Michael v. Holland

• Decision Date: 24 March 1942
• Docket Number: 16674.
• Citation: 40 N.E.2d 362,111 Ind.App. 34
• Parties: MICHAEL v. HOLLAND.
• Court: Indiana Appellate Court

40 N.E.2d 362

111 Ind.App. 34

MICHAEL v. HOLLAND.

No. 16674.

Appellate Court of Indiana, in Banc.

March 24, 1942

Samuel J. Mantel and George P. Doyle, both of Indianapolis, for appellant.

Rhoads & Jacobs and Karl M. Jacobs, all of Indianapolis, for appellee.

BEDWELL Presiding Judge.

This appeal involves the question of the legal sufficiency of evidence to establish a valid gift of a simple debt by a creditor to his debtor.

The appellant, Joseph L. Michael, filed an action against the appellee, Albert Holland, to recover the sum of $300 which appellant claimed was due him because of a loan made to appellee. The cause was tried by the court which made a special finding of facts and stated conclusions of law thereon.

Appellant filed a timely motion for a new trial and he is appealing from the action of the trial court in overruling the same. The specified grounds thereof upon which he relies are that (1) the finding of the court is not sustained by sufficient evidence, and (2) the finding of the court is contrary to law.

Appellant is contending that the evidence was insufficient to sustain paragraphs numbered seven (7) and eight (8) of the finding of the trial court, which were as follows:

"7. That plaintiff by executing defendant's check for the amount of $150 and his conversation at the time in accepting the same, as hereinbefore set out, executed a gift to the defendant for the residue of said loan.

"8. That the gift of the residue of said loan was further supported by the consideration of the expectancy of defendant continuing purchasing merchandise from the Michael Company, which defendant did do for over four (4) years thereafter."

The remainder of the finding of facts shows, in substance, the following: That at all times during the transaction upon which the cause of action is predicated, the appellant was engaged in selling groceries and merchandise for the J. P Michael Company, wholesale grocers. That the appellee, until August, 1934, and for several years prior thereto, was in charge of the purchase of foodstuffs for the Wm. H. Block Company and as such purchased merchandise from the J. P Michael Company through the appellant. That subsequent to August, 1934, the appellee left the employ of the Wm. H. Block Company and started to operate his own restaurant and continued to purchase foodstuffs from the J. P. Michael Company for himself as owner of such restaurant. That during the month of May, 1934, and prior thereto, the appellant and appellee each had brokerage accounts with a brokerage firm, and in May, 1934, the appellant, at the request of the appellee, caused the sum of $300 to be transferred from his account to the account of appellee, and in July, 1934, the further sum of $150 was transferred, at the request of appellee, from appellant's account to appellee's account; that because of such transfers the appellee became indebted to appellant in the sum of $450. That during the month of August, 1934, the appellee paid the appellant the sum of $150, which payment was made by a check written by the appellant and signed by the appellee, and at that time appellant stated that the sum of $150 was all that he wanted; that appellee had purchased considerable merchandise of the J. P. Michael Company and appellant desired to show his appreciation for such orders. No payments were made on account of such loan except such sum of $150, and no demand was made by appellant for the balance of the loan until October of the year 1938; that prior to such time the appellee had continued to purchase foodstuffs from such company.

The trial court stated as a conclusion of law upon the foregoing finding of facts that the appellant executed a gift to the appellee of the balance of said loan in the sum of $300, which gift was supported by previous benefits received from appellee and the expectancy of appellant receiving further benefits from the appellee. The judgment of the trial court was that the appellant take nothing by his action.

The evidence is practically without conflict as to all matters except what occurred in August of 1934 between the appellant and the appellee, when the appellee made a payment of $150 upon his indebtedness. The appellee testified that the $150 was repaid at the office of appellant and that the appellee went to see the appellant personally to repay the money. He further stated that he told the appellant that he had received his commission from Blocks and he had come to pay him what was owing; that he pulled out his check book and said he wanted to pay him, whereupon appellant picked up the check book and filled out the check for $150; that appellee stated to appellant that the amount owing was $450, but appellant said that he appreciated all that the appellee had done for him; that he had never given him anything; that the appellee then stated that he didn't want anything and that his job meant more than the $300; that appellant told him to forget it and thereupon appellee signed the check and nothing further was done until he received a letter from appellant requesting payment.

Upon cross-examination the appellee further stated that when appellant wrote the check for $150 that he (appellee) stated that he did not want to feel obligated or feel that he would have to buy from appellant in the event that he received better prices elsewhere; but appellant told him, "There's nothing attached to this, you are under no obligation to me at all. There are no strings attached to this." The appellant denied the conversation recited by appellee.

Upon many occasions this court and the Supreme Court of this State have passed upon the requisites of a gift inter vivos, where the subject of the gift is a chattel or a chose in action that is evidenced by a written instrument such as a bank deposit, corporate stock, a negotiable instrument, a bond or check; but as far as we have been able to ascertain, no case in this State has dealt with the question of what constitutes a good forgiveness of a simple debt due from the donee to his donor. It is well settled here, as well as in other jurisdictions, that the delivery of the written instrument evidencing an obligation to pay, such as a note or bond, with intent thereby to give the debt to the donee, is a good gift of the debt.

In the case of Reasner, Adm'r, v. Bohne, 1921, 76 Ind.App. 114, 129 N.E. 490, this court considered the sufficiency of evidence to show a valid gift of a promissory note, and reviews many decisions in this and other jurisdictions. The court there held that the evidence was insufficient to support a finding that the note in question was delivered or that the decedent had surrendered dominion over it. Among the rules of law which the court quotes from opinions in this and other jurisdictions are the following:

(A) "A 'gift inter vivos' of personal property may be defined as the voluntary act of transferring the right to and the possession of a chattel, whereby one person renounces, and another acquires, immediate right and title thereto. It cannot be made to take effect in the future."

(B) "An agreement or promise to make a gift, being without consideration, is void. * * * There must be both an intention to give and a stripping of the donor of all dominion or control over the thing given. * * * The change of the title is and must...