Dreyer v. Hart

47 N.E. 174, 147 Ind. 604, 1897 Ind. LEXIS 67
CourtIndiana Supreme Court
DecidedMay 14, 1897
DocketNo. 18,039
StatusPublished
Cited by4 cases

This text of 47 N.E. 174 (Dreyer v. Hart) is published on Counsel Stack Legal Research, covering Indiana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dreyer v. Hart, 47 N.E. 174, 147 Ind. 604, 1897 Ind. LEXIS 67 (Ind. 1897).

Opinion

Howard, J.

On and before April 2, 1892, the appellee, Milton R. Hart, was the owner of about 1,215 acres of land in Lake county, subject to certain incumbrances thereon, amounting to about $25,000. On that day, through one Edward A. Linn, a Chicago real estate dealer, he negotiated the sale of the land at $200 per acre, taking for about one-half the purchase price certain Minneapolis incumbered real estate. The nominal purchaser was one George Krech, an insolvent person who assumed the payment of the $25,000.00 incumbrance, paid $5,000.00 cash, and for the balance [603]*603gave his notes secured by a trust deed on the land sold; the first note being for $9,700.00, payable November 15, 1892; the second for $40,000.00. payable November 15, 1893, and the third for $63,060.00, payable November 15, 1895. The first note, being that fo.r $9,700.00, has been paid; but the prior incumbrances, amounting to $25,000.00, besides interest and taxes, have not been paid; nor have the remaining notes, those for $40,000.00 and $63,060.00 respectively, ever been paid.

The questions for decision have reference to the collection of a note for $10,494.00, dated December 6, 1892,' and payable November 18, 1893. This note was given by the appellee, Milton R. Hart, to the said Edward A. Linn, and with it was given, as collateral security, the $40,000.00 note above mentioned, due November 15, 1893, three days before the date when the note in suit was made payable.

The complaint treats of the $10,494.00 note as an or: dinary promissory note, secured by the $40,000.00 note as collateral, and asks for the collection of both notes and the foreclosure of the trust deed securing the latter, nothing being said as to the consideration given for the principal note.

The appellee answered, first by general denial, and second by special answer and cross-complaint. In the special answer it was averred that the appellants and the said Edward A. Linn were real estate agents, and that on April 2, 1892, the appellee entered into negotiations with them for the sale of his said lands in Lake county, agreeing that the property should be sold for $200 per acre, one-third cash, balance in installments secured by mortgage or trust deed,'and that the said agents should receive ten per cent, of the purchase price for making such sale. That the sale actually made was for $5,000.00 cash, balance in almost [604]*604worthless Minnesota lands-, and the three installment notes already mentioned; that to induce appellee to ratify said sale it was agreed that no commission should be paid until all the purchase money notes should be paid; that afterwards, on December 6,1892, the $40,000.00 and $63,000.00 notes being unpaid, the said real estate agents applied to appellee to execute to them his promissory note to evidence the amount yet due on their commission, and thereupon agreed that the note so to be executed should in no event be payable until all the said purchase money notes should be paid, and that this agreement should be embodied in such commission note; that the $10,494.00 commission note in suit was then drawn up and signed by appellee, but by the inadvertence and mutual mistake and oversight of the parties the note was written as it now appears, and appellee did not learn until thereafter that the terms and conditions as agreed upon were not embraced in the note, and that he would not have executed the note had he known that a part of the agreement as made between him and Linn had been omitted from the note. A like statement was made in the cross-complaint, and, as the purchase money notes were both now due and had not been paid, the prayer was that the $10,494.00 note be declared void and canceled and the $40,000.00 note be ordered delivered to the appellee.

The appellants replied to the answer and answered the cross-complaint by general denial, and also by saying that at the time the commission note was due and payment demanded, appellee had not made the defense or claim here insisted upon, but had said that he would proceed to foreclose and collect the $40,000.00 note then due, and pay the commission note out of the proceeds.

Appellee afterwards, on leave granted, filed an ad[605]*605ditional pleading, which he calls an answer and cross-complaint, and which the court seems to have treated as a cross-complaint, but which appellants insist was but an answer. In this pleading the facts were again set up, substantially as before; but it was averred that the commission was to be five per cent, on the entire purchase price of the land. It was further averred in this pleading that in order to induce appellee to ratify the unauthorized sale by which only $5,000.00 cash was paid, and according to which appellee was to receive in part payment the Minnesota mortgaged lands, it was agreed that the commission should not be paid unless the grantee, Krech, or his assigns, should first pay the $40,000.00 note; and, also, that in case such purchase money note should not be paid, no commission should ever be paid. It was also averred that when the commission note in suit for $10,494.00 was executed, it was agreed that it should contain the stipulation that the note should not be paid until the $40,000.00 purchase money note given as collateral security should first be paid, and that appellee has never had possession of said commission note. There is a prayer that if the note as drawn does not express the agreement of the parties in this respect, it should be so reformed as to make it of the same tenor and effect as was agreed to by them.

In their response to this pleading the appellants treat the same as a cross-complaint and also as an answer; and their answer to the cross-complaint and reply to the answer are substantially the same as the answer and reply to appellee’s first cross-complaint and answer, that is, by general denial, and also by averring specially that when the commission note was due and payment demanded appellee did not make the defense or claim here insisted upon, but said that he would himself proceed to collect the $40,000.00 pur[606]*606chase money note then due and pay the commission out of the proceeds.

The note in suit reads as follows:

“$10,494. Chicago, 111., Dec. 6th, 1892.
On or before November 18th, 1893, after date, for value received, I promise to pay to the order of E. A. Linn, ten thousand, four hundred and ninety-four dollars, at his office in Chicago, 111., with interest at the rate of six per cent, per annum, after date, having deposited with the legal holder hereof, as collateral security, note and trust deed dated April 2, 1892, by George Krech, said note being for forty thousand dollars, due November 15, 1893, hereby authorizing said Linn to collect said note at maturity and to apply all interest collected on payment of the principal hereof and to pay me the balance collected on said note, after this note is paid. It being understood that the payment of this note is conditioned upon collection of said Krech note, interest having been paid on said Krech note, October 2, 1892. Milton R. Halt.”

The court found for the appellants on their complaint and for the appellee on his cross-complaint, finding that the note should be reformed so that the condition therein should read as follows: “It being understood that the payment of this note is conditional upon the payment in full of said Krech note.” Judgment was entered accordingly.

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Bluebook (online)
47 N.E. 174, 147 Ind. 604, 1897 Ind. LEXIS 67, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dreyer-v-hart-ind-1897.