Boswell v. Lyon

Decision Date24 March 1980
Docket NumberNo. 2-1076A387,2-1076A387
Citation401 N.E.2d 735
PartiesCharles E. BOSWELL and Stephen J. Snyder, Appellants (Defendants Below), v. Marcia K. LYON, Appellee (Plaintiff Below), and Mark D. Batties, and Charles E. Roberts, Jr., Appellees (Co-Defendants Below).
CourtIndiana Appellate Court

David B. Hughes, Hughes & Hughes, Indianapolis, for appellants.

John P. Price, Martha Schmidt and Robert C. Wolf, Bingham, Summers, Welsh & Spilman, Indianapolis, for appellee.

BUCHANAN, Chief Judge.


Appellants Charles E. Boswell (Boswell) and Stephen J. Snyder (Snyder) appeal from the trial court's summary judgment establishing their liability on a land sale contract in the amount of $21,896 plus interest and attorneys fees (a total of $29,406), claiming that there were genuine issues of material fact as to (1) whether "assignment" was an ambiguous term in the 1960 land sale contract, (2) whether a novation occurred, and (3) whether there was a discharge of the surety relationship.

We affirm.


Boswell and Snyder entered into a contract with Martha S. Hadley on September 9, 1960, for the conditional sale of an apartment building located at 2208 Park Avenue in Indianapolis (the 1960 contract). The contract was a standard form contract prepared by the Indianapolis Bar Association. Purchase price was $30,000, to be paid by a $3,000 down payment, and monthly payments of $135. The unpaid balance was to bear interest at five (5%) percent per annum. A final balloon payment of the remaining balance was due not later than March 9, 1974.

The contract contained this provision as to assignment:

6. Assignment of contract. Neither this contract, Purchaser's interest therein, nor Purchaser's interest in the Real Estate, shall be sold, assigned, pledged, mortgaged, or transferred by Purchaser without the written consent of vendor.

In 1962, Boswell and Snyder entered a "contract on a contract" to sell their interest under the 1960 contract to Robert E. and Marcia S. Brazelton. In 1964, this contract was mutually terminated, and Boswell and Snyder resumed management and possession of the property.

On September 25, 1964, Boswell and Snyder assigned their rights under the contract to Mark D. Batties, also a defendant, and Hadley consented to the assignment. The transaction was accomplished by an instrument which stated:


September 25, 1964

This is to certify that for value received and subject to the consent of the owner of the property described in the within Conditional Sales Contract, the undersigned do hereby sell, assign, transfer and set over unto MARK D. BATTIES all of his right, title and interest in and to the said conditional Sales Contract.


/s/ Charles E. Boswell


/s/ Stephen J. Snyder


September 25, 1964

The undersigned hereby accept the above assignment of the within Conditional Sales Contract and hereby expressly agree to be bound by all of the terms and conditions of said Conditional Sales Contract.


/s/ Mark D. Batties


September 25, 1964

The undersigned, owner of the property described in the within Conditional Sales Contract, hereby consents to the above assignments and acceptance thereof.


/s/ Martha S. Hadley

/s/ By Elmer E. Lyon

/s/ Attorney in Fact

Hardley assigned her rights as owner and vendor under the contract to Marcia K. Lyon (Lyon), on July 10, 1968. No issue concerning this assignment of the vendor's rights has been presented.

On February 1, 1969, Batties assigned his rights under the contract to Charles E. Roberts, Jr., also a defendant. Lyon consented to that assignment. The instrument used was the same form as used in the 1964 assignment, with Batties as the assignor, Roberts as the assignee, and Lyon as the vendor giving consent.

In March, 1973, Lyon's attorney notified Snyder by letter that the final payment on the 1960 contract was due March 9, 1974, and that Boswell and Snyder may face potential liability under the contract because of the apparent likelihood of a default. The letter indicated that the small payments under the contract had left a large balance due on the final payment. Furthermore, the current assignee under the contract, Roberts, did not appear to be in a financial position to meet the large balloon payment.

Boswell, Snyder and Batties were all notified by letter of Roberts' default on two monthly payments in 1973.

The last payment under the contract was made January 9, 1974. On March 9, 1974, the remaining contract balance of $21,896 came due, but remained unpaid. Suit was then filed by Lyon against Boswell, Snyder, Batties and Roberts.

After the initial filing of a motion for summary judgment by Lyon, seven affidavits were filed: two by Elmer E. Lyon, the plaintiff's attorney, one by Martha S. Hadley, and two each by defendants Boswell and Snyder.

