Davis v. Duncan

• Decision Date: 02 April 1936
• Docket Number: No. 15173.,15173.
• Parties: DAVIS v. DUNCAN et al.
• Court: Indiana Appellate Court

102 Ind.App. 42

200 N.E. 727

DAVIS

v.DUNCAN et al.

No. 15173.

Appellate Court of Indiana, in Banc.

April 2, 1936.

Appeal from Howard Circuit Court; Joseph Cripe, Judge.

Action by the Citizens National Corporation, as trustee, against John H. Duncan and wife and another, wherein named defendants filed a plea of set-off and Harry O. Davis was appointed as successor trustee and was substituted as plaintiff. From an adverse judgment and an order refusing a new trial, plaintiff appeals.

Reversed, with instructions.

Elliott & Fell, of Kokomo, for appellant.

Marshall, Hillis & Coffel, of Kokomo, for appellees.

DUDINE, Judge.

This action was instituted by Citizens National Corporation, as trustee, against appellees John H. Duncan and Hazel D. Duncan (his wife), to recover on a note, and to foreclose a mortgage given by said appellees to secure said note. Appellee Floyd E. Kelly was made a party defendant because of a judgment lien held by him against his coappellees, which lien was held to be inferior to appellant's mortgage lien. During the pendency of the action appellant was appointed by the Howard circuit court as successor trustee and plaintiff in this case in lieu of Citizens National Corporation. (Hereafter, by use of the word “appellees” we will refer to appellees John H. Duncan and Hazel D. Duncan, and not appellee Floyd E. Kelly.)

The complaint was in the usual form of complaint to recover on a note and foreclose a mortgage given to secure the payment of a note.

Appellees Duncan and Duncan filed six paragraphs of answer, including a general denial. It is not necessary that we discuss said paragraphs of answer except to say that by their sixth paragraph of answer appellees sought to have the amount due them from Citizens National Bank (of Kokomo), on a certificate of deposit issued by the bank to appellee Hazel D. Duncan set off against any amount found due from appellees on said note and mortgage. The issues were closed with replies, and the cause was submitted to the court for trial without the intervention of a jury.

The court found for appellant on his complaint and for appellees on their sixth paragraph of answer, and allowed a set-off as prayed by appellees. Appellant filed a “motion to modify the judgment” by striking out that part of the judgment which allowed the set-off.

The motion was overruled. Appellant also filed a motion for new trial, which was overruled, whereupon this appeal was perfected.

The errors assigned upon appeal and discussed in appellant's brief are: (1) Error in overruling said motion to modify the judgment; (2) error in overruling said motion for new trial. The causes for new trial set forth in the motion therefor are: (1) The decision of the court is not sustained by sufficient evidence; (2) the decision of the court is contrary to law.

[1] We will first consider the alleged error in overruling the motion for new trial.

The evidence indisputably shows that on February 24, 1919, appellee John H. Duncan executed and delivered to Kokomo Trust Company his promissory note in the principal sum of $2,500, which matured February 24, 1924. He and appellee Hazel D. Duncan, his wife, executed and delivered to the trust company a mortgage on certain real estate, to secure the payment of said note. The mortgage contained an unconditional promise to pay the indebtedness secured thereby. The note was renewed, and the renewal note matured on February 24, 1929. On that date the Citizens National Bank of Kokomo held the note and mortgage; and on that date said bank was indebted to appellee Hazel D. Duncan in the principal sum of $2,000, which indebtedness was evidenced by a certificate of deposit issued by the bank in her name. The loan was again renewed at maturity, with said certificate of deposit pledged as additional collateral to secure the payment of said loan. This pledge was evidenced by a receipt which was issued by the bank, and accepted by Duncan, and which was in the following words and figures:

“Received of John H. Duncan certificate of deposit for $2,000 which represents a deposit of $2,000 in the Citizens National Bank made in the name of Hazel D. Duncan payable to the Citizens National Bank.”

“It is understood and agreed that this certificate is deposited as additional security on a mortgage loan of $2,500 and is not to be applied in reduction of the principal of said loan without the consent of...