Kerfoot v. Kessener, 28412.

Docket Nº28412.
Citation84 N.E.2d 190, 227 Ind. 58
Case DateFebruary 23, 1949
CourtSupreme Court of Indiana

84 N.E.2d 190

227 Ind. 58

KERFOOT et al.
v.
KESSENER et al.

No. 28412.

Supreme Court of Indiana

February 23, 1949


[84 N.E.2d 191]

[227 Ind. 63] [84 N.E.2d 192]

Appeal from Tippecanoe Superior Court; Owen Crook, Judge.

Weigle & Munger and D. Preston Calvert, all of Lafayette, for appellant D. Kerfoot.

Harry P. Schultz, of Fafayette, for appellant Odie Kerfoot.

Vaughn & Vaughn, A. Glen Armstrong, and William C. Moore, all of Lafayette, for appellees.

EMMERT, Judge.

This is an appeal from a judgment, entered upon special finding of facts and conclusion of law, quieting in appellees the fee simple title to certain real estate, hereinafter referred to as tract No. 1. The assignment of errors on appeal charges that the trial court erred in each conclusion of law on the special finding, and erred in overruling appellants' motion for new trial, which stated as cause therefor that the finding or decision of the trial court was not sustained by sufficient evidence, and was contrary to law.

On April 26, 1944, the appellant, Dorothy Kerfoot, filed a complaint to quiet title of certain real estate against the appellees, making therein the appellant, Odie Kerfoot, her husband, a defendant for the reason he refused to join in her action. The complaint was in two paragraphs, the first alleging that the appellants were the owners in fee simple as tenants by the entirety [227 Ind. 64] of tract No. 1, and the second paragraph alleged that the appellants were the owners 'by complete equitable title' of the same real estate located in Tippecanoe County, Indiana. On June 14, 1944, the appellees filed a cross-complaint in two paragraphs to quiet title to three tracts of real estate against both appellants, alleging they were the owners of the fee simple title. The issues were closed by various answers and replies, which among other things put in issue the claim of appellant Dorothy Kerfoot that a certain deed and 'option contract' constituted in fact an equitable mortgage, for her right to an accounting and recovery of over-payments [84 N.E.2d 193] under such 'option contract' executed April 11, 1941.

The appellants were husband and wife, but at the time of the institution of her action were separated, with a divorce action pending. Appellant Odie Kerfoot was in the contracting business and had been doing business with the appellees. He was in financial difficulties, and on the 11th day of April, 1941, the appellants executed a warranty deed, 'subject to all liens and encumbrances now a lien on said real estate' to the appellees for three tracts of real estate in Tippecanoe County involved in this controversy. On said date and as a part of said transaction the appellants and appellees executed the following written contract:

'This Instrument of Writing, made and entered into this 11th day of April, 1941, by and between Oddie Kerfoot and Dorothy Kerfoot, of Tippecanoe County, Indiana, Parties of the First Part; and Henry J. Kessener, Flora Kessener and Clarence R. Grogan doing business as Henry J. Kessener Lumber Company, of Tippecanoe County, Indiana, Parties of the Second Part, witnesseth:

'That whereas said Parties of the First Part, have this date, conveyed to said Parties of [227 Ind. 65] the Second Part, the following described real estate located in Tippecanoe County, Indiana, to-wit:

[Here follows description of real estate hereinafter referred to as:

Tract No. 1

Tract No. 2

Tract No. 3]

'Whereas, said Parties of the First Part are indebted to said Parties of the Second Part in the total sum of $9,710.00, a schedule of which indebtedness is attached hereto and made a part hereof as though expressly set out herein; and

'Whereas said Parties of the Second Part have agreed to liquidate and pay certain indebtedness of said Party of the First Part from funds received from loans due said Parties of the First Part, but said Parties of the Second Part is not to advance any funds of their own; and Whereas said Parties of the First Part have this date conveyed said above described real estate to said Parties of the Second Part, in full satisfaction of all of said indebtedness, and not as security for a loan of the amount of said indebtedness;

'Now, therefore, it is hereby agreed by and between said Parties of the First Part and said Parties of the Second Part that upon the repayment of said sum of $9710.00 to said Parties of the Second Part by said Parties of the First Part, at any time within one (1) year from this date, with seven percent (7%) interest thereon, then and in that event, said Parties of the Second Part will reconvey to said Parties of the First Part, said described real estate by a good and sufficient warranty deed, subject to all liens and encumbrances.

