Brames v. Crates, 3-477A98

• Decision Date: 22 January 1980
• Docket Number: No. 3-477A98,3-477A98
• Parties: 28 UCC Rep.Serv. 419 Byron L. BRAMES and Joanne E. Brames, Appellants (Plaintiffs Below), v. Chester W. CRATES, Appellee (Defendant Below).
• Court: Indiana Appellate Court

Page 437

399 N.E.2d 437

28 UCC Rep.Serv. 419

Byron L. BRAMES and Joanne E. Brames, Appellants (Plaintiffs Below), v. Chester W. CRATES, Appellee (Defendant Below).

No. 3-477A98.

Court of Appeals of Indiana, Third District.

Jan. 22, 1980.

David K. Hawk, Parrish, Eggers, Larson & Burt, Fort Wayne, for appellants.

Edward E. Beck, Shambaugh, Kast & Beck, Stephen J. Williams, Pichon & Williams, Fort Wayne, for appellee.

HOFFMAN, Judge.

This is an appeal from an action in which plaintiffs-appellants Byron L. Brames and Joanne E. Brames sued defendant-appellee Chester W. Crates upon an alleged promissory note. On July 9, 1975, the trial court granted plaintiffs' motion for summary judgment and awarded them $62,781.22. Thereafter defendant filed a motion to correct errors which the court granted, setting aside the entry of summary judgment. After the cause was submitted for trial, the court entered the following findings of fact and conclusions of law:

"FINDINGS OF FACT

"1. The plaintiff Byron L. Brames is a farmer, who at all times involved in this matter farmed his own farm, as well as land owned by his father and his uncle.

"2. That the defendant Chester W. Crates was the President and principal stockholder of Crateco, Inc. which operated a grain elevator at Dixon, Indiana and is in the area of the farms owned and farmed by the plaintiff Brames.

"3. That during the year 1972 the plaintiff stored 2728 bushels of soy beans at the Crateco elevator which was owned by Crateco, Inc. and managed and operated by Jon Crates.

"4. That in the year 1974 the plaintiff stored at the elevator certain crops consisting of soy beans, corn and wheat.

"5. That in addition to the grain owned by the plaintiff he also stored grain owned by Luke Brames and Paul Brames.

"6. That on every occasion of the storage of grain with Crateco the plaintiff was given a weigh ticket as a receipt, which ticket demonstrated the weight of the grain as well as the moisture content thereof.

"7. That from time to time settlement was made with the plaintiff on grain other than that involved in this matter, at which time the plaintiff surrendered his weigh bill "8. That on December 23, 1974 the plaintiff was paid the sum of $11,800 by Crateco, Inc. for 4000 bushels of corn, but on that occasion the plaintiff did not have the weigh tickets with him and they accordingly were never marked paid.

and received the current market price, less storage charges, drying charges and discounts for moisture.

"9. That on December 30, 1974 plaintiff was paid the sum of $15,000 by Crateco, Inc. as an advance on shelled corn, and being an advance and not a sale, at that time no weigh tickets were delivered.

"10. That on or about the 29th of January, 1975 wind caused damage to the large grain bin, at which time it was discovered that the storage bins did not contain all of the grain which should have been in storage, according to the weigh bills.

"11. That thereafter the plaintiff became worried as to the financial position of Crateco, Inc. and sought security for the grain owned by him which should have been in storage.

"12. That the plaintiff talked to the defendant in order to receive from the defendant assurances that he would be paid for the grain stored.

"13. That the plaintiff Byron and the defendant arranged to meet at the Monroeville branch of the Fort Wayne National Bank on March 7, 1975.

"14. That while at the bank an instrument in the form of a note was prepared and was given by the defendant to the plaintiff Byron as a means of securing the grain of the plaintiffs against Crateco, Inc.

"15. That the instrument represented a promise by the defendant to pay $73,224.

"16. That in figuring the amount of security to be given, a portion of the soy beans was figured at $11.50 a bushel, the balance of the soy beans at $8.00 a bushel; wheat at $4.50 a bushel; corn at $3.50 a bushel.

"17. That on March 7, 1975, the market prices for these commodities were as follows:

                Corn ....... $2.54 a bushel
                Soy Beans .. $5.06 a bushel
                Wheat ...... $3.25 a bushel
                

"18. That while this was the first contact by the plaintiff with either the defendant or Crateco, Inc. regarding the balance of grain in storage, it did not represent a sale or a demand for payment at the then existing market price, but the instrument was deemed sufficient to guarantee to the plaintiff the fair market value of his crops if and when he chose to dispose of the same.

"19. That at that time Crateco, Inc. should have had in storage belonging to the plaintiffs the following amounts of grain:

                Corn ....... 4388 bushels
                Soy Beans .. 3430 bushels
                Wheat ....... 672 bushels
                

"20. That the plaintiff has never made a specific demand for payment on any particular date, but has only requested payment of the note in full.

