Hinds v. McNair

• Decision Date: 12 October 1972
• Docket Number: No. 171A6,171A6
• Parties: Lawrence H. HINDS et al. v. Xen McNAIR, Jr., et al.
• Court: Indiana Appellate Court

Page 767

287 N.E.2d 767

153 Ind.App. 473

Lawrence H. HINDS et al. v. Xen McNAIR, Jr., et al.

No. 171A6.

Court of Appeals of Indiana, Third District.

Oct. 12, 1972.

John F. Beckman, Jr., Tinkham, Beckman, Kelly & Singleton, Hammond, Lawrence McTurnan, Bredell, Martin & McTurnan, Indianapolis, for appellants.

Fred M. Cuppy, Thomas, Burke, Dyerly & Cuppy, Max Cohen, Cohen & Thiros, Gary, for Norma McNair.

William S. Suarez, Gary, for Milan Uzelac.

Nesbitt & Fisher, Rensselaer, Call, Call, Borns & Theodoros, Gary, for Xen McNair, Jr.

Robert A. Lucas, James A. Holcomb, Lucas, Clifford & Wildermuth, Gary, for John Parramore.

HOFFMAN, Chief Judge.

This is an appeal from an order of the trial court overruling appellant's motion to intervene. Three issues must be resolved by this court. The first issue is whether the appellant's motion to correct errors was timely filed. The second issue is whether the parties to this appeal are bound by a prior opinion of the Supreme Court of Indiana. The third issue is whether the motion to intervene filed by appellant was properly overruled by the trial court.

This appeal culminates approximately twenty years of litigation. Therefore, the following factual background is here pertinent:

In Hinds, Executor, Etc. v. McNair, et al. (1955), 235 Ind. 34, 129 N.E.2d 553, the plaintiff Lawrence H. Hinds was the Executor and Trustee of a judgment creditor of defendant Xen McNair, Sr. Hinds filed his complaint in four paragraphs in proceedings supplemental to execution alleging, in substance, (1) that McNair owned 1496 shares of common stock and 1500 shares of preferred stock of the Gary Real Estate Exchange, Inc.; (2) that McNair owned a farm and an apartment building, title of which he carried in the corporation's name; (3) that the Gary Real Estate Exchange, Inc. is McNair's alter ego; and (4) that McNair in reality owns the shares of stock abovementioned but falsely claims that he holds such stock as Trustee. Trial was to a jury, and the verdict and judgment were in favor of McNair. On appeal our Supreme Court held that as to paragraphs two and three of the complaint there was sufficient evidence to support the verdict of the jury. As to paragraphs one and four of the complaint the evidence, as set forth in the opinion of our Supreme Court, was such that one of two alternatives must have existed. Either Xen McNair, Sr. held the stock in trust or he was the sole owner of the stock individually. In affirming the verdict of the jury, our Supreme Court disregarded the jury's answer to certain interrogatories propounded to it and, at 53 of 235 Ind., at 564 of 129 N.E.2d, held:

'Looking at the evidence most favorable to the appellee, McNair, in view of the verdict in his favor, there are here all the elements necessary to create a trust, with the legal title in McNair and the beneficial interest in the children of McNair and wife. The appellants alleged and raised the issue of fraudulent concealment of assets of McNair by a fictitious trust in this case. The jury found in the negative and against appellants on all issues including that of fraudulent concealment, even if we assume he originally owned the stock which became the trust res. Therefore, the attack on the alleged trust fails and it stands unimpeached.'

In 1963, the proceedings from which the instant appeal arose were initiated by Xen McNair, Jr. against Xen McNair, Sr. and others, for the purpose of removing Xen McNair, Sr. as Trustee of the trust. Thereafter, Norma McNair was substituted individually and as Executrix of the Estate of Xen McNair, Sr. Defendant Norma McNair, along with the other defendants, answered the amended complaints filed by plaintiff denying, inter alia, the existence of a trust.

Defendant Norma McNair filed a motion for summary judgment based on the nonexistence of any issue of material fact as to the existence of a trust. In overruling the motion for summary judgment the trial court entered the following finding on June 29, 1970:

'The jury verdict and the Indiana Supreme Court decision in Hinds v. McNair (1955), 235 Indiana 34, 129 N.E.2d 553 establishes the fact for all eternity that on the day the case was tried, Xen McNair did not own any interest in the shares of stock of the Gary Real Estate Exchange, Inc.

'This trial Court finds that as a result of the above case, it is res judicata that a trust of all the shares of the Gary Real Estate Exchange existed on the date of trial.'

