record of

proceedings,"R.P." below, p. 6, 182,

122, 123),* when appellant’s counsel

subpoenaed the executor to testify on

that date the state trial court denied

counsel the right to examine the

‘“WHEREFORE, said Ivan Meeker, as Executor of

the Estate of Arthur C. Meeker, deceased, prays

that this estate pursuant to the provisions of I.C.

29-1-8-8, be ordered closed as an insolvent estate,

with notice to the attorneys of record, that the

proposed distribution be approved by the Court, and

that said Executor be released and discharged from

any further liability or responsibility with regard

to said estate." (emphasis added)

executor concerning the source of cash

held by him during the period of his

trust, (op. bel., app. p. viii).

This attorney immediately objected as

follows: (transcript of trial court

proceedings "trans.", R.P. p. 355, 356)

MR. BUCHANAN: "Well, I want to make

an objection, Your Honor. I object to

the court’s not permitting me--I want

the record to show that Ivan Meeker

is present in the courtroom in

response to my subpoena duces tecum.

I want the record to show that Your

Honor is denying me the right to

examine the witness and I object on

the grounds that Mr. and Mrs.

Overmyers’ due process rights are

denied by me being denied the right

to examine a party in this case."

The trial judge responded that a

legal issue had been presented which

disposed of the matter and stated "I

think we’re wasting a lot of people’s

time if we try and take an evidentiary

hearing at this point.," (trans., R.P.

379, 380). In its formal entry of final

- ee Ren meget

judgment, in which it directed the entry

of judgment on its finding that "The

Executor’s Petition to Close Estate as

Insolvent is hereby Granted.," the trial

court stated the reasons for its refusal

to hear the testimony of the executor,

or any evidence upon the executor’s

petition to close the insolvent estate,

as follows: (op. bel., app. p.vii, &

verb. stmt.of tr.ct jgmt., app. p.xii,

xiii)

"Since the court has determined that

Overmyers are unsecured creditors

only, there is no need for the court

to hear evidence on where the cash

held by the executor came from, since

there is no dispute as to what is

held, but only as to whom is entitled

to such cash."(emphasis added)

The Indiana Court of Appeals affirmed

this decision, on March 6, 1996, holding

that "The trial court conducted a

hearing on the executor’s petition to

close the estate on September 19,

1994.," but declined to address the

issue of the trial court’s refusal to

hear evidence, because:

"the [trial] court’s interlocutory

order that Overmyers are unsecured

creditors, having no specific lien

rights in cash assets of the estate,

[was not] contrary to our holding in

Lincoln Nat. Life Ins. Co v. John W.

and Elizabeth Overmyer, supra.” (op.

bel., app. p .x)

After the opinion was handed down,

appellants, on March 21, 1996, proceeded

directly to the Indiana Supreme Court

via petition to transfer, Ind. Rule Ap.

11 (8B); (pet. Cr., Qpb. Di meas). AS

authorized by Ind. Rule. Ap.

11(B) (2) (e), appellants contended that

the opinion of the court of appeals

failed to give a statement in writing

upon the second issue raised and argued,

namely, "By refusing to hear evidence

*530 NE 2d. 785, (Ind. App. 1988)

en -

coucerning the source of cash assets of

the estate, the trial court failed to

perform its duty to correct possible

errors in the executor’s final report,

and could not fulfill its responsibility

of designating the creditors and amounts

to whom distribution of the estate

should be made." Under "Issue II,"

presented to the court of appeals,

appellants contended that the refusal of

the trial court to hear evidence

violated due process, to the prejudice

of unsecured creditors, because there

was no evidence supporting preferential

payments out of the estate cash to

National City Bank, Indiana (formerly,

First National Bank of Logansport,

herein, "the bank"). (pet. tr.,app.p.

xvi, XVii). Pursuant to the Indiana

rules of appellate procedure the Indiana

Supreme Court has exclusive jurisdiction

of the "... supervision of the exercise

of jurisdiction by the other courts of

the State...", Ind Rule Ap. 4(A) (5).

Refusal of an Indiana trial court to

hear evidence is a jurisdictional issue,

State ex rel. Anderson-Madison County

Hospital Development Corp. v. Superior

Court of Madison County, 199 N.E. 2d 88,

245 Ind. 371 (Ind. 1964).

Appellants cited the Indiana Supreme

Court to Windsor v. McVeigh (1876), 93

US 274, 23 L.ed. 914; and Logan v.

Zimmerman Brush Co. (1982) 455 US 422,

428-430; 102 S. Ct. 1148; 71 Led. 2d.

265, 273-275, and contended, inter alia,

that "... by denying creditors of the

estate the right to be heard and cross-

examine the executor at the statutory

final hearing in the estate, the lower

court deprived appellants of a property

interest, without due process of law,

and, denied them the equal protection of

the laws, contrary to the Fourteenth

Amendment," (app. p. xx). The Indiana

Supreme Court denied transfer on July 2,

1996, without comment, which terminated

the litigation between the parties in

the Indiana Supreme Court,

(OFG...Gen,..02., pp. .p. xxiii), Ind.

Rule Ap. 11(B) (4).

Appellants’ subpoena duces tecum to

the executor raised evidentiary issues

concerning the executor’s receipts of

cash and cash expenditures as shown on

his intermediate account, (R.P. p. 212).

The trial court, exercising discretion

conferred by Ind. Code 29-1-16-€(c), had

ordered the intermediate account

approved, without notice, more than two

years before the proceedings on

September 19, 1994, (R.P. p. 52.), and,

a few months after its ex parte approval

of the intermediate accounting, the

trial court found that "the debts of the

estate far exceed the assets," (R.P.

