Merchants Nat. Bank & Trust Co. v. Winston

• Decision Date: 17 June 1959
• Docket Number: No. 18989,18989
• Citation: 159 N.E.2d 296,129 Ind.App. 588
• Parties: MERCHANTS NATIONAL BANK & TRUST COMPANY, Executor under the Last Will and Testament of Frederick T. Holliday, Deceased, Appellant, v. Ben A. WINSTON and Martin Weinstein, also known as Martin Winston, Appellees.
• Court: Indiana Appellate Court

Page 296

159 N.E.2d 296

129 Ind.App. 588

MERCHANTS NATIONAL BANK & TRUST COMPANY, Executor under the Last Will and Testament of Frederick T. Holliday Deceased, Appellant, v. Ben A. WINSTON and Martin Weinstein, also known as Martin Winston, Appellees.

No. 18989.

Appellate Court of Indiana, In Banc.

June 17, 1959.

Frederick, J. Capp, Indianapolis, Ging & Free, Greenfield, for appellant.

Dann & Backer, Herbert J. Backer and Philip D. Pecar, Indianapolis, Davis & Williams, George B. Davis, Greenfield, for appellees.

MYERS, Presiding Justice.

This is an action on a promissory note brought by Frederick T. Holliday as assignee of the note to recover from appellees Ben A. Winston and Martin Weinstein as co-makers and endorsers the unpaid principal balance of $9,610, interest in the amount of $12,557.07, and attorney's fees in the amount of $5,000, or a total of $27,167.07.

The complaint alleges in substance that on or about April 20, 1939, Hydraulic Steel Corporation, an Indiana corporation (hereinafter called the corporation), and appellees Ben A. Winston and Martin Weinstein jointly and severally signed, executed and delivered to The Indiana Trust Company of Indianapolis, Indiana (hereinafter called the bank), a promissory note in the amount of $11,000, payable thirty days after date at the bank, without relief from valuation or appraisement laws. Each of said appellees endorsed the note individually. The evidence established that Ben A. Winston was president of the corporation and Martin Weinstein was treasurer.

There was issued and outstanding 100 shares of the capital stock of the corporation. Winston held 50 shares, Weinstein held 10, and the bank as trustee for Fred Holliday held 40. The shares of Winston and Weinstein were pledged, and a chattel mortgage on certain assets of the corporation was executed, to secure the payment of the note. A written guaranty was executed by Holliday and delivered to the bank, wherein Holliday guaranteed payment of any and all notes issued by the corporation to the bank, not to exceed $12,500. The note on which this complaint is based was the only note issued.

The corporation made payments to the bank totaling $1,390 of principal, reducing the note to a balance due of $9,610. The corporation and appellees individually as makers and endorsers defaulted and Holliday as guarantor paid the bank the remaining balance of $9,610 plus interest. Upon payment, the bank assigned the note to Holliday.

As assignee and holder of the note, Holliday brought this action to recover the unpaid balance plus interest and attorney's fees, the total of which was claimed to be $27,167.07. Holliday died while tha action was pending and appellant the Merchants National Bank & Trust Company, as executor under his last will and testament, was substituted as plaintiff.

Appellees' answer consisted of seven paragraphs, being in substance a general denial, payment and satisfaction, set-off, conversion of the collateral security, nonpayment of intangible taxes, that appellant's decedent was not a purchaser in good faith and the note was assigned after maturity and, finally, that he was not a guarantor for the reason that his signature did not appear on the note.

Appellant's reply to the answer denied the note had been paid, and alleged that the balance due together with interest at 8 per cent. per annum and attorney's fees were owing; alleged that the value of the collateral security stated in the promissory note was a false and fraudulent representation of appellees and that the collateral was actually worth far less than the amount owing on the note; that Holliday had authority to sell the collateral, but was not required to do so and might at his option retain it; that the intangible taxes had been paid in full; that appellant's decedent was the guarantor of the note and had paid $9,610 thereon and was the holder of the note and entitled to recover thereon.

Appellees also filed an amended cross-complaint asserting Holliday had converted the collateral security and asked for a set-off and damages for such conversion. Appellant answered in general denial and asserted that appellees' cross-complaint was not filed within the time required under the statute of limitations.

