McKay v. Corwine

• Decision Date: 12 March 1918
• Docket Number: 9,486
• Citation: 118 N.E. 978,69 Ind.App. 238
• Parties: MCKAY v. CORWINE ET AL
• Court: Indiana Appellate Court

118 N.E. 978

69 Ind.App. 238

MCKAY v. CORWINE ET AL

No. 9,486

Court of Appeals of Indiana

March 12, 1918

Rehearing denied May 28, 1918. Transfer denied January 24 1919.

From Marion Superior Court (95,955); Theophilus J. Moll, Judge.

Action by Dessie M. Corwine against Martha N. McKay and others. From a judgment for plaintiff, the defendant named appeals.

Affirmed.

Elmer E. Stevenson, for appellant.

Charles W. Miller and Henry M. Dowling, for appellee.

OPINION

IBACH, C. J.

This action was brought by appellee, Dessie M. Corwine, against appellant on a note signed by Horace McKay and appellant, payable to plaintiff, and to foreclose a mortgage on certain real estate given to secure it. Certain other junior lienholders were made parties defendant to answer to their interests.

The complaint is in one paragraph, and is in the usual form in such actions. Appellant answered by general denial and three special paragraphs, setting up with slight variations the defense of suretyship. Other pleadings were filed, but what we have indicated is sufficient for an understanding of the questions presented.

The trial court found that appellant was a principal on the note and mortgage, decreed a foreclosure of the mortgage, and rendered personal judgment against her for the deficiency.

The controlling question is whether or not there is evidence to sustain the decision of the trial court that appellant was a principal on the note and mortgage. If her obligation was that of a surety it is admitted in effect that she is not liable.

In considering the sufficiency of the evidence, we must take the evidence most favorable to the appellee and the inferences to be drawn in appellee's favor. Southern Product Co. v. Franklin Coil Hoop Co. (1915), 183 Ind. 123, 129, 106 N.E. 872.

The undisputed facts show that for a period of about twenty-five years Horace McKay (appellant's husband), hereinafter referred to as McKay, was the trusted agent of various persons, including appellee, in handling of trust funds, making investments, collecting the principal and interest in such investments, and similar service. About the year 1907 McKay's health began to fail, and at that time he wanted to close his business with appellee, but at her solicitation continued to act as her agent until in 1909, when his health became such that he sent for appellee to come and they would close their business. Appellee, together with her attorney, came to Indianapolis, and an audit of the books was made. It was found that McKay had approximately $ 25,000 in property belonging to appellee to surrender, and it was also found that he was indebted to her in a considerable sum, approximating $ 5,500. In making the final settlement between them, McKay and appellee executed a contract, which was introduced in evidence, and provides, among other things, that "Dessie M. Corwine will take, also the following described real estate, which now stands in her name or will, at the time of this settlement, be conveyed to her," and that McKay and appellant "will execute to Dessie M. Corwine their promissory note * * * for $ 2,500 * * * secured by a mortgage" on the property in question, and provided also that when the details of said agreement had been carried out it would stand as a release of all claims of whatsoever, nature between the parties.

Appellant was present during the negotiations between McKay and appellee, through their attorneys, but she is not shown to have taken any part in the negotiations, except that on the same date the agreement was entered into she joined with her husband in the execution of the note and mortgage sued on. Appellant knew of the kind of business her husband was doing and that he was investing money of others and making his livelihood out of the commission earned thereby. Appellant had inherited a considerable amount of property from an ancestral estate, which she turned over to her husband to invest, and which he did invest, together with money from his business, in property which was taken in their joint names. At the time of making the agreement and at the time of his death in May, 1914, McKay held no property in his own name. Appellant and her husband kept a joint bank account in which all the rents from real estate and other money, with the exception of very limited personal accounts, were deposited in their joint names and checked out on their joint order.

Thomas D. Stevenson as witness for appellant testified as to certain facts disclosed by the audit of the books, in substance, as follows: McKay had been managing appellee's property for several years. His books showed that he had received money from her and that he had loaned it out to different people and sometimes collected loans and reloaned the money and in many cases sent money to her in New York. As a result of the audit of the books we found that there was a balance of property belonging to appellee in McKay's hands that should be turned over to her. "It was practically impossible to tell whether it was cash or real estate or mortgages or what it was. This transaction had covered so many years that the best we could get out of it there was a balance due from Mr. McKay to Mrs. Corwine. Q. And you fixed that part of it on a cash basis? A. We determine a cash figure as an equivalent of that balance, yes sir. Q. Now you spoke about a reduction of some of this to a cash basis. Have you an independent recollection of about how much it was found that Mr. McKay was indebted to Mrs. Corwine? A. I wouldn't rely on it. I can only fix it in this way. When Mr. McKay surrendered her property, I took it over and my recollection is I took about twenty-four or twenty-five thousand dollars worth of her property and I think that was all of the property turned over at the time of the settlement except the cash. Q. And about how much was there of cash? A. Fifteen hundred dollars it runs in my mind, but I am not sure. Q. Mr. Stevenson you said you took over some mortgages and took over some cash. Just what did you mean by taking them over? A. Well, Mr. McKay had on hand some property which it was finally agreed belonged to Mrs. Corwine and some real estate in Mrs. Corwine's name. It was that property that I took over--the real estate and the mortgage loans which were agreed upon as belonging to her. I said I took over the real estate. I really didn't take that over. I took over practically nothing but mortgage loans although the real estate was carried on my books for a while. Q. Was * * * Mrs. McKay * * * present * * *? A. My recollection is that she was, at that time. Mr. McKay's office was in the Board of Trade Building and he was in very poor health and Mrs. McKay was in the office almost constantly. Most of our conferences took place in * * * my father's office, but some of them took place in Mr. McKay's office and at this conference I am sure Mrs. McKay was present. Q. Now do you remember any other occasion * * * when Mrs. McKay was present when any matters connected with the agreement of August 25, 1909, was discussed? A. Yes I remember she and Mr. McKay and Mrs. Corwine and Mr. Paul and my father all met there in * * * my father's office before this contract was signed up one day, I think for the purpose of discussion, although I am not sure * * * she (Mrs. McKay) was there with the rest."

Appellant as a witness for appellee testified: ...