S. Fe).

However, aS appellants’ counsel

stated to the trial court during the

proceedings for final settlement, after

the court had denied counsel the right

to examine the executor: (trans., R.P.,

p. 381, 382)

APPLNTS’ ATTY:"The Bank was paid in-

whenever they were paid out of the

estate back in ‘88 or whenever it

was.

ESTATE’S ATTY: The Bank hasn’t been

paid, your Honor.

APPLNTS’ ATTY: They received four

hundred and fifty-eight thousand

dollars out of this estate, Your

Honor, according to the intermediate

accounting.

BANK’S ATTY: It was just the value of

security that was abandoned to us.

That’s it.

APPLNTS’ ATTY: Well, it shows an

expenditure of four hundred and

fifty-eight thousand dollars on his

intermediate accounting.

BANK’S ATTY: No money, just

abandonment of security.

ESTATE’S ATTY: Abandonment of what

they had secured is all it was. We

didn’t pay them any money.

BANK'S ATTY: We haven’t seen a dime."

The statements of "the bank’s" and

the estate’s attorneys are controverted

by the intermediate accounting, which is

for the period April 15, 1985, through

GCctonper i272, 1993, (R.P., p. 42). ft

shows that the executor collected

$792,283, in cash, as assets of the

decedent’s insolvent estate, including

$126,128, as cash rent, and $341,571,

from the sales of soybeans and corn.

(Rp. 46-48)

The "Expenditures" side of the

intermediate accounting represents that

at some time in the period of the

intermediate accounting the executor

paid $464,248 to "the bank," (R.P.p.50).

Itemized as "Expenditure 112," the

amount is represented to be the total of

(1) the sales of property, including

corn and soybeans, "subject to [’the

bank’s’] lien," and, (2) the settlement

from a lawsuit "subject to [‘the

bank’s’] lien." (intermed. acct.,

R.P.,p.50)

The 112 expenditures itemized in the

intermediate account when deducted from

the cash assets and income left a

"balance on hand" of $197,352.04. The

"Balance shown on Intermediate

Accounting filed 11/15/’91" of

$197,352.04 was entered by the executor

on his final accounting, which he

attached to his petition to close estate

as insolvent. Deduction of further

expenditures itemized in the final

EEE

accounting left a "balance on hand" for

distribution to unsecured creditors of

$50,876.06, (R.P. p. 124).

ARGUMENT

DENIAL OF OPPORTUNITY TO CONTEST

Acting pursuant to discretion

conferred upon it by a statute of the

state of Indiana, Ind. Code 29-1-8-8, a

state trial judge denied appellants the

opportunity to interrogate an executor

at the final proceeding to close an

insolvent estate merely because

appellants are unsecured creditors.

"Certainly, the proceeding [was] one in

which they may be deprived of property

rights and hence notice and hearing must

measure up to the standards of due

process," Mullane, supra, 339 US at 313,

94 L.Ed. at 873, because the usual rules

of res judicata bar interested persons

from subsequent action against the

executor for illegal impairments of

their interests after the complete

settlement of an estate in an Indiana

court, Loyd v. Loyd, 731 F. 2d. 393,

402, (CCA 7, Ind., 1984); see: Ind. Code

29-1-16-8.

In Indiana, "...the personal

representative is regarded as the

trustee... appointed by law for the

benefit or protection of...creditors" of

the estate, Diaz v Duncan, 406 NE 2d.

991, 1002, (Ind. App. 1980). Thus, the

facts in this case raise issues

concerning the final settlement of trust

fund accounts by fiduciaries similar to

the issues which the Court considered in

Mullane.

The Court, in Logan v. Zimmerman

Brush Co., 455 US 422, 428-430; 102 S.

Ce. 1134686: 72 bb. Ba. 2a. 265, 273-275

(1982), summarized Mullane, as follows:

"Justice Jackson, writing for the

Court in Mullane v. Central Hanover

Bank & Trust Co., 339 US 306, 94

L. 8a. 665, 76 $.Ct. 652 (1950),

observed: ‘Many controversies have

raged about the cryptic and abstract

words of the Due Process Clause but

there can be no doubt that at a

minimum they require that deprivation

of life, liberty or property by

adjudication be preceded by notice

and opportunity for hearing

appropriate to the nature of the

case.’ Id., at 313, 94 L.Ed. 865, 70

S.Ct. 652. At the outset, then we are

faced with what has become a familiar

two-part inquiry: we must determine

whether Logan was deprived of a

protected interest, and, if so, what

process was his due.

The first question, we believe, was

affirmatively settled by the Mullane

case itself, where the Court held

that a cause of action is a species

of property protected by the

Fourteenth Amendment’s Due Process

Clause. There, the Court confronted a

challenge to a state law that

provided for the settlement of. common

trust fund accounts by fiduciaries,

upon notice given through newspaper

publication. The effect of the

Statute was to terminate ‘every right

which beneficiaries would otherwise

have against the trust company...for

improper management of the common

trust fund.’Id, at 311, 94 L.Ed 865,

70 S,Ct.652. This, the Court

concluded, worked to deprive the

beneficiaries of property by, among

other things, ‘cut[(ting] off their

rights to have the trustee answer for

negligent or illegal impairments of

their interests.’ Id., at 313, 94

L.Ed. 865, 70 §.Ct. 652. Such a

result was impermissible unless

constitutionally adequate notice and

hearing procedures were established

before the settlement process went

into effect. Id., at 94 L.Ed. 865, 70

S.Ct. 682.

A.) Property Rights Protected by

Fourteenth Amendment

Appellants challenge a state law

providing for the settlement of the

accounts of executors, i.e. "trustees,"

of insolvent estates "with or without

notice," to unsecured creditors.

