Huffman v. Foreman

• Decision Date: 24 February 1975
• Docket Number: No. 1--1073A175,1--1073A175
• Parties: John HUFFMAN and Myrtle Huffman, husband and wife, Appellants (Defendants below), v. Benjamin FOREMAN and Evelyn Foreman, husband and wife, Appellees (Plaintiffs below).
• Court: Indiana Appellate Court

Page 651

323 N.E.2d 651

163 Ind.App. 263

John HUFFMAN and Myrtle Huffman, husband and wife, Appellants (Defendants below), v. Benjamin FOREMAN and Evelyn Foreman, husband and wife,

Appellees (Plaintiffs below).

No. 1--1073A175.

Court of Appeals of Indiana, First District.

Feb. 24, 1975.

Stephen A. Free, Ging, Free & Brand, Greenfield, James S. Foster, Earnest, Foster & Eder, Rushville, for appellants.

Clarkson & Worth, Rushville, Lineback & Lewis, Greenfield, Brunner, Brown & Brunner, Shelbyville, for appellees.

LYBROOK, Judge.

Defendants-appellants John Huffman and Myrtle Huffman (husband and wife), appeal from a judgment in favor of plaintiffs-appellees Benjamin and Evelyn Foreman (husband and wife) on their complaint for breach of contract. Appellants present the following issues for review:

(1) Whether various findings of fact made by the trial judge were contrary to the evidence and contrary to law.

(2) Whether the trial court erred in making special findings on issues not pleaded.

The testimony at trial, which was largely uncontradicted, reveals that the conflict between appellants and appellees concerns the nature of their respective interests in a parcel of improved real estate located in Hancock County near Greenfield, which prior to July 28, 1970, was owned in fee by Richard Spencer and Caroline Spencer, husband and wife. On that day, Mr. Foreman, as agent for one Evelyn Wittenbeck, agreed to purchase the real estate from the Spencers for the sum of $40,000 to be paid as follows: $10,000 cash down payment, $200 per month beginning September 1, 1970, with the balance of the purchase price plus interest due on or before September 1, 1971. A typical conditional sales contract evidencing this agreement was signed by Foreman and Mr. Spencer on July 28, 1970, and Wittenbeck took possession in September of 1970. Thereafter, in October, 1970, Foreman and Wittenbeck were married and cohabited on the real estate in question.

Although the above conditional sales contract was never recorded, the parties thereto complied with its terms and conditions until the summer of 1971 when Spencer undertook to repurchase the land. He contacted Mr. Foreman during the early part of that summer and announced that he regretted having sold the property and wished to negotiate a repurchase.

An accord was reached whereby Spencer agreed to pay the Foremans $13,500 consisting of a $5,000 cash down payment and a $8,500 one year note which was to be secured by second mortgages on other property held by Spencer. It was further agreed that the Foremans would pay Spencer $200 rent per month from the date of the repurchase to the time the Spencers took possession.

To impart a degree of formality to this repurchase agreement, Mr. Foreman, on August 5, 1971, signed a document denominated 'Assignment of Interest' which read:

'ASSIGNMENT OF INTEREST

For the sum of $12964.07, I, Benj. Foreman, Agent for Evelyn Wittenbeck, hereby transfer and assign to Richard D. Spencer and Caroline Spencer, husband and wife of Hancock County Indiana all of our rights, title, and interest to contract of sale of real estate dated July 28, 1970: said real estate described as #10 Bowman Court, Greenfield Ind. consisting of Lots #66, #110, #107 Bowman Acres, Hancock County, Indiana. I also state that I am the sole owner of the entirity (sic) of the buyers rights, title, and interest to said contract of sale of real estate. Posession (sic) to said real estate to be given to Richard D. Spencer and Caroline Spencer, husband and wife before December 1, 1971.

Dated August 5, 1971.

s/ Benj. Foreman,

Benj. Foreman, Agent for

Evelyn Wittenbeck'

The record reveals that the difference between the $12,964.07 consideration designated in the assignment and the $13,500 price originally agreed upon is attributable to certain financial obligations which were satisfied by Spencer during the period from the making of the repurchase agreement to the subscription of the above instrument.

Subsequent to the execution of the assignment, the Foremans remained in possession of the real estate and tendered monthly rental payments to Spencer through October, 1971. These rental payments were made despite Spencers' failure to either tender the $5,000 down payment or execute the note and accompanying mortgages.