'It is further agreed, that said Parties of the Second Part will not allow the taxes on said real estate to become delinquent but will pay the same and add any such amount to the above indebtedness to draw interest as aforesaid.

'It is further agreed, that said Parties of the Second Part shall credit against said sum of [227 Ind. 66] $9710.00, taxes and interest thereon, all the income derived from the rents of said real estate with 7% interest thereon, and that at the end of said option period said Parties of the Second Part shall reconvey to said Parties of the First Part, all said real estate, provided, however, that said Parties of the First Part shall first pay in cash to said Parties of the Second Part the said balance between $9710.00, taxes, and interest, and the income from said real estate and said interest thereon.

'It is further agreed by and between the Parties hereto, that during the term of this option contract, said Parties of the First Part shall continue to purchase building material, lumber and supplies from said Henry J. Kessener Lumber Company and that all the business connected with said purchases and arising out of the renting of said real estate, shall be conducted through the office of said Lumber Company and made a matter of record in the book of said company.

'This option purchase shall expire on the 11th day of April, 1942.' [84 N.E.2d 194] On April 11, 1942, the same parties executed an endorsement on said contract extending the option period as follows:

'For and in consideration of the receipt of One Dollar and other valuable consideration, we do hereby renew said option for a period of thirty two (32) months from date; said renewal of this option shall expire on the 11th day of December, 1944.'

After the cause had been tried and taken under advisement, on September 10, 1945, the trial court made and filed its special finding of facts and conclusions of law thereon, as follows:

'Fact No. 1

'The court finds that the defendant, Oddie Kerfoot, and the plaintiff, Dorothy Kerfoot, are husband [227 Ind. 67] and wife, and that on the 11th day of April, 1941, they were the owners as tenants by entireties of the following described real estate located in Fairfield Township, Tippecanoe County, State of Indiana:

[Tract No. 3]

[Tract No. 1]

'Fact No. 2

'The court finds that on April 11, 1941 the defendant Oddie Kerfoot, was the owner of the following described real estate:

[Tract No. 2]

'Fact No. 3

'The court finds that prior to and on the 11th day of April, 1941, the defendant, Oddie Kerfoot, was engaged in the business of building contracting, and on said date was the building contractor on divers contracts which were only partially performed on his part; that on said date the defendant, Oddie Kerfoot was indebted to the Henry J. Kessener Lumber Company, the defendants and cross-complainants, in the sum of Nineteen Thousand Nine Hundred One and 58/100 ($19,901.58) for building materials and supplies.

'Fact No. 4

'The court finds that prior to and on the 11th day of April, 1941, the defendant, Oddie Kerfoot, was insolvent, that many of his creditors were demanding payment; and that prior to April 11, 1941, the defendant, Oddie Kerfoot, sought the assistance of the cross-complainants herein, in order that he might consolidate his indebtedness.

'Fact No. 5

'The court finds that on April 11, 1941, the cross-complainants, doing business as and under the firm name of Henry J. Kessener Lumber Company, agreed with the defendant, Oddie Kerfoot to furnish the materials and complete the various unfinished jobs which the said Oddie Kerfoot was [227 Ind. 68] obligated under contracts to complete, and to pay the various sub-contractors and materialmen who held claims against the said Oddie Kerfoot; and on his part the defendant, Oddie Kerfoot, agreed with the cross-complainants that they the said cross-complainants, would be entitled to receive from the owners of the divers properties who had entered into construction contracts with the said Oddie Kerfoot, the balances which would be due the said Oddie Kerfoot on said contracts when the divers and respective jobs should be completed.

'Fact No. 6

'The court finds that divers sub-contractors and materialmen filed notice of intention to hold mechanics liens against Oddie Kerfoot, defendant herein; and against Oddie Kerfoot and Dorothy Kerfoot, defendant and plaintiff herein respectively, and against the divers properties whereon the defendant, Oddie Kerfoot, was engaged under contract in the building of houses and other buildings, in the total sum of Eight Thousand Five Hundred Twenty-three and 85/100 ($8523.85), as the same appear in volume 12, page 2 to 29 both inclusive of the mechanics lien records of Tippecanoe County, Indiana; that said notices were filed prior to April 11, 1941.

'Fact No. 7

'The court finds that on the 11th day of April, 1941 the defendant, Oddie Kerfoot, and the cross-complainants, doing business as and under the firm name of Henry J. Kessener Lumber Company, estimated that the debt of Oddie Kerfoot to said cross-complainants of Nineteen Thousand Nine...

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