Ind. Code 29-1-8-8 provides as

follows:

"Sec. 8. Whenever, after the

inventory has been filed by a

personal representative, it is

established that the estate of a

decedent, exclusive of allowance to

the surviving spouse or dependent

children, does not exceed an amount

sufficient to pay the claims of

classes 1 to 6 inclusive, the

personal representative upon order of

the court shall pay the same in the

order provided and thereafter present

his account with an application for

the settlement and allowance thereof.

Thereupon, the court, with or without

notice, may adjust, correct, settle,

allow or disallow such account, and,

if the account is settled and

allowed, decree final distribution,

discharge the personal representative

and close the administration."

(emphasis added) .?

* This section is similar to Sec. 92 of the

Model Probate Code.

COMPARATIVE LAWS:

Tex.--V.A.T.S. Probate Code Sec. 143. Kan.--K.S.A.

59-1507.

Minn.--M.S.A. 525.51.(Repealed: 1995) Minnesota

Statutes Annotated § 524.3-1203 subds. 1-5, (part

of the Uniform Probate Code adopted as Minn. Laws

1995 ch. 130 § 20, see: Uniform Laws Anno., Master

Ed. Vol. 8.), are provisions concerning the

settlement and closing of insolvent estates. Subd.

1 provides, in pertinent part, "...if there is no

property except...property that may be apportioned

for the payment of property’ selection...the

allowances of the spouse and children, and expenses

and claims provided in § 524.3-805(a)(1) to (6),

the personal representative, by order of court may

pay the estate in the order named.

The court may then, with or without

notice, summarily determine the

heirs, legatees, and devisees in its

final decree of order of distribution

assigning to them their share or part

of the property with which the

personal representative is charged."

"Classes 1 to 6," and their order of

payment, are specified in Ind. Code 29-

1-14-9 as: (1) Costs and expenses of

administration. (2) Reasonable funeral

expenses. (3) Survivor’s allowance

under IC 29-1-4-1. (4) All debts and

taxes having preference under the laws

of the United States. (5) Medical

expenses of last sickness. (6) All

debts and taxes having preference under

the laws of this state.

The seventh and final class, into

which appellants’ $250,000 unsecured

claim falls, is "All other claims

However, § 524.3-1203 subd. 5, provides, in

pertinent part, that "In the event that an

improper distribution or disbursement is made in

a summary closing...as shown by the personal

representative or petitioner...resulting in

damage...the court may vacate its summary decree

or closing order...after hearing held thereon on

14 days’ notice of hearing...personally served

upon the personal representative...distributee or

recipient of assets where appropriate." (emphasis

added)

allowed." IC 29-1-14-9 concludes by

providing that "No preference shall be

given in the payment of any claim over

any other claim of the same class..."

Indiana’s statutory scheme for the

discharge of executors of insolvent

estates is repugnant to the Fourteenth

Amendment because the statutory option

to settle accounts without notice is not

"...reasonably calculated, under all

circumstances, to apprise..." unsecured

creditors of the pendency of the final

proceeding and "...afford them an

opportunity to present objections," to

the classification of other creditors as

secured and entitled to preferential

payment, Mullane, id.

In an insolvent estate where the

assets are insufficient to pay all

claims, the issue of which creditors are

Day

entitled to preferential payment is the

most important. When, as here, the

largest proportion of estate assets

consists of cash derived from the sale

of crops, the question, which the trial

court refused to permit appellants’

counsel to ask, namely, “where the cash

held by the executor came from," must be

answered, (tr. cts.’ fin.jgmt,app.,p.ix;

stmt. of case). Ind. Code 26-1-9-203

provides, in pertinent part, that "...a

security interest is not enforceable

against the debtor or third parties with

respect to the collateral and does not

attach unless: (a)... the debtor has

Signed a security agreement which

contains a description of the collateral

and in addition, when the security

interest covers crops growing or to be

grown...a description of the land

concerned;" (emphasis added).

In the case-at-bar, the executor

diminished the money available to pay

unsecured creditors by nearly half a

million dollars when he paid $464, 248---

58% of total cash assets--- to "the

bank," representing to the trial court

that the amount was the proceeds of the

sales of property, including corn and

soybeans, "subject to [the bank,s]

lien." Ex parte*, the trial court

authorized the preferential payment to

the bank, and at the final proceedings

to discharge the executor, denied

appellants the right to examine him

about where the cash in his hands came

from, although 43% of total cash assets

gt 4s 29-1-16-6(c) mt 8 3 the account is

intermediate...the court may order such notice as

he deems necessary or approve the same ex parte and

without notice." (emphasis added) see; p. XV, supra

were derived from sales of corn and

soybeans, (stmt. of case). Thus,

without a hearing of any kind, judgment

was entered permanently depriving

unsecured creditors of a pro rata share

in money to which they may have been

entitled if "the bank" did not hold a

valid security agreement upon the

property described in "Expenditure 112."

B.)_ Process Due: Analogy to Federal

Cases Affirming the Right to Defend

Forfeiture Cases

The reasoning of the Seventh Circuit

Court of Appeals in U.S. v.$40,877.59 in

U.S. frrescy, 32: F. 34 1253 7th Cir.

1994, Ind. 1994), is relevant to an

analysis of the facts below. The

opinion reverses a district court

judgment permanently forfeiting funds to

the United States, under the fugitive

disentitlement doctrine, "without a

hearing of any kind," pursuant to 18

U8... 8: 982)..324::27.30 at 2152. “sowever,

the Supreme Court has established that

notwithstanding an individual’s status,

where he is vulnerable to being sued, he

has the right to defend himself in the

action brought against him; that the

constitutional right to defend is

inseparable from the liability to suit.

McVeigh v. United States, 78 U.S. (11

Wall.) 259, 20 L.Ed. 80 (1870); Hovey

¥icBestOCt;: 667 U.S. 409, 17 &.Ct.; 841,

42 L.Ed. 215 (1897). We think that the

right to defend applies to fugitives as

well," 32 ?.2a at 1153.

