Harbaugh v. Tanner
| Decision Date | 24 May 1904 |
| Docket Number | 20,342 |
| Citation | 71 N.E. 145,163 Ind. 574 |
| Parties | Harbaugh v. Tanner |
| Court | Indiana Supreme Court |
Rehearing Denied December 6, 1904.
From Fountain Circuit Court; William Isham, Special Judge.
Action by Keziah Tanner against Washington W. Y. Harbaugh for money had and received. From a judg-for plaintiff, defendant appeals. Transferred from the Appellate Court under § 1337u Burns 1901.
Affirmed.
V. E Livengood and W. H. Cox, for appellant.
Crane & McCabe, for appellee.
Appellee brought this action against appellant for money had and received to her use. Appellant filed a general denial. The cause was tried by the court, a special finding of facts made, and conclusions of law were stated thereon in favor of appellee. Final judgment in favor of appellee. The errors assigned call in question each conclusion of law.
It appears from the special finding that appellant was a shrewd business man and money lender of much experience. Appellee's husband was an inebriate, thriftless and improvident, unable to read or write. Appellee was barely able to read and write, and both she and her husband were ignorant in business and financial matters, and were unable to make mathematical calculations of any kind, and had but little knowledge concerning the same. Appellee and her husband lived on her farm, and traded at the town where appellant resided, and were his patrons. A few days before March 1, 1895, appellee's husband applied to appellant for a loan of money for the purpose of paying his own and his wife's debts. Appellant consented to make said loan if secured by a mortgage executed by appellee and her said husband on appellee's real estate, consisting of fifty acres, upon which they resided, the same being the separate property of appellee. It was agreed that the loan should be made for a sum sufficient to cover appellee's debts and the cost of preparing the papers and an abstract of title and certain debts of appellee's husband owing to appellant, consisting of a blacksmith's bill and two notes, the latter being secured by sureties who were solvent. On March 5, 1895, a mortgage was executed to appellant by appellee and her husband on said fifty acres of real estate to secure notes amounting to $ 680, which included the interest in advance for one year at eight per cent. per annum, the same being a larger amount than necessary to cover the debts of appellee and her husband and the expense of preparing papers and an abstract of title. Neither said sum of $ 680 nor any part thereof was ever paid to appellee or her husband, but appellant paid off and discharged the taxes which were a lien on said fifty acres of land, and certain indebtedness of appellee which was a lien on said real estate, amounting in all to $ 313.38, and appellant delivered to appellee's husband as paid and satisfied the said notes, amounting to $ 224, and canceled said blacksmith's bill. He also paid $ 17 for the abstract of title to said real estate, and twenty-five cents for the acknowledgment of the execution of said mortgage. There was no other or different consideration for said notes and the mortgage securing the same than as above stated. Said notes and mortgage, becoming due in March, 1900, were renewed by the execution of notes and a new mortgage on said real estate for the sum of $ 1,150, which covered the amount of the notes secured by the mortgage executed in March, 1895, with compound interest thereon, an unsecured note of appellee, an alleged commission to appellant for said loan, interest in advance on said amount of $ 1,150 for one year, and the expense of the new mortgage. The amount and terms of said notes executed in March, 1895, and in March, 1900, and the mortgages securing the same, were fixed and determined by appellant, who made all the calculations in relation thereto. Appellee and her husband were ignorant of the amount of money required at the time the first notes and mortgage were executed, and of the amount for which said renewal notes and mortgage should be executed at the time they were executed in March, 1900, and they relied upon appellant at each of said times to make the proper calculation, and honestly and properly to fix the amount thereof, and they made no inquiry or investigation to determine the amount of their respective obligations when the first notes and mortgage were executed, nor the amount the second notes and mortgage should cover when they were executed. Appellee knew that the two notes of her husband were to be and were paid out of the money for which the $ 680 note was executed in March, 1895. Said note for $ 680 and the four interest notes executed at the same time were delivered to appellee by appellant when the renewal notes and mortgage were executed in March, 1900.
At the time of the execution of said mortgage in March, 1900, appellant, for the purpose of using the same to induce persons to buy said notes and mortgage, produced and caused appellee to sign and swear to an affidavit of even date with said mortgage, which affidavit was prepared by appellant on his own motion, and stated that said mortgage and notes were executed for money loaned to her, and contained recitals showing that the same was to be used for the benefit of her own separate estate, and for no other purpose. Appellee made and verified said affidavit without knowing or understanding its true meaning or import, and without any fraudulent or improper purpose. But appellant had full knowledge that said affidavit was false, except as otherwise shown in this statement. Afterwards, in pursuance of said fraudulent purpose, appellant sold and assigned said notes and mortgage executed in March, 1900, to one Jenners by means of said false affidavit, exhibited by appellant to him, for which said Jenners paid him the sum of $ 1,125. Thereafter, in April, 1901, said Jenners brought an action against appellee and her husband on said mortgage and notes in the Fountain Circuit Court, to which appellee appeared, and answered her coverture and suretyship, and also usury. To the affirmative paragraphs of answer said Jenners replied, setting up said affidavit and the statements therein contained, and the other facts necessary to estop her from making said defenses against him. On the issues joined in said foreclosure suit, of which appellant had notice, and in which he testified as a witness on behalf of said Jenners, the court, at the request of the parties, made a special finding and stated conclusions of law thereon. It was found and adjudged in said action that appellee in this action was surety as to all of the consideration of said mortgage debt not received by her in person or in benefit to her separate estate, specifically setting forth the amount; but it was also found and adjudged that she was estopped from asserting her said defense by reason of said affidavit. The court rendered judgment in that case for the full amount of said notes, principal and interest, with attorney's fees, and decreed the foreclosure of said mortgage and sale of the mortgaged real estate to satisfy said judgment. After said real estate was advertised to be sold under said decree, appellee paid off and satisfied said judgment, interest, and costs. Afterwards, and before the commencement of this action, appellee demanded of appellant the repayment of the amount she was compelled to pay in excess of the amount for which she was liable as principal, which he refused to pay. The court found and adjudged in this case that as to the sum of $ 596.20 of said note for $ 1,150 appellee was principal, and bound as such, but that as to the residue thereof--$ 553.80--she was merely surety for her husband and not bound thereby; that appellee is entitled to recover said sum of $ 553.80, with interest, from appellant; and rendered judgment accordingly.
Appellant insists that the facts found by the court show that appellee was principal as to all the consideration of said $ 1,150 note, and was not surety as to any part thereof. It has been uniformly held by this court that whether or not a married woman is surety or principal on a promissory note or other obligation is to be determined not from the form of the contract, nor from the basis upon which the transaction was had, but from the inquiry as to whether she received in person or in benefit to her separate estate the consideration upon which the contract depends. Guy v Liberenz (1903), 160 Ind. 524, 528, 65 N.E. 186, and cases cited; Cook v. Buhrlage (1902), 159 Ind. 162, 164, 64 N.E. 603, and cases cited; Andrysiak v. Satkoski (1902), 159 Ind. 428, 430, 63 N.E. 854, and cases cited. Under the law as declared in said cases, it is only...
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