Indianapolis Morris Plan Corp. v. McAtee

Decision Date25 March 1955
Docket NumberNo. 18572,18572
Citation125 N.E.2d 261,125 Ind.App. 372
CourtIndiana Appellate Court

Nathan Nisenbaum, Indianapolis, James D. Acher, Franklin, for appellant.

Rochford & Rochford, Indianapolis, for appellee.


The appellant sued the appellee on a promissory note and the appellee answered in three paragraphs: the first of which is an unverified denial under Rule 1-3; the second pleads no consideration; and the third alleges payment. These issues were submitted to a jury for decision and its verdict was for the appellee and the judgment of the court is that the appellant take nothing on its complaint. We are asked to reverse upon these propositions: (1) The verdict is contrary to law; (2) the court erred in the admission of certain testimony over the appellant's objections; (3) the court erred in overruling the appellant's motion for a directed verdict made at the conclusion of all the evidence; and (4) error in refusing to give certain instructions to the jury. We do not reach propositions 2, 3 and 4 because we are convinced that the verdict of the jury is contrary to law.

As background for this conclusion a review of the pertinent evidence becomes necessary. In October of 1946, the appellee purchased a new truck for use in his business. In order to raise the money to pay for it he borrowed the sum of $2,250.22 from the appellant to which was added interest in advance and he executed his promissory note for the full amount payable in 17 monthly installments of $140 beginning December 7, 1946, and an 18th installment of $93.02 due June 7, 1948. To secure the payment of this note the appellant took a chattel mortgage on the truck involved duly executed by the appellee. After having paid the first installment on said truck the appellee and one Charles E. Stein entered into an agreement whereby Stein was to pay the appellee the sum of $3,500 for his business, inventories and equipment, including said truck, and assume appellee's debt to the appellant as evidenced by said note. This was agreeable to the appellee provided the appellant would release him from all liability by reason of said note and accept Stein as the debtor in his stead. To ascertain the appellant's attitude in this respect the appellee and Stein called at the appellant's office in Indianapolis and were informed, by proper officers of the corporation, that Stein would be acceptable as a substitute debtor for the appellee and that all the appellee would have to do, as he expressed it, 'was to sign some papers that would clear up any sale to Mr. Stein's company and a release that would permit the Morris Plan to transfer that from McAtee to the Fi-Blak' (Stein's corporation). Certain papers were prepared and the appellee signed them and he was told by the appellant that he could leave and that it would 'finish the transaction with Stein at a later date.' These papers were not introduced in evidence but we think it reasonable to infer that the word 'that,' which we have emphasized above, refers to the note in suit. Although Stein met the payments on the note due in January and February of 1947, there is no evidence in the record that he ever 'finished the transaction' with the appellant in such manner as to obligate himself to pay either the appellee's debt or a substituted debt of his own. In fact the undisputed evidence is quite the contrary. Stein testified that he did not sign any note obligating either him or his corporation to the appellant in connection with this transaction nor did he otherwise agree to assume and pay the appellee's debt to the...

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4 cases
  • Boswell v. Lyon
    • United States
    • Indiana Appellate Court
    • March 24, 1980
    ...a contract with Martha S. Hadley on September 9, 1960, for the conditional sale of an apartment building located at 2208 Park Avenue in Indianapolis (the 1960 contract). The contract was a standard form contract prepared by the Indianapolis Bar Association. Purchase price was $30,000, to be......
  • White Truck Sales of Indianapolis, Inc. v. Shelby Nat. Bank of Shelbyville
    • United States
    • Indiana Appellate Court
    • May 20, 1981
    ...4. The new contract must extinguish the old one; Pope v. Vajan (1889), 121 Ind. 317, 318, 22 N.E.2d 308. Indianapolis Morris Plan v. McAtee (1955), 125 Ind.App. 372, 125 N.E.2d 261, 263. White may argue novation but to no avail. White claims the second promissory note constitutes the novati......
  • Downing v. Dial
    • United States
    • Indiana Appellate Court
    • September 22, 1981
    ...the old contract must be extinguished by the new contract; and the new contract must be valid. Indianapolis Morris Plan Corporation v. McAtee (1955), 125 Ind.App. 372, 125 N.E.2d 261. Whether a novation has occurred is a matter of the intent of the parties. 58 Am.Jur.2d Novation § 20.... Ho......
  • Flexcel, Inc. v. Cos 404, Inc., 3:06-CV-39-WGH-RLY.
    • United States
    • U.S. District Court — Southern District of Indiana
    • September 15, 2006
    ...are the types of ordinary promissory notes that Indiana courts have concluded are not contracts. See Indianapolis Morris Plan Corp. v. McAtee, 125 Ind.App. 372, 125 N.E.2d 261, 263 (1955); Crist v. Jacoby, 10 Ind.App. 688, 38 N.E. 543, 544 (1894)(holding that "[t]he note is not the contract......

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