Under the Indiana statutory

procedure for insolvent estates, the

state authorizes the personal

representative named in the will to

initiate the proceeding for the

administration of the decedent’s estate

and mandates that the executor "shall

take possession of all the real and

personal property of the decedent...,"

Ind. Code 29-1-7-4, 29-1-13-1. An

unsecured creditor must use the

adjudicatory procedures established by

the Probate Code, and file a claim

against the estate, or his claim against

"the estate, the personal

representative, the heirs, devisees and

legatees of the decedent..." "shall be

forever barred," Ind Code 20-1-14-1;

see: Logan v Zimmerman Brush Co., supra

455 US at 429,430; 71 L.Ed. 2d at 274.

When an Indiana probate court settles

the account of an executor of an

insolvent estate, “without notice," it

proceeds in a manner similar to a

district court which applies the

fugitive disentitlement doctrine--"The

status quo is altered, property is

redistributed, and all without any

hearing whatsoever on the merits of the

cause," $40,877.59 in U.S. Currency, 32

F.3d at 1156.

C.) Constitutional Insufficiency of Ex

; of Pref

The lower court’s ex parte

determination of "the bank’s"

entitlement to preferential payment is

incompatible with this Court’s opinion

in United States v. Daniel Good Real

Property, --- U.S. ----, 114 S.Ct. 492,

502, 126 L.Ed. 2d 490 (1993), that an

ex parte hearing is an insufficient

procedure to justify even a temporary

impairment of one’s property rights,

although there will be a full |

post-deprivation hearing.

"In issuing a warrant of seizure, the

magistrate judge need determine only

that there is probable cause to

believe that the real property was

[used, or intended to be used, in the

commission of a crime]. The

Government is not required to offer

any evidence on the question of

innocent ownership or other potential

defenses a claimant might have. Nor

would that inquiry, in the ex parte

Stage, suffice to protect the

innocent owner’s interest.

‘(F)airness can rarely be obtained by

secret, one-sided determination of

facts decisive of rights.... No

better instrument has been devised

for arriving at truth than to give a

person in jeopardy of serious loss

notice of the case against him and

opportunity to meet it.’"(citations

omitted) (quoting Joint Anti-Fascist

Refugee Committee v. McGrath, 341

U.S. 123, 170-72, 72. 3.Ct. 624,

647-49, 95 L.Ed. 817 (1951))

It is fairly obvious that the Indiana

trial court’s "secret one-sided

determination" of "the bank’s"

entitlement to preferential payment out

of the insolvent estate did not obtain

fairness. The trial court discharged |

the executor without knowing not only |

where the cash in his hands came from

but who received it. "The bank’s" and

the estate’s attorneys, during argument,

claimed the money shown paid to "the

bank" in "Expenditure 112," of the

intermediate account, was merely

“abandonment of security;" "The bank’s"

attorney actually stated to the trial

court, “We haven’t seen a dime," (stmt.

of case). But the sales of fungible

commodities such as corn and soybeans

result in cash equivalent to market

prices quoted hourly. The payment of

the proceeds of commodities’ sales shown

under Expenditure 112 can not be

“abandonment of security," id. A full

hearing on the merits is necessary to

investigate the disposition of the cash

shown distributed by the executor in

Expenditure 112. If a hearing

identifies a recipient who did not own

an enforceable security interest, then

the executor should answer to the

unsecured creditors for “illegal

impairments" of their right to pro rata

payment out of his trust fund, Mullane,

supra.°*

Indiana’s probate procedure 1.)

authorized the trial court to approve

the intermediate account, and the

executor’s preferential payment to "the

bank," (if that is who received the

money), ex parte, IC 29-1-16-6 (c), see:

p. XVI, supra; then, 2.) upon a finding

of insolvency, empowered the trial court

to finally settle the insolvent estate,

by summary proceedings, "without

notice," IC 29-1-8-8.

°*For example, adding $464,000 to the amount

available for distribution to unsecured creditors

increases the value of appellants’ $250,000

unsecured claim from 2.7¢ on the dollar to 28¢ on

the dollar.

Sere eee nee

Although the clerk of the trial court

may have notified appellants that the

judge had "set a hearing" for a certain

date upon the executor’s petition to

close estate as insolvent "pursuant to

IC 29-1-8-8," (stmt. of case), when

appellants subpoenaed him to testify at

that time, the court ruled that evidence

was a waste of time, and denied

unsecured creditors the right to be

heard, (stmt. of case). The Court’s

holding in Windsor v. McVeigh, 93 US

274, 277, 278; 23 L.Ed. 914, discloses

that although appellants were present in

court in response to notice, when the

trial court refused to hear evidence

before settling the executor’s accounts

and discharging him, his final decree

deprived them of property "without

notice," within the due process clauses:

"That there must be notice to a

party of some kind, actual or

constructive, to a valid judgment

affecting his rights, is admitted.

Until notice is given, the court

has no jurisdiction in any case to

proceed to judgment, whatever its

authority may be, by the law of

its organization, over the

subject-matter. But notice is

only for the purpose of affording

the party an opportunity of being

heard upon the claim or the

charges made; it is a summons to

him to appear and speak, if he has

anything to say, why the judgment

sought should not be rendered. A

denial to a party of the benefit

of a notice would be in effect to

*278 deny that he is entitled to

notice at all, and the sham and

deceptive proceeding had better be

omitted altogether. It would be

like saying to a party, Appear,

and you shall be heard; and, when

he has appeared, saying, Your

appearance shall not be

recognized, and you shall not be

heard." (emphasis added) *

“Indiana has adopted a Model Probate Code

provision which provides as follows, Ind. Code 29-

1-1-21:

“For illegality, fraud or mistake, upon

application within one [1) year after the

discharge of the personal representative upon

final settlement, the court may vacate or

modify its orders, judgments and decrees or

grant a rehearing therein." compare: Uniform

Probate Code, footnote 3, supra.

