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Rebel v. National City Bank of Evansville
Citations: 598 N.E.2d 1108; 1992 Ind. App. LEXIS 1438; 1992 WL 220149Docket: 82A01-9204-CV-94
Court: Indiana Court of Appeals; September 15, 1992; Indiana; State Appellate Court
Donald L. Rebel and Charles Reigel appeal a partial summary judgment favoring National City Bank in a foreclosure action. The court affirmed this judgment, addressing two main issues: whether the trial court erred in determining that two promissory notes from Lockyear College to the Bank were renewals of prior debts, thus granting the Bank a superior interest over Rebel's judgment lien, and whether the court of appeals could decide a legal question not addressed by the trial court. The facts indicate that Lockyear College executed a mortgage and several promissory notes to the Bank between 1984 and 1990, with the Bank asserting that the notes in question were renewals of earlier debts incurred before Rebel's judgment lien was established in 1989. Rebel contended that the notes were new debts due to changes in interest rates, which would grant him a superior lien if true. However, Indiana law stipulates that the renewal of a note does not discharge the original lien unless explicitly intended. The court relied on precedents indicating that changes in interest rates do not automatically classify a note as a new debt, supporting the view that the notes were indeed renewals. Consequently, the court upheld the Bank's superior lien and ordered foreclosure on the mortgage. The court affirmed that interest accruing on principal debt is an accessory to the principal debt. Once interest accrues, it may be treated as principal, allowing interest to accrue on the total amount. The municipality's issuance of new bonds and the change in interest rates during renewal did not constitute the creation of new debts, as clarified by the court's ruling. The case of Bowlus v. The Phenix Insurance Co. was distinguished; it involved a miscalculation of compounded interest, which did not invalidate the insurance policy. The court concluded that Rebel failed to demonstrate harm from the interest rate change. Instead, the reduction in interest rates improved Rebel's position because it allowed College to pay less to the bank. Thus, the court upheld that the renewals of debt with changed interest rates were not new debts and maintained the superiority of the bank's renewals over Rebel's lien. Additionally, Rebel's argument regarding two notes held by the Bank, which he claimed reflected future advances after his lien attached, was not preserved for appellate review as it was not presented to the trial court. The appellate court found that the matter involved disputed material facts, making it inappropriate to address Rebel's claims. The court affirmed the trial court's partial summary judgment and remanded for further proceedings.