A default judgment for $29,406 plus costs and interest was entered against Batties on June 7, 1974. A summary judgment for the same total was entered against Roberts on July 22, 1975; the property at 2208 Park Avenue was ordered sold and the proceeds applied to the judgment. Finally, on September 8, 1976, a final judgment was entered against Boswell and Snyder on Lyon's motion for summary judgment. Damages of $29,406 plus costs and interest were awarded, and the property at 2208 Park Avenue was again ordered sold and the proceeds applied toward the judgment. It is from this judgment that Boswell and Snyder appeal.

To further put this case in perspective, we should disclose the condition of the apartment house at 2208 Park Avenue. In April, 1975, nearly a year after this action was commenced, an order to demolish the apartment building was issued by the Division of Code Enforcement of the City of Indianapolis. The order stated that the building was dangerous and unsafe.

On May 29, 1975, the Division of Public Health of the Health and Hospital Corporation of Marion County cited the apartment building for numerous violations of the minimum standards for housing, and prohibited occupation of the dwelling unless all defects were corrected. Failing such corrections, the building was ordered razed by August 5, 1975.

As of September 1, 1976, the property, which was ordered sold to satisfy a nearly $30,000 judgment, had a fair market value of $3,000.


ISSUE ONE Was the "assignment" clause of the 1960 contract ambiguous, thereby creating a material issue of fact as to the intent of the parties in using that clause?

ISSUE TWO Was there a genuine issue of material fact as to whether ther was a novation when the 1960 contract was assigned, accepted, and consented to in 1964?

ISSUE THREE Was there a genuine issue of material fact as to whether Boswell and Snyder were discharged under the 1960 contract by the 1969 assignment from Batties to Roberts, done with the consent of Lyon, but without notice to Boswell and Snyder?

Scope of Review

It is necessary for us to somewhat tediously recite the standards for reviewing the grant of a summary judgment.

A summary judgment may be granted only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits and testimony, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (emphasis added) Ind.R.Tr.P. 56(C). In determining whether a material issue of fact exists, the facts alleged by the party opposing the motion must be taken as true, and all doubts must be resolved against the proponent of the motion. Crase v. Highland Village Value Plus Pharmacy (1978), Ind.App., 374 N.E.2d 58; St. Joseph Bank & Trust Company v. The Wackenhut Corporation (1976), Ind.App., 352 N.E.2d 842; Mayhew v. Deister (1969), 144 Ind.App. 111, 244 N.E.2d 448. Even if the facts are undisputed, all reasonable inferences must be resolved against the moving party. St. Joseph Bank & Trust Company v. The Wackenhut Corporation, supra. Only if from this viewpoint there is no genuine issue as to any material fact may the summary judgment be sustained. Kleen Leen, Inc. v. Mylcraine (1977), Ind.App., 369 N.E.2d 638; Mayhew v. Deister, supra.

The burden is upon the proponent of the motion to demonstrate the absence of any issue of material fact and that the law has been properly applied. Levy Company v. Board of Tax Commissioners (1977), Ind.App., 365 N.E.2d 796; Swanson v. Shroat (1976), Ind.App., 345 N.E.2d 872.

ISSUE ONE Was the "assignment" clause of the 1960 contract ambiguous, thereby creating a material issue of fact as to the intent of the parties in using that clause?

PARTIES' CONTENTIONS Boswell and Snyder assert that the term "assignment" in the 1960 contract was ambiguous in that it did not state whether the purchasers would remain secondarily liable once the contract was assigned, and that there was a material issue of fact as to the intent of the parties in using that term. Lyon contends the term "assignment" is not ambiguous, and that its use did not contemplate a release of liability for any future assignments.

CONCLUSION The assignment clause of the 1960 contract was not ambiguous, and therefore no genuine issue of material fact existed as to the parties' intent in using that clause.

The cardinal principle in interpreting contracts is to give effect to the meaning and intention of the parties, as expressed in the language of their contract. Colonial Mortgage Co. of Indiana v. Windmiller (1978), Ind.App., 376 N.E.2d 529; Board of Directors, Ben Davis Conservancy District v. Cloverleaf Farms, Inc. (1977), Ind.App., 359 N.E.2d 546,rehearing denied 360 N.E.2d 1039; Miller v. Frankfort Bottled Gas, Inc. (1964), 136 Ind.App. 456, 202 N.E.2d 395. A liberal or technical construction should not be given to an isolated clause thereby defeating the true meaning of the contract. Allied Structural Steel Co. v. State (1971...

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