However, unless this Court finds the trial court’s

a eee

The Seventh Circuit Court of Appeals

has held that the estate closing

procedures in a solvent Indiana estate’

"...fully satisfied the mandate of

Mullane." by according interested

parties the opportunity to be heard,

Loyd v. Loyd, supra, 731 F. 2d. at 400,

401 ("(Plaintiff] had prior notice of

the relevant proceedings yet she chose

not to participate," by introducing

evidence). And, if due process of law

accords a fugitive claimant, or a party

in contempt of court, Hovey, a hearing

refusal to hear evidence a denial of due process,

appellants, under the precedent of the Seventh

Circuit Court of Appeals construing IC 29-1-1-21,

in context with the Fourteenth Amendment, "will be

bound by the litigation in which the issue could

have been raised," Loyd v. Loyd, supra, 731 F. 2d.

at p. 402.

"Ind. Code 29-1-16-6(a) "...the court or clerk

shall set a date for hearing of the final account

and petition for distribution and the clerk shall

give notice to all persons entitled to share in the

final distribution..."

where evidence is heard before rights to

property are finally, or, even,

temporarily, adjudicated, it should

entitle unsecured creditors of an

insolvent Indiana estate to a final

settlement and discharge hearing where

they can interrogate the executor about

preferential payments, ordered at a

prior "secret, one-sided," ex parte

hearing, Good, supra.

Appellants respectfully pray that the

writ shall be allowed.

APPENDIX

Opinion of Indiana Court of Appeals

Sought To Be Reviewed

"Copyright (C) West Publishing Co. 1996

No claim to original U.S. Govt. works.

661 N.E.2d 1271, Overmyer v. Meeker,

(Ind.App. 1996)

*1271 John W. OVERMYER and Elizabeth

Overmyer, Appellants,

Vv.

Ivan MEEKER, Executor of the Estate of

Arthur C. Meeker,

Deceased; National City Bank, Indiana,

Crop

Fertility Specialists, Kerlin Elevator,

and Lincoln National Life

Insurance Co.,- Appellees.

No. 91A04-9412-CV-488.

Court of Appeals of Indiana.

March 6, 1996.

*1272 Appeal from the White Circuit

Court; R. Perry Shipman, Special Judge,

Cause No. 10595. .

James P. Buchanan, Buchanan &

Buchanan, Lebanon, for appellants.

Donald J. Tribbett and Scott L.

Starr, Starr Austen Tribbett & Myers,

Logansport, for appellees.

OPINION

DARDEN, Judge.

STATEMENT OF THE CASE

[1] John W. and Elizabeth Overmyer

appeal the trial court’s grant of the

executor’s petition to close Arthur

Meeker’s estate as insolvent. We

affirm.

FACTS

Many of the facts relevant to this

appeal were summarized as follows in

Lincoln Nat’‘l Life Ins. Co. v. Overmyer,

530 N.E.2d 784 (Ind.Ct.App.1988), trans.

denied:

John W. and Elizabeth Overmyer

originally owned the real estate

which is the subject of the dispute

today. They sold the real estate by

land contract to Arthur C. Meeker;

Meeker’s obligations under this

contract were never completely

Satisfied. Meeker sought to obtain a

loan from Lincoln secured by this

real estate.

In order to facilitate the loan, the

Overmyers gave Meeker title to the

property by general warranty deed to

enable him to give Lincoln a first

mortgage on the real estate. The

a ee

init ities

Overmyers orally agreed, in

consideration for making the

conveyance, to accept $600,000.00

cash from the loan proceeds (less

than the $1,050,000.00 payoff balance

of their land contract). Also,

unbeknownst to Lincoln, the Overmyers

orally agreed to accept a second

mortgage on the real estate in

question or a first mortgage on

certain real estate near

Burnettsville owned by Meeker from

Meeker to secure the unpaid balance

of the land contract.

On the basis of these undisputed

agreements, Meeker recorded his deed

and Lincoln recorded its mortgage;

Lincoln loaned Meeker $1,200,000 of

which $600,000 was directly disbursed

to the Overmyers. Meeker gave a

second mortgage to the real estate in

question to the First National Bank

of Logansport and never got around to

giving the Overmyers any other

security for the unpaid balance of

the land contract.

Meeker died. Lincoln and the

Overmyers filed claims against his

estate. Lincoln also filed an action

to foreclose its mortgage on the real

estate; its claim, principal and

interest, amounted to $1,662,429.60

as of August 31, 1985. The Overmyers

asserted a vendor’ s lien on the real

estate in question based upon the

unpaid balance of the original land

contract which amounted

*1273 to $640,479, principal

iii

interest. The parties stipulated the

fair market value of the land was

insufficient to satisfy even the

principal amounts of the two loans.

Lincoln and the Overmyers filed cross

motions for summary judgment. The

trial court granted the Overmyers’

motion and denied Lincoln’s, giving

the Overmyers’ security interest

priority over Lincoln’s. Upon

Lincoln’s motion to correct errors,

the court amended its judgment and

established priority as follows:

Lincoln--first $600,000;

Overmyers--next $450,000 plus

interest

Lincoln--any remaining proceeds to

satisfy claim for interest

2G: O% 7G5.

Lincoln appealed and we found that:

the Overmyers waived their vendor’s

lien ‘to the extent of the mortgage

made’ to Lincoln. The Overmyers’

vendor’s lien, though not lost,

attached only to Meeker’s equity of

redemption and any surplus remaining

from the proceeds of the mortgage

foreclosure sale after the proceeds

have been applied in discharge of

Lincoln’s mortgage lien.

Id. at 787. (Emphasis in original).