Prior to the overruling of the motion for summary judgment Hinds, appellant herein, obtained a renewal of his judgment and filed a petition to intervene and requested a hearing thereon. The petition to intervene contained, inter alia, the following allegations:

'6. This intervenor and affiant claims an interest relating to the property which is the subject of the action in this court, and he is so situated that the disposition of the action may, as a practical matter, impair or impede his ability to protect his interest in the property, fund or transaction, unless his interest is adequately represented by existing parties.

'7. Since it appears that Norma McNair is sued individually as well as in her representative capacity as Executrix of the estate of Xen McNair, Sr., and it further appearing that she is presently involved in litigation in Benton County, Indiana, respecting an assignment of an interest in a trust which is claimed in this case, and since it further appears that negotiations have been carried on between Norma McNair and the plaintiff in this case, in an effort to settle their differences, a conflict may arise in the future by virtue of which Norma McNair, as Executrix would be in a position of conflict of interest with respect to defending against the claims of the plaintiff, to the detriment of this petitioner.

'8. The granting of this petition to intervene will enable petitioner to protect his own interests and may well eliminate the necessity of future litigation.'

The trial court denied the request of the petitioner for a hearing on the petition to intervene and entered a nunc pro tunc order as of June 29, 1970, overruling the petition to intervene.

During a pre-trial conference the parties stipulated to 'the order of trial necessitating evidence:

'ISSUE NO. 1: Whether or not the trust still exists.

'ISSUE NO. 2: Whether or not a valid assignment of a portion of the trust assets exists between Xen McNair, Jr. and Norma McNair.

'ISSUE NO. 3: Being the Previously Stated above No. 5 which is held in abeyance.' ¹

(Correction as appears in original.)

On July 7, 1970, trial was conducted to the court. In entering its judgment the trial court made the following findings which are here pertinent:

'The Court now finds that there has been no revocation, repudiation, modification or recision (rescission) of the trust the Court found to have been judicially established by the holding in Hinds v. McNair ((1955), 235 Ind. 34, 129 N.E.2d 553), and now finds for the plaintiff, Xen McNair, Jr. and against the defendant, Norma McNair, individually and as executrix of the Estate of Xen McNair, Sr. on Issue Number 1.

'The Court now finds that the remaining issues in this cause have been settled and compromised by the parties with the exception of Norma McNair in her capacity as Executrix, and said Settlement and Compromise Agreement is now submitted to the Court and approved. And the Court now finds that pursuant to said Settlement and Compromise Agreement, the beneficial interest in the trust referred to hereinabove is owned by the parties as follows:

Xen McNair, Jr., 42 1/2%

John M. Parramore as Guardian for Virginia Reed Parramore, a minor 25%

Norma McNair, Individually 25%

Milan Uzelac 7 1/2%

'The Court further finds that Norma McNair in her capacity as executrix has no interest in said trust.

'The Court now finds that Esther McNair, having died on January 7, 1968, and Xen McNair, Sr., having died on May 6, 1969, the trust is now ended and that pursuant to the terms of said trust as set out in the case of Hinds v. McNair, supra, the corpus of said trust should now be distributed to the beneficiaries thereof as set forth in these findings hereinabove.'

On September 4, 1970, Hinds, the attempted intervenor, filed his motion to correct errors which was overruled by the trial court and Hinds has brought this appeal.

On appeal, the first issue is whether the motion to correct errors was timely filed.

Prior to the adoption of the present rules of Civil Procedure, the law was well established that the denial of a motion to intervene was an appealable order. Weldon v. State (1972), Ind., 279 N.E.2d 554.

In the instant case, however, TR. 24(C), Indiana Rules of Procedure, IC 1971, 34-- 5--1--1, is controlling and, in pertinent part, reads:

'The court's determination upon a motion to intervene may be challenged only by appeal from the final judgment or order in the cause.'

While this specific language has not heretofore been judicially interpreted, it is patently clear. Furthermore, the comments of the Civil Code Study Commission as found in 2 Ind.Prac.--Rules of Civ.Proc., Harvey, at 396, read, in pertinent part, as follows:

'Under prior law the intervener who was denied relief was allowed to appeal directly from the order. State ex rel. Zilky v. Lake Superior Ct., 242 Ind. 128, 175 N.E.2d 9 (1961); Davidson v. Grosskopf, 128 Ind.App. 612, 150 N.E.2d 685 (1958). However, this subdivision denies the right of appeal from the order of intervention, and permits the appeal to be taken only from the judgment in the principal action.'

Although the prior rule of law is arguably more rational, we, as a court of review, cannot ignore or change the clear command of the Legislature expressed in TR. 24(C), supra. The appellant herein filed his motion to correct errors in the trial court within sixty days after judgment was entered in the cause, and under the above quoted language of TR. 24(C), supra, the motion to...