Daly v. Nau

Decision Date31 December 1975
Docket NumberNo. 3--274A31,3--274A31
Citation167 Ind.App. 541,339 N.E.2d 71
PartiesRaymond E. DALY et al., Appellants (Defendants below), v. Charles J. NAU, Appellee (Plaintiff below).
CourtIndiana Appellate Court

Gilbert Gruenberg and Clyde D. Compton, Hodges, Davis, Gruenberg, Compton & Sayers, Gary, Larry G. Evans, Valparaiso, for appellants.

John J. McDonagh, Hammond, Herbert K. Douglas, Valparaiso, for appellee.

STATON, Presiding Judge.

This appeal involves an action brought by Charles J. Nau against Daly, Stewart and Incentive Capital Corporation, Appellants, to recover damages for tortious interference with the contractual relationship between Nau and Incentive. 1 After a court trial, Nau was awarded damages in the amount of $25,000.00. Appellants raise the following issues on appeal:

Issue One: Is the trial court's special finding no. 22 erroneous?

Issue Two: Is the trial court's award of damages supported by the evidence?

Issue Three: Did the trial court err in its special findings of fact nos. 8, 12, 13, 14, 15, 18, 20 and 24?

The evidence is undisputed that in February 1964, Charles Nau was a job superintendent employed by Universal Delta Central, Inc. (Universal). Universal was a general painting contractor, and in February 1964, Universal was in financial difficulty. Incentive Capital Corporation (Incentive), a small business investment company, had loaned Universal approximately $60,000 in 1963 2 and held a chattel mortgage on certain equipment and inventory of Universal. Brendan Stewart was the president and Raymond Daly was a director of Incentive. 3 On February 21, 1964, Charles Nau came to Chicago upon the invitation of Daly for a meeting regarding Universal. Later in the day, Nau entered into the following agreement, dictated by Daly, with Incentive:

'MEMORANDUM TO: Mr. C. J. Nau

February 21, 1964

REFERRING TO: UNIVERSAL DELTA CENTRAL, INC.

It has been ageed upon today by our company and you to enter into what might be termed a joint venture. Both of us agree to pay $25,000 cash into the above described company. Incentive Capital Corporation agrees to the purchase of all outstanding stock not owned by them if possible, but at least 25% which is now owned by Lou Glaras and T. T. Nau.

From this day forward it is agreed that as superintendent of operations you will receive 50% of the profit and be granted an option to purchase 51% of the stock at the end of three years for your original $25,000.

We have further agreed to help protect you on this investment that you will not be subordinated but will be secured to our loan and that you will be further protected by our chattel on all of the equipment.

It has been agreed that within the next few weeks if you have had time to check the jobs and we have had time to bring books up todate, (sic) we will call a meeting of the creditors and endeavor to settle at some normal percentage.

At the time of writing this memo we own free and clear 50% of the stock of Universal Delta.

/s/ John C. Nagle

John C. Nagle

Vice President

Accepted February 21, 1964:

/s/ Charles J. Nau' Pursuant to this agreement, Charles Nau paid $25,000 to the Bank of Indiana for the benefit of Universal.

Also on February 21, 1964, the Board of Directors of Universal took the following action as disclosed by the Board's minutes:

'The following motion was moved, seconded and unanimously approved:

'RESOLVED, that the investment in Universal Delta Central, Inc. by Mr. Charles Nau of $25,000 is hereby acknowledged and accepted; and, that the company hereby employs Mr. Charles Nau as Consultant at a weekly draw of $200.00 against 50% of net profits before Federal corporation taxes.

'The following motion was moved, seconded and unanimously approved:

'RESOLVED: That the officers of this company are hereby authorized and directed to execute a promissory note in the amount of $15,000 payable in thirty monthly installments of $500.00 each at an interest rate of 5%, said note to be payable to the Pittsburgh Plate Glass Company, a copy of said promissory note being attached hereto and specifically incorporated by reference into and as a part of this resolution;

'FURTHER, that the officers of this corporation are hereby authorized and directed to execute a chattel mortgage of even date with the aforsaid promissory note to the order of Pittsburgh Plate Glass Corporation on all equipment owned by Universal Delta Central, Inc.; . . .'