Accordingly, we reversed the summary

judgment in favor of the Overmyers and

remanded with instructions that the

trial court grant Lincoln’s summary

judgment motion.

On November 15, 1989, the trial court

entered a "Final Judgment and Decree of

Foreclosure and Sale," wherein the trial

court awarded Lincoln a $2,575,387.26

judgment. The trial court further

concluded as follows:

The Mortgage held by Lincoln

shall be and is hereby foreclosed as

a first and priority lien against all

the Parties and the equity of

redemption of all Parties and all

persons claiming from, under or

through any of the Parties, in and to

the Real Estate, shall be and the

Same is foreclosed, subject to the

lien of current taxes not delinquent.

(R. 138-39). On January 9, 1990,

pursuant to the decree of foreclosure,

the sheriff sold the farm, and Lincoln

bought it for $1,300,000.00,

approximately $1,275,387.26 less than

Lincoln’s judgment against Meeker’s

estate.

On March 10, 1992, the executor filed

a petition for allowance of fees to the

executor and to the estate’s attorney,

which the trial court granted that same

day. On March 13, 1992, the trial court

approved an agreement wherein the

Overmyers were allowed a $250,000.00

claim against the estate. Subsequently,

on March 17, 1992, the Overmyers

requested a hearing on the trial court’s

grant of the executor’s petition for

allowance of fees. At the June 4, 1992,

hearing, the Overmyers argued that their

claim had priority over the claims for

fees. Specifically, the Overmyers

argued that they still had a vendor’s

lien on $80,000.00--income which the

farm earned during the first growing

season after Meeker’s death. On June

29, 1992, the trial court denied the

Overmyers’ claim finding that Lincoln v.

Overmyer, supra, had limited the

Overmyers’ vendor’s lien to the equity

of redemption and the surplus from the

sheriff’s sale. The trial court

reasoned that because the right of

redemption no longer existed and there

was no surplus from the sheriff’s sale,

there were no assets to which the

Overmyers’ vendor’s lien could attach.

The trial court further found that the

$80,000.00 became a "part of the assets

of the Estate of the Decedent." (R.

70).

On April 20, 1994, the executor filed

a petition to close Meeker’s estate as

insolvent. Thereafter, the Overmyers

filed four pleadings objecting to the

petition. The first pleading, which was

filed on April 22, 1994, alleged that

the Overmyers were entitled to a

"specific lien" which, according to the

Overmyers, arose from the sales contract

with Meeker. The second pleading, which

was filed June 24, 1994, alleged that

the Overmyers had a vendor’s lien on the

farm's income. The third pleading,

which the Overmyers filed on July 1,

1994, objected to an expenditure to

National City Bank (formerly the First

National Bank of Logansport) to the

extent that the expenditure came from

income derived from the real estate

subject to the Overmyers’ lien. The

final pleading, *1274 filed on

September 15, 1994, alleged that the

farm’s rents, issues and profits were

included within the equity of redemption

discussed in Lincoln, supra. According

to the Overmyers, their vendor’s lien

attached to those rents, issues and

profits. In addition, the Overmyers

filed a petition requesting the trial

court to marshall assets.

The trial court conducted a hearing

on the executor’s petition to close the

estate on September 19, 1994. At the

hearing, the Overmyers wanted to

question the executor; however, the

estate and National City Bank argued

that the Overmyers’ objections to

closing the estate as insolvent

presented a legal issue and that the

executor’s testimony was unwarranted.

The Overmyers conceded that the court

had already heard their arguments and

ruled against them on June 29, 1992.

The trial court agreed with the estate

and concluded that evidence was

unnecessary because the Overmyers’

objections presented a legal issue. On

October 6, 1994, the trial court granted

the estate’s petition to close Meeker’s

estate as insolvent. The court’s order

provides in pertinent part as follows:

1. The Overmyers’ objections to

vii

Petition to Close Estate and

Accounting of Executor, Further

Objection to Accounting, Petition for

Executor to Account for Rents and

Profits and Petition for the Court to

Marshall Assets are hereby overruled

and denied.

2. The $250,000.00 claim of the

Overmyers allowed by the Court

against the Estate of Arthur C.

Meeker does not have any priority

whatsoever over the claims of [other

creditors], and instead constitutes

nothing more than an unsecured claim.

3. Overmyer’s Petition for Executor

to Account for Rents and Profits and

Petition for the Court to Marshall

Assets are premised on their

incorrect position that they are

secured creditors and have specific

lien rights in the cash held by the

Executor. Since the Court has

determined that Overmyers are

unsecured creditors only, there is no

need for the Court to hear evidence

on where the cash held by the

Executor_came from, since there is no

dispute as to what is held, but only

as to whom is entitled to such

caen....

(R. 223). It is from this order that

the Overmyers appeal.

DECISION

[2] The Overmyers now argue that the

"equity of redemption, to which [their]

viii

vendor’s lien also attached, applies to

rents, issues, and profits of mortgaged

land sold on foreclosure, if the rents

be considered as ‘also mortgaged.’ "

(FN1) Overmyers’ Brief, p. 28. In

support of their argument, the Overmyers

direct us to Federal Land Bank of

Louisville v. Schleeter, 208 Ind. 9, 194

N.E. 628 (1935), (Schleeter II ),

wherein our supreme court denied Federal

Land Bank’s petition for rehearing.

However, the facts of the Schleeter

cases do not support the Overmyers’

contentions.

First, in Federal Land Bank of

Louisville v. Schleeter, 208 Ind. 9, 193

N.E. 378 (1934), (Schleeter I ), our

Supreme court was asked to determine

whether the trial court erred when it

denied Federal Land Bank’s petition for

the appointment of a receiver. There

was no such petition in this case.

