Lutz v. Frick Co.

• Decision Date: 03 March 1961
• Docket Number: No. 1,No. 19427,19427,1
• Citation: 172 N.E.2d 878
• Parties: Jacob LUTZ, Appellant, v. FRICK COMPANY, a Pennsylvania Corporation, Appellee. *
• Court: Indiana Appellate Court

Page 878

172 N.E.2d 878

Jacob LUTZ, Appellant, v.FRICK COMPANY, a Pennsylvania Corporation, Appellee.^*

No. 19427.

Appellate Court of Indiana, Division No. 1.

March 3, 1961.

Rehearing Denied April 18, 1961.

Dann & Backer, Indianapolis, Evans & Baker, Bloomington, for appellant.

Regester & Regester, Bloomington, Brunner, Brown & Brunner, Shelbyville, for appellee.

COOPER, Judge.

This is an appeal from the Monroe Circuit Court from a judgment against appellant, Jacob Lutz, on three promissory notes executed by defendant below, appellant herein, as guarantor for Shelby Blue River Farms, Inc.

The appellee's complaint averred, in substance, that Shelby Blue River Farms, Inc., gave three promissory notes to appellee; that appellant, Jacob Lutz, guaranteed said notes of J. E. Glaser, the guarantee on the back of said notes reads as follows:

'For Value Received, I hereby guarantee payment of within note and all extensions of same at maturity, thereof and at any time thereafter, and waive demand, protest, notice of protest and non-payment and suit against the maker; consent that same may be extended from time to time, and at higher rate of interest, wihout affecting my liability, thereon; and I hereby waive diligence on the part of any holder hereof in collecting the said note, and any defense arising out of lack of diligence in enforcing the collection thereof.

'If this note, together with others, is secured by mortgage, it is agreed, that in case of foreclosure or return of the property mortgaged, the proceeds realized from said foreclosure or from resale of property returned, shall first be applied for the expenses of foreclosure, second upon the notes unendorsed or not guaranteed, and the balance on guaranteed notes.'

Also, there remained unpaid, due and owing the sum of $1,960.12 on said notes, with interest and attorney fees.

The record reveals the appellant filed a motion with the trial court under Rule 1-3A of the Supreme Court, praying that the appellee be required to set forth as a part of the complaint, the agreement by which the appellee compromised and settled in full its claim against the bankrupt.The trial court overruled this motion.

Defendant's answer to plaintiff's complaint in the trial court was in eight paragraphs, the first seven being an admission, denial and allegation that defendant was without knowledge of allegations contained in plaintiff's complaint.Paragraph eight reads as follows:

'That the Plaintiff compromised his claim against the bankrupt, Shelby Blue River Farms, Inc., by 'compromise and settlement in full' with the Trustee of said bankrupt in lieu of proceedings with such remedies as the Bankruptcy Act provides for secured creditors, and further that he compromised in full his rights rather than proceed with such remedies as the Bankruptcy Act provides for secured creditors in the event the sale of said property covered by mortgages does not return in sale the amount of the indebtedness.'

The cause was submitted to the court without jury, and the court found for the appellee and entered the following judgment:

'The Court being duly advised, after having said cause under advisement, now finds for the plaintiff on its amended complaint and that plaintiff is entitled to recover of and from the defendant the sum of $1949.80 principal, $545.93 interest and $250.00 attorney fees, making a total of $2745.73 together with the costs of this action.

'It is therefore ordered, adjudged and decreed by the Court that the plaintiff recover of and from the defendant the sum of $1949.80, principal $545.93 interest and $250.00 attorney fees, making a total of $2745.73, together with the costs of this action.Judgment without relief from valuation and appraisement laws.'

Within the time allowed, the appellant filed motion for new trial, and later filed the following amended motion for new trial:

'Comes now the Defendant and files amended motion for new trial, which is in the words and figures following, to-wit:

'The Defendant, Jacob Lutz, in the above entitled cause, moves the Court for a new trial on each of the following grounds:

'1.The decision of the Court is now sustained by sufficient evidence.

'2.The decision of the Court is contrary to law.

'3.That the defendant has since the trial of this cause discovered new and competent evidence material to his defense concerning surprise testimony of the Plaintiff which ordinary prudence could not have foreseen and guarded against.That considering the circumstances the Defendant would not, with reasonable diligence, have discovered and produced such evidence at the trial; that this evidence can now be produced if a new trial of this cause is had.

'That the nature of this surprise testimony is as follows: Plaintiff and prevailing party testified at the time that the Defendant received notice of the proposed compromise.That this was shown known by the Plaintiff by reason of his examination of the records of the subject bankruptcy cause.That the Defendant can now show that such notice was not in fact given and that said record would have shown that in fact a creditor's committee was appointed under the provisions of Section 58,Title 11,Chapter 6--Section 94 USC.'

Motion was overruled by the trial court.

The error assigned before us is the overruling of the appellant's motion for new trial.

We find no merit to the appellant's first specification of motion for new trial that 'Decision of the court is not sustained by sufficient evidence' for the following reasons: A review of the record reveals that the parties stipulated the execution and enforcement of the notes and mortgage herein-involved, including the sale of the mortgaged property and credit from the proceeds of such sale applied upon the notes.There is ample evidence in the record making a prima facie case on behalf of the appellee herein.

As we have heretofore pointed out, the appellant herein filed an affirmative defense and, of course, it is the general rule of law that the defendant has the burden of establishing affirmative allegations of his answer.See12 I.L.E.Evidence§ 28, p. 458, and authorities cited therein.Furthermore, both the Supreme Court and our court have held in many cases that where there is a negative judgment, the party having the burden of proof cannot successfully question the sufficiency of the evidence.The rule under such circumstances is well stated in the case of Leckrone v. Lawler, 1954, (T.D.)125 Ind.App. 35, 37, 118 N.E.2d 381, 382, wherein we held:

'As the finding was negative to appellants who had the burden of proof, they cannot challenge the insufficiency of the evidence to sustain the finding, Myers v. Brane, 1944, 115 Ind.App. 144, 57 N.E.2d 594;Wilson v. Rollings et al., 1938, 214 Ind. 155, 158, 14 N.E.2d 905.'See, also, Hinds v. McNair, et al., 1955, 235 Ind. 34, 40, 41, 129 N.E.2d 553.

This brings us to the appellant's second assignment in his amended motion for new trial that 'The decision of the court is contrary to law'

The Supreme Court and our court have said many times it is only where the evidence is without conflict and leads to but one conclusion that the decision of the trial court will be set aside on the ground that it is contrary to law.SeeRowe v. Johnson, 1945, 223 Ind. 289, 60 N.E.2d 529;Losche & Sons v. Chas. Williams & Associates, 1948, 118 Ind.App. 392, 78 N.E.2d 447;Pokraka v. Lummus Co., 1952, 230 Ind. 523, 532, 104 N.E.2d 669;Hines v. McNair et al., supra.

It is the appellant's contention that the appellee compromised and settled its claim in full and that the petition 'to compromise, hearing thereon and order were consummated without the consent of the appellant or the other surety or guarantor,' and this compromise or composition discharged the appellant as guarantor.

We find in 8 C.J.S.Bankruptcy§ 666, p. 1710, this statement of law:

'A composition does not discharge cobligors, guarantors, or sureties of the bankrupt from their obligations.'

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