On March 12, 1964, Universal executed a promissory note to Pittsburgh Plate Glass Company (PPG) for $15,000 payable in 30 monthly installments of $500.00 and secured by a chattel mortgage on Universal's equipment. This promissory note was signed by Stewart as President of Universal. Stewart, as President of Incentive, also executed an assignment of Incentive's right, title and interest to the equipment covered by the chattel mortgage referred to in the February 21st agreement to PPG. 4 On March 17, 1964, Incentive contributed $25,000 to Universal pursuant to the February 21st agreement. On or about May 13, 1964, the United States government seized all equipment and supplies of Universal for delinquent taxes. These items were released, however, when it was determined that the taxpayer corporation (Universal) had no equity in the items seized. At this time, the business of Universal ceased, and Charles Nau never recovered any of the $25,000 he invested in Universal pursuant to the February 21st agreement.

I. Interference

At Appellants' request, the trial court made special findings of fact pursuant to Indiana Rules of Procedure, Trial Rule 52(A). On appeal, Appellants challenge special finding no. 22 which provides:

'22. The assignment of the Incentive Capital Corporation chattel mortgage and the execution of the new chattel mortgage, both to Pittsburgh Plate Glass Company, amounted to an interference by the Defendants with the contract between Incentive Capital Corporation and Plaintiff.'

Appellants contend that the assignment of Incentive's chattel mortgage did not amount to interference with the February 21st agreement because the evidence is uncontradicted that Daly was to handle the financial end of Universal and Nau was to be in charge of the field operations. Appellants reason that since Daly was responsible for financial matters, there was no need to get Nau's consent to the assignment of the Incentive chattel mortgage to PPG. 5

There may be substantial questions under the facts of this case as to whether Incentive, as a party to the contract, and Daly and Stewart, as a director and officer of Incentive, could be liable for inducing a breach of the Incentive-Nau agreement, but these questions have been waived. 6 There is no contention in Appellants' motion to correct errors or argument in Appellants' brief that Appellants are not liable for interference for these reasons. Appellants have not raised in their motion to correct errors or argued in their brief that the special findings are incomplete or that they do not support the trial court's conclusions. Appellants do not raise these questions by attacking the trial court's conclusions as being contrary to law. The sole error raised by Appellants' Brief regarding the trial court's finding of interference is summarized in their Statement of the Issues:

'(1) Was the trial court correct in its finding set forth in Special Finding No. 22, that the execution of the mortgage to Pittsburgh Plate Glass was an interference by the defendants with the contract between Incentive Capital and the plaintiff.

'This finding was apparently based on the assumption that the mortgage to Pittsburgh Plate Glass was executed without the knowledge or consent of the plaintiff.

'This issue, therefore, is, was the consent of the plaintiff a necessary prerequisite to the authority of the defendants to execute this mortgage?'

This Court may not raise issues in a civil appeal sua sponte. Indiana Rules of Procedure, Trial Rule 59(G) provides:

'Issues which could be raised upon a motion to correct errors may be considered upon appeal only when included in the motion to correct errors filed with the trial court. . . .'

TR. 59(B) requires that 'claimed errors shall be specific rather than general, and shall be accompanied by a statement of the facts and grounds upon which the errors are based.' The purpose of these requirements in TR. 59 is to afford the trial court an opportunity to correct its own errors. Bud Gates, Inc. v. Jackson (1970), 147 Ind.App. 123, 258 N.E.2d 691. Limiting our review to the issue regarding special finding no. 22 as raised by Appellants may seem harsh in this case, but to find special finding no. 22 erroneous for reasons not presented to the trial court in the motion to correct errors would violate the purpose of TR. 59 and would be unfair to Nau, who has prepared his brief in light of the issues raised by Appellants. We, therefore, limit our review of special finding no. 22 to a determination of whether it is incorrect for the reason asserted by Appellants, i.e. was the trial court's finding of interference by assignment of the Incentive chattel mortgage erroneous because there was no need to get Nau's consent to the assignment.

The provision in the February 21st agreement regarding the Incentive chattel mortgage provides:

'We have further agreed to help protect you on this investment that you will not be subordinated but will be secured to our loan and that you will be further protected by our chattel on all of the equipment.'

It can not be seriously contended that the above provision is clear and concise contract writing. It is not clear under the above provision whether Incentive and Nau were to share equally in the protection afforded by the Incentive chattel mortgage or whether Nau was to take priority over Incentive to the extent of his $25,000 investment. It is also not clear how Incentive was to protect Nau's $25,000 investment--by assignment of the chattel mortgage to Nau or by...

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