Next, in Schleeter II, our supreme court

provided as follows:

A mortgage on the land carries with

it every beneficial interest which

would include the rents, issues, and

profits; but if it were not so, and

the rents, issues and profits were

considered as mortgaged, in addition

to the land, so that upon foreclosure

not only the land, but the rents,

issues and profits must be sold, the

right of redemption applies to the

latter.

Schleeter, 194 N.E. at 629. Here,

there was no land mortgage between

Meeker and the Overmyers, and the rents,

issues, and profits were not considered

as mortgaged. Rather, the Overmyers’

had a vendcr’s lien which arose by

implication of law in favor of them

*1275. to secure the payment of the

unpaid purchase price of their farm._

See Lincoln, supra.

Further, we have previously stated

that a foreclosure sale terminates the

right of redemption. Patterson v.

Grace, 661 N.E.2d 580 (Ind.Ct.App.1996),

Vanjani v. Federal Land Bank of

Louisville, 451 N.E.2d 667, 672, n. 1

(Ind.Ct.App.1983). Therefore, the

January 9, 1990, sheriff’s sale

terminated the Overmyers’ right of

redemption. (FN2) We find no error.

Affirmed.

RILEY and ROBERTSON, JJ., concur.

FN1. The Overmyers acknowledge that

there was no surplus from the

proceeds of the foreclosure sale.

FN2. The Overmyers further argue as

follows:

The trial court’s final judgment that

there was no need for the Court to

hear evidence on where cash held by

the Executor came from "... since the

Court has determined that Overmyers

are unsecured creditors only, ..."

(br. supra p. 16), is reversible

error_if the court’s interlocutory

order that Overmyers are unsecured

creditors, having no specific lien

rights in cash assets of the estate,

is contrary to our holding in Lincoln

Nat. Life Ins. Co. v. John W. and

Elizabeth Overmyer, supra.

The Overmyer’s brief, p. 26.

(Emphasis added). Because we have

found that the trial court’s order is

not contrary to the holding of

Lincoln, we need not address this

issue."

Findings of Fact & Conclusions of La

of Circuit Court White County, "epee

"STATE OF INDIANA) IN THE WHITE CIRCUIT

)ss: COURT

COUNTY OF WHITE ) 1994 TERM

IN RE THE ESTATE OF )

ARTHUR C. MEEKER, )

Deceased, )

) CAUSE NO 10595,

NATIONAL CITY BANK )C-320-85

(formerly known as

the First National

Bank of Logansport,

JOHN W. OVERMYER;

and ELIZABETH

OVERMYER; KERLIN

ELEVATOR and CROP

FERTILITY

SPECIALISTS, INC.,

Claimants

ORDER GRANTING EXECUTOR’S PETITION TO

CLOSE ESTATE AS INSOLVENT, OVERRULING

OVERMYERS’ OBJECTIONS TO EXECUTOR’ S

"Filed Oct 06 1994

Faye L. Lowery

Clerk White

Circuit Court"

— a =

PETITION DENYTI VE :

FOR THE COURT TO MARSHALL ASSETS AND

OVERMYERS’ PETITION FOR THE EXECUTOR

TO ACCOUNT FOR RENTS AND PROFITS

Comes now Ivan Meeker, Executor of

the Estate of Arthur C. Meeker, and

files his Petition to Close Estate as

Insolvent, in the following words and

figures, to-wit: (H.I.), and comes now

John W. Overmyer and Elizabeth Overmyer,

Claimants in the Arthur C. Meeker

Estate, and file their Objections to

Meeker’s Motion to Close Estate and

Final Account, Petition for Executor of

Account for Rents and Profits, and their

Petition for the Court to Marshall

Assets, in the following words and

figures, to-wit: (H.I.)

And the Court after considering said

Motions, and the briefs and memorandum

filed by the Overmyers, Meeker and the

National City Bank, and after hearing

the argument of counsel for Overmyers,

Meeker and the National City Bank in

open court on September 19, 1994, and

otherwise being duly advised in the

premises, now finds and rules as

follows:

1. The Overmyers’ objections to

Petition to Close Estate and Accounting

of Executor, Further Objection to

Accounting, Petition for Executor to

Account for Rents and Profits and

Petition for the Court to Marshall

Assets are hereby overruled and denied.

2. The $250,000.00 claim of the

Overmyers allowed by the Court against

the Estate of Arthur C. Meeker does not

have any priority whatsoever over the

claims of the National City Bank, Kerlin

Elevator or Crop Fertility Specialists,

Inc., and instead constitutes nothing

more than an unsecured claim.

3. Overmyers’ Petition for Executor

to Account for Rents and Profits and

Petition for the Court to Marshall

Assets are premised on their incorrect

position that they are secured creditors

and have specific lien rights in the

cash held by the Executor. Since the

Court has. determined that Overmyers are

unsecured creditors only, there is no

need for the Court to hear evidence on

where the cash held by the Executor came

from, since there is no dispute as to

what is held, but only as to whom is

entitled to said cash.

4. The Executor mistakenly failed to

mention the Overmyers’ unsecured claim

in the amount of $250,000.00 in his

Petition to Close Estate as Insolvent.

This $250,000.00 claim of John W. and

Elizabeth Overmyer is hereby ordered

added to the claims of the National City

Bank, Kerlin Elevator and Crop Fertility

Specialists, Inc. referenced in

paragraph 3 of the Executor’s Petition

to Close Estate as Insolvent.

5. The Executor’s Petition to Close

Estate as Insolvent is hereby granted.

All of the remaining assets of the

Estate of Arthur C. Meeker shall be

distributed pro-rata to the National

City Bank, Kerlin Elevator, Crop

Fertility Specialists, Inc. and John W.

and Elizabeth Overmyer based upon the

size of these claimants’ respective

approved claims and/or judgments after

considering any post-judgment interest

xiii

.——r as? «

Ar a -

accrued on the same up to the time of

distribution.