"21. That the defendant is entitled to credit for the $15,000 advance, which credit is reflected on the face of the instrument, and the defendant has paid to the plaintiff since the commencement of the lawsuit an additional sum of $17,500.

"22. That during the period in question when the plaintiff could have, or should have, made demand for settlement, the corn prices varied between $2.54 and $3.50 a bushel; soy veans (sic) between $5.06 and $8.00 a bushel; wheat between $3.25 and $4.50 a bushel.

"23. That based upon a price midway between the two figures plaintiffs would be entitled to $13,251.76 for corn; $22,397.90 for beans; and

$2,604 for wheat, or a total of $38,253.66.

CONCLUSIONS OF LAW

"1. The instrument dated March 7, 1975 upon which plaintiffs' complaint is based was a security instrument given to secure the debt of a corporation, substantially owned by the defendant, to the plaintiffs and was not intended as a negotiable instrument nor was the same negotiated.

"2. The plaintiff is entitled to recover upon said instrument the reasonable value of the debt which it was given to secure.

"3. The plaintiff is entitled to recover the debt of Crateco, Inc. to the plaintiffs, less payments already made, or the sum of $5,753.66, plus attorney fees in the amount of $1,150, but without interest since the demand was unliquidated.

"Judgment for plaintiff for $6,903.66 and costs."

Plaintiffs assert the trial court erred in granting defendant's motion to correct errors which set aside the summary judgment entered in their favor. To fortify this assertion, plaintiffs rely on the following portion of Ind. Rules of Procedure, Trial Rule 59(E)(7):

"In its order correcting error the court shall direct final judgment to be entered or shall correct the error without a new trial unless such relief is shown to be impracticable or unfair to any of the parties or is otherwise improper; and if a new trial is required it shall be limited only to those parties and issues affected by the error unless such relief is shown to be impracticable or unfair. If corrective relief is granted, the court shall specify the general reasons therefor." (Emphasis supplied.)

Plaintiffs insist that insofar as a summary judgment hearing is a trial, the action of the court in setting aside the summary judgment constituted the grant of a new trial which required compliance with TR. 59(E)(7). Hence it is suggested that the court erred in failing to state its general reasons for overruling the summary judgment entry. This contention must be rejected since a summary judgment proceeding is not a trial as its purpose is to avoid a trial where there is no issue as to a material fact. Deckard v. Mathers (1972), 152 Ind.App. 440, 284 N.E.2d 92; Walsh v. Farm Bureau Co-op. (1969), 146 Ind.App. 42, 252 N.E.2d 609; Verplank v. Commercial Bank (1969), 145 Ind.App. 324, 251 N.E.2d 52; Babchuk v. Heinold Elevator Co., Inc. (1969), 144 Ind.App. 328, 246 N.E.2d 211. In contrast to a trial where the purpose is to try the facts and determine the preponderance of the evidence, a summary judgment proceeding is a procedure for applying the law to the facts where no factual controversy exists. Amer. States Ins. Co. v. State ex rel. Jennings (1972), 152 Ind.App. 422, 284 N.E.2d 873. There was no error here.

Plaintiffs also contend they were entitled to recover as a matter of law upon the alleged promissory note absent a finding of a defense thereto. They argue that all facts not embraced within the special findings are deemed as not proven by the party having the burden of proof on the issue. Thus plaintiffs reason that insofar as the trial court did not make specific findings on the defenses of lack of delivery, failure of consideration or mutual mistake, said omissions demonstrate as a matter of law that defendant failed to sustain his burden of proof.

Under pre-Ind. Rules of Procedure, Trial Rule 52 cases, there was a presumption that all facts not contained in requested special findings of fact were regarded as not proved by the party having the burden of proof. Patterson v. Gary Land Co. (1934), 101 Ind.App. 644, 188 N.E. 685; Kerfoot v. Kessener (1949), 227 Ind. 58, 84 N.E.2d 190. However, TR. 52(D) now provides that "(t) he court's failure to find upon a material issue upon which a finding of fact is required by this subdivision or this rule shall not be resolved by any presumption and may be challenged under subdivision (B) of this rule; . . ." See also Daly v. Nau (1975), Ind.App., 339 N.E.2d 71. Since plaintiffs have charged that defendant failed to sustain his burden of proof, the inquiry then turns to whether there was sufficient evidence to support the trial court's determination that the instrument sued upon was intended as a security instrument and not as a negotiable instrument.

Viewing the evidence in a light most favorable to the judgment reveals that on January 29, 1975 a large storage bin at the Crateco facilities collapsed at which time it was discovered that none of the bins contained an amount equal to the grain which had been stored there. As a result plaintiff Byron Brames became concerned about the...