American Nat. Bank & Trust Co. v. St. Joseph Valley Bank

• Decision Date: 12 July 1979
• Docket Number: No. 3-778A162,3-778A162
• Citation: 391 N.E.2d 685,180 Ind.App. 546
• Parties: AMERICAN NATIONAL BANK & TRUST CO., Plaintiffs, v. ST. JOSEPH VALLEY BANK, Defendant, Third Party Plaintiff-Appellee, v. John W. AUGUSTINE and Nancy Lee Augustine, Third Party Defendants-Appellants.
• Court: Indiana Appellate Court

Page 685

391 N.E.2d 685

180 Ind.App. 546

AMERICAN NATIONAL BANK & TRUST CO., Plaintiffs, v. ST. JOSEPH VALLEY BANK, Defendant, Third Party Plaintiff-Appellee, v. John W. AUGUSTINE and Nancy Lee Augustine, Third Party

Defendants-Appellants.

No. 3-778A162.

Court of Appeals of Indiana, Fourth District.

July 12, 1979.

Donald C. Swanson, Jr., Fort Wayne, for third-party defendants-appellants.

Geoffrey K. Church, Church, Metreiver, Warrick & Weaver, Elkhart, for third-party plaintiff-appellee.

YOUNG, Judge.

ON PETITION FOR REHEARING

The petitioner has raised two issues: first, whether there was sufficient evidence to support the judgment on the theory of unjust enrichment to the Augustines; and second, whether the judgment may be upheld on the theory of estoppel.

The petitioner directs our attention to evidence which it claims supports a finding that the Augustines were indebted to Hanover in the amount of the check mistakenly paid by the petitioner-Bank. This evidence would support a finding that under the contract the Augustines promised to pay such an amount. This is not the issue however. In Angola Brick & Tile Co. v. Millgrove School Twp., (1920) 73 Ind.App. 557, 127 N.E. 855, 857, a debt is defined generally as "a specific sum of money due from one person to another, and denotes, not only the obligation of the debtor to pay, but The right of the creditor to receive and enforce payment." (emphasis added). In the present case, the Augustines promised to pay for, and Hanover promised to build, a house. These promises are consideration for each other and mutually dependent. For this reason the failure of one party to perform discharges the other. Kroeger v. Kastner, (1937) 212 Ind. 649, 10 N.E.2d 902; See generally 17A C.J.S. Contracts § 452 (1963). This conditional aspect of mutual promises forming a contract prevents their being debt, since neither party can enforce the other's promise without performing his own. Accord, Indian Refining Co. v. Taylor (1924) 195 Ind. 223, 143 N.E. 682 (an oil inspector's fees became debt an obligation to pay a sum certain at the time of the inspection). A breaching party may recover, apart from the contract, in Quantum meruit.

A party who has breached a contract cannot take advantage of his breach; and he cannot set it up to relieve him from his contractual obligations. Thus, where a party has breached a contract, even an executory contract, he may not ordinarily recover back money paid thereunder. However, where, despite a breach, performance of a building contract is completed and the value of the property is enhanced thereby, the recipient of the improvement is liable for the value of the improvement.

17A C.J.S. Contracts § 458 (1963). Hanover was not entitled to keep payments made pursuant to the contract without performing its part. The evidence that Hanover did not perform its promise is undeniable, thus the Augustines' promise under the contract never became a debt to Hanover and Hanover was not entitled to keep the proceeds of the check mistakenly credited to its account beyond the value of the work actually done. It is this latter value for which the Augustines were indebted to Hanover and it is this latter value which has not been sufficiently established so as to support the judgment.

The petitioner argues...