6. There is no just reason for

delay, and, pursuant to Trial Rule 54(B)

the Court directs the entry of judgment

on each of these findings.

ALL OF WHICH IS HEREBY ORDERED,

ADJUDGED AND DECREED this 19 day of

September, 1994.

/s/

R. PERRY SHIPMAN, Special Judge

White Circuit Court

Distributed to All Counsel of Record

"Filed Oct 06 1994

Faye L. Lowery

Clerk White Circuit Court" "

Appellants’ Petition to Transfer

. IN THE

SUPREME COURT OF INDIANA

CAUSE NO:

(COURT OF APPEALS CAUSE NO: 91 A04-

9412-CV-488)

JOHN W. OVERMYER, Deceased, &

ELIZABETH OVERMYER, His Widow,

APPELLANTS,

eee ee ee eee ee

"Filed March 21, 1996

H. John Okeson

Clerk of the

Indiana Supreme Court

Court of Appeals

Xiv

and Tax Court"

-v- )

Appeal From The

White Circuit Court

IVAN MEEKER, EXECUTOR )

(Cause No: 10595)

Of The Estate of )

Honorable R. Perry

Arthur C. Meeker, Deceased; )

Shipman, Special Judge

NATIONAL CITY BANK, INDIANA,

CROP FERTILITY SPECIALISTS,

KERLIN ELEVATOR, &

LINCOLN NATIONAL LIFE INSURANCE CO.

eee eee ee

APPELLEES

APPELLANTS’ PETITION TO TRANSFER

Appellants, by counsel, for their

petition to transfer, respectfully show

and move the Court as follows:

1. The Court of Appeals decided this

case with a written opinion, which was

handed down on March 6, 1996, and was

against the appellants. No petition for

rehearing was filed.

2. Appellants are secured creditors

of the above named estate by the law of

the case, Lincoln Nat'l Life Ins. Co. v.

Overmyer (Ind. App. 1988) 530 NE 2d.

784, tr. den., which established that

their purchase-money vendor’s lien,

subordinate only to the first mortgage

of Lincoln National Life Insurance Co.

("Lincoln"), attached to decedent’s

equity of redemption in a farm (the

"Overmyer farm") which became an asset

of the estate, Matter of Lemond (Ind &

Ind. App. 1980) 413 NE 2d. 228, 232.

3. On August 31, 1985, the estate

was indebted to appellants, on their

land contract with decedent, in the

amount of $640,879, and interest has

accrued, and is accruing, on this amount

Since that time, Lincoln, id.

4. After appellants’ security is

exhausted, the balance of the debt is an

Xvi

unsecured claim in the estate, entitling

appellants to a pro rata share of money

in the hands of the executor, La Plante

v. Convery (Ind. 1884) 98 Ind. 499; Ind.

Code 29-1-14-9.

5. The opinion is in error in that:

A. The opinion fails to give a

statement in writing of a substantial

question which appellants stated as

"Issue II" of their original brief and

argued at pp. 34-48, namely, "By

Refusing to Hear Evidence Concerning The

Source of Cash Assets of the Estate, the

Trial Court Failed to Perform Its Duty

To Correct Possible Errors in the

Executors’s Final Report, And Could Not

Fulfill Its Responsibility Of

Designating The Creditors and Amounts to

Whom Distribution of the Estate Should

Be Made." The opinion fails to give a

XVil

statement on the substantial question

argued, that since the executor nad the

burden of proof, Diaz v. Duncan (Ind.

App. 1980) 406 NE 2d. 991, 1002, the

lower court’s refusal to hear evidence

caused a complete failure of proof on

the issues of preferential payments and

correctness of accountings and the

judgment approving the final account and

distributions violated due process,

(orig. DSi 20.3.

No evidence was presented at the

final hearing showing that the debt due

First National Bank of Logansport

("FNBL" now National City Bank, Indiana)

had a "...preference under the laws of

this state," IC 29-1-14-9 (6). FNBL’s

unsecured claim entitled it to payment

of 74.4% of assets available for

distribution. The lower court refused to

XViii

aoe ey

EE ee ee en a ee ee Gee ee ee

permit appellants to examine the

executor at a meaningful hearing but

approved his payments and proposed

distribution to FNBL totaling $523,141--

98%--of cash available to pay unsecured

creditors.

B. As creditors of the estate,

appellants were entitled, by Ind. Code

29-1-17-2, to a hearing on the final

account at which the executor presented

all available evidence and made full

disclosure of all facts necessary for

proper distribution of the estate, and,

was subject to cross examination, Diaz,

supra. By affirming the lower court’s

decision, that evidence at the final

hearing was unnecessary, "... since the

Court has determined that Overmyers are

unsecured creditors only...," (slip

op.p.6,8), and, denying appellants the

xix

right to cross-examine the executor, the

opinion contravenes the following ruling

precedents of this Court:

STATE v SUPERIOR COURT OF MADISON COUNTY

(Ind. 1964) 199 NE 2d 88, 93, 94

"Regardless of the conflict on this

point, these critical proceedings

lacked, without question, the bare

requirements of due process, namely,

the right to be informed specifically

of the charges and a reasonable

opportunity to be heard thereon.

‘It is a fundamental doctrine of the

law that a party to be affected by a

personal judgment must have a day in

court, or an opportunity to be heard.

In this connection, it is sometimes

declared broadly that everyman is

entitled to an opportunity to be

heard in a court of law upon ever

question involving his rights or

interests, before he is affected by

any judicial decision on the

question. The judgment of a court

without hearing the party or giving

him an opportunity to be heard is not

a judicial determination of his

rights, and is not entitled to

respect in any other tribunal.’ 30A

Am.Jur., Judgments, § 26.