The issues being thus formed, the case was tried without a jury before the Judge of the Hancock Circuit Court on the above pleadings. The trial took place on September 19, 1955. On February 8, 1956, the Judge found in favor of appellant and against the appellees in the sum of $7,875.33. The court also found against the cross-complainants in favor of cross-defendant. Appellant filed a motion to modify the judgment and a motion for a new trial, both of which were overruled.

Appellant's motion for a new trial was based on the following grounds: (1) Error in the assessment of the amount of recovery in that the amount was too small; (2) the decision of the court was not sustained by sufficient evidence; and (3) the decision of the court was contrary to law.

The following are the assigned errors relied upon by appellant: (1) The court erred in overruling appellant's motion for a new trial. (2) The court erred in overruling appellant's motion to modify the judgment. There were two other errors alleged in the assignment of errors which concern certain demurrers of appellant to the answer and cross-complaint which were overruled. These were waived by appellant and were not involved in the argument and so will not be considered herein.

In its motion to modify the judgment, in substance, appellant claimed the judgment was erroneous because it did not conform to the pleadings, proof, decision or finding; that appellant received less relief than it was entitled to because of too large an allowance or set-off to the appellees; that appellant was entitled to receive 8 per cent. interest, as provided in the note, instead of 6 per cent.; and that appellant was entitled to attorney's fees.

The basis of appellant's motion to modify is contained in its memorandum attached thereto. After setting forth the entry of judgment, appellant says as follows:

'At the time of announcing said judgment, and as a part thereof, the Judge also delivered the following to the attorneys for plaintiff:

                   "Press ....................................... $2000.00
                    Tractor ...................................... 1500.00  "(written in)
                    Truck ......................................... 500.00
                    Scales ........................................ 500.00  "Memorandum not
                    Steel ........................................ 1000.00   entered in the
                    Pump .......................................... 250.00   record
                                                                  --------
                                                                  $5750.00
                

"Int on $9610.00 from 5/20/39 to 10/20/39 five

                months at 6% .................................... $ 240.25
                

"Int. on $3860.00 from Oct. 20, 1939 to Feb. 8, 1956

                at 6% ............................................ 3775.08
                                                                  --------
                    "Total Interest ............................. $4015.33
                    "Principal ................................... 3860.00
                                                                  --------
                    "Total Due .................................. $7875.33
                

'No attorney fees have been allowed in this case for the following reasons, although the complaint states that it is a suit on a note which has been assigned to plaintiff, the real action is not on the note but on an implied contract to be reimbursed for money paid. See 28 Corpus Juris page 1037, Section 214 on an implied contract, no attorney fees can be recovered. To recover attorney fees, there must be a suit upon an instrument which provides for attorney fees or the attorney fees must be authorized by statute.'

In the brief and reply brief, appellant argues that the memorandum submitted by the Judge was actually a finding of fact and was therefore a part of the record and should be considered by this court. Appellees in their argument take the opposite viewpoint.

It is obvious this memorandum purports to be a very informal statement by the Judge, given only to attorneys for appellant, and, as is clearly indicated by the memorandum itself, was not considered as a part of the record by the Judge. It was not signed, and the only means of identifying it in the record as a statement by the Judge is the assertion of such by appellant in its memorandum to the motion to modify the judgment.

Section 2-2102, Burns' Ind. Stat. (1946 Replacement), reads in part as follows:

'Upon trials of questions of fact by the court, it shall not be necessary for the court to state its finding, except generally for the plaintiff or defendant, unless one of the parties requests it, with a view of excepting to the decision of the court upon the questions of law involved in the trial; in which case, the court shall first state the facts in writing, and then the conclusions of law upon them, and judgment shall be entered accordingly.'

There are numerous Indiana cases wherein the Appellate and Supreme Courts have considered similar types of memoranda prepared by trial judges. In the case of Hinshaw v. Security Trust Co., 1911, 48 Ind.App. 351, 356, 357, 93 N.E. 567, 569, the trial judge, after rendering judgment, made a nunc pro tunc entry seeking to place in the record an opinion of the court purporting to have been delivered in writing by the judge at the time finding and judgment were entered. This court said:

'We are asked to consider this opinion for the purpose of determining what evidence was considered and what evidence was disregarded by the court in reaching a decision. No special finding of facts was requested, and none was made. The law does not require that a trial court shall deliver an opinion in writing. If such an opinion is delivered, it has no proper place in the record; and, even though such an opinion is copied into the record...