Shortly before October 7, 1971, Spencer contacted appellant Myrtle Huffman and announced that he was experiencing financial difficulties and needed assistance. He informed Huffman that two lending institutions which held mortgages on several parcels of property he owned were threatening foreclosure due to his inability to satisfy loan obligations. He requested Huffman to take title to those properties in order to avoid the impending foreclosures provided however, that when Spencer became financially able, the properties would be deeded back to him with only costs to Huffman. Included among the mortgaged parcels was the property which Spencer had repurchased from the Foremans.

Huffman agreed to Spencer's request and made arrangements to obtain a loan of $119,000 from Henry County Savings and Loan and a loan of $39,000 from Hancock County Bank. Both loans were to be secured by mortgages on the properties, and the proceeds were to be used to satisfy the outstanding indebtedness of Spencer on the properties. On October 7, 1971, the date set for closing, Spencer and Huffman met at the Henry County Savings and Loan Co. with the institution's president, Mr. Jordan. At that meeting Spencer presented Huffman a copy of the conditional sales contract between Spencer and the Foremans and announced that the Foremans wanted $10,000 for their equity in the property. In the ensuing discussion, Jordan agreed to Huffman's request for an additional $10,000 on the previously negotiated loan bringing the total amount of the loan from the Henry County Savings and Loan to $129,000. It should be noted that this additional $10,000 was appropriated without a complete inquiry by either Huffman or Jordan as to the exact nature of the Foremans' interest in the real estate. They neither saw nor inquired about the August 5, 1971, assignment by Foreman. However, they were informed that the Foremans were presently occupying the land as tenants and were paying Spencer $200 rent each month. Nevertheless, the Spencer/Huffman transaction was closed and Spencer tendered a deed to various parcels of real estate including that which was being occupied by the Foremans.

Thereafter, on October 28, 1971, Spencer contacted Mr. Foreman and, without notifying him of the transaction with Huffman, declared that he (Spencer) was attempting to refinance the property which was occupied by the Foremans, but needed cash to pay back taxes before the loan company would agree. Thereupon, Foreman paid Spencer $793.25 in cash for the taxes due and November's rent. However, it should be noted that Huffman had previously paid the real estate taxes on the parcel involved.

During the week following his October 28, 1971, meeting with Spencer, Foreman learned for the first time of the transaction between Spencer and Huffman. He received a letter dated November 1, 1971. from Huffman which informed him that she had taken title to the real estate which they occupied as tenants. The letter requested Foreman to meet with Huffman in order to 'work out a satisfactory arrangement.'

Although several meetings between Huffman and Foreman followed, no satisfactory agreement concerning the real estate was reached. At no time did Huffman offer Foreman the $10,000 additional mortgage money she received from the Henry County Savings and Loan Co. However, since Foreman steadfastly insisted on payment of the $12,964.07 due from Spencer, Huffman offered to pay the $5,000 down payment leaving Spencer responsible for tendering a note for the balance. Nevertheless, since Spencer was not a party to that agreement it never materialized. Finally, in an effort to resolve the dispute, Foreman offered to once again purchase the property for $40,000. Huffman agreed and further agreed to give the Foremans credit for the $5,000 indebtedness of Spencer that she had agreed to satisfy, thereby making the net purchase price $35,000. This accord was reduced to writing but never signed.

Before this oral contract could be executed, Mr. Foreman became severely ill and was hospitalized from December, 1971, until February, 1972. Upon his release from the hospital, Foreman presented himself at Huffman's office and offered to pay the $35,000 purchase price. Huffman refused and declared that the price had gone up to $46,000.

Thereafter, in May, 1972, the Foremans initiated this action by filing a complaint for breach of the oral contract against the Huffmans in the Hancock Circuit Court. After various other pleadings and motions, trial was held before the Rush Circuit Court. At the request of appellants, the trial court made special findings of fact and conclusions of law:

'The Court finds specially that:

1. On the 28th day of July 1970, a contract was executed under the terms of which Richard D. Spencer and Carolyn Spencer, husband and wife, (Sellers) agreed to convey to Benjamin Foreman, agent for Evelyn Wittenbeck nee Foreman (Purchasers) certain real estate in Hancock County, Indiana, described as:

Lots #66, 110 and 107 in Bowman Acres, Hancock County, Indiana.

2. That Purchasers paid the sum of Ten Thousand ($10,000.00) Dollars to Sellers as a part of the purchase price of said contract and made further payments of Two Hundred ($200.00) Dollars per month until the 5th day of August 1971.

3. That on the 5th day of August 1971, Purchasers executed an assignment of interest in and to said contract to Sellers in consideration of an agreement that Sellers would pay to Purchasers the sum of Twelve Thousand Nine Hundred Sixty Four Dollars and seven cents ($12.964.07).

4. That the consideration for said assignment of interest was not paid and therefore failed.

5....