Osborn v. Hall

Decision Date26 February 1903
Citation66 N.E. 457,160 Ind. 153
PartiesOSBORN v. HALL et al.
CourtIndiana Supreme Court

OPINION TEXT STARTS HERE

Appeal from circuit court, Hendricks county; R. W. McBride, Judge pro tem.

Action by Mary A. Osborn against Douglass Hall and others. Judgment for defendants, and plaintiff took an appeal to the Appellate Court, whence it is transferred under Burns' Rev. St. 1901, § 1337u. Modified.

R. F. Hollowell and Harding, Hovey & Wiltsie, for appellant. Holgate & Clark, for appellees.

JORDAN, J.

Action by appellant in the lower court against appellees herein, defendants below, to recover a balance alleged to be due and unpaid on a promissory note executed by Douglass Hall to appellant, and to foreclose a mortgage executed by the said Hall and wife to secure the payment of the note in suit when due. The issues tendered by the answer filed by the defendant Hall in regard to the note in suit were payment and non est factum. The defendant John T. Hocker pleaded, in his answer to the complaint, (1) the general denial; (2) payment; and (3) facts disclosing that he was the owner of the land against which the plaintiff sought to foreclose her mortgage by purchase from Hall and wife, the mortgagors; that the said premises were conveyed to him by the latter by warranty deed, subject to a mortgage of $1,308, executed to the plaintiff as shown by the record of said mortgage, as the same had been recorded in the recorder's office of Hendricks county, Ind., in which county the mortgaged premises were situated; that the mortgage, as it appeared of record in the recorder's office, showed that it had been executed to secure only $1,308, as evidenced by a promissory note; and that said defendant, without any notice or knowledge to the contrary, relied upon the record of the mortgage, and settled with Hall, from whom he purchased the real estate, accordingly, and when the principal note fell due he paid the plaintiff $1,308, the amount thereof as shown by the record of the said mortgage, together with all of the accrued interest thereon, and demanded that she satisfy the mortgage, which she refused to do. The prayer of the answer was that under the alleged facts no decree of foreclosure against the land so held by the defendant be rendered. The issues were joined between the parties on the complaint, answers, and reply, and on the trial the court, by request, made a special finding of facts, and stated its conclusions of law thereon against the plaintiff and in favor of the defendants, and rendered judgment, over a motion for a new trial, against the plaintiff for costs.

It appears that the plaintiff in her complaint alleged that on July 25, 1896, Douglass Hall, by his promissory note, a copy of which is filed herewith, marked ‘Exhibit A,’ and made a part hereof, promised to pay the plaintiff the sum of $1,380, with interest at 7 1/2 per cent., which interest was evidenced by coupon notes, all of which have been fully paid up to July 25, 1900.” The copy of the note filed with the complaint, and marked “Exhibit A,” expressly fixes the rate of interest at 8 per cent. per annum, instead of 7 1/2 per cent. as declared by the plaintiff in her complaint.

The special finding discloses the following facts: Douglass Hall and his wife on July 25, 1896, executed a mortgage to plaintiff upon certain real estate described, situated in Hendricks county, Ind., to secure the payment, when due, of one principal promissory note for $1,380 of even date, and due four years from the date thereof; that the mortgage also secured the payment of four coupon interest notes of the same date, each for the sum of $103.50, payable in 1, 2, 3, and 4 years from the date thereof, respectively, each bearing 8 per cent. interest per annum after maturity; that all of the aforesaid notes were payable to the order of the plaintiff, Mary A. Osborn, at the First National Bank of Danville, Ind. On the 5th day of August, 1896, said plaintiff left the mortgage, so executed, for record with the recorder of said county, and the recorder undertook to record it in Mortgage Record No. 31, at page 383, in his office, but in so recording the said mortgage it was stated in the record thereof that the principal note executed by the mortgagor was $1,308, instead of $1,380, as stipulated in said mortgage; that thereafter Hall sold his said real estate to the defendant John T. Hocker subject to said mortgage in favor of the plaintiff, Osborn, which was represented at the time by said Douglass Hall to be of the face value of $1,308. Before receiving the deed of conveyance from the said Hall, Hocker examined the Mortgage Record No. 31, at page 383, being the record in and upon which the said mortgage executed by Hall and wife to the plaintiff had been recorded, and there discovered that the same, as recorded, secured the principal sum of $1,308, together with four coupon interest notes, each for the sum of $103.50, and when Hocker purchased the land and received the deed of conveyance therefor he in good faith believed that the principal sum which the mortgage was given to secure was $1,308, and he had no knowledge or information to the contrary. That thereafter, at the times the interest fell due on the mortgage indebtedness, Hocker paid to the duly authorized representative of Mary A. Osborn the interest thereon as represented by the coupons, and on the 25th day of July, 1900, the day on which the principal sum of the mortgage indebtedness matured, he paid to the duly authorized agent of the plaintiff the principal sum of said mortgage indebtedness as the same appeared of record, to wit, $1,308, and all interest due thereon, and requested that the mortgage be released and satisfied of record. He was then informed that the principal sum secured by the mortgage was $1,380, and not $1,308, as the same appeared upon the record, and this was the first knowledge that Hocker received that the mortgage was executed for any other or greater sum than $1,308. Under the contract and agreement between the plaintiff, Mary A. Osborn, and the defendant Douglass Hall, it was agreed that the principal note should bear interest at the rate of 7 1/2 per cent. per annum until paid. Hall executed to the plaintiff his said four several coupon interest notes of $103.50 each, which evidenced the interest thus agreed upon, but the principal note as actually executed by the defendant to the plaintiff provided that he should pay interest at 8 per cent. per annum until paid, the rate therein being indicated by the printed word “eight.” After the execution of the principal note, and before its maturity, the plaintiff, without the knowledge or consent of Hall, placed over the word “eight” in the said principal note the figures “7 1/2” with a lead pencil, and without erasing the printed word “eight,” other and except that the lower part of the vertical line of the figure “7” passed through the letter “h” in the word “eight,” and the figure “2” in the fraction was inserted between the words “eight” and “per.” These figures, as the court finds, were made without any intent to defraud, and without any intention to change the character of the obligation, but with the intent of changing the rate of interest as printed in the note to the rate of interest as agreed upon between the parties, and as shown or expressed in the said several coupon interest notes. Hall had no knowledge that these figures made by the plaintiff with the lead pencil were placed in the said note until after the commencement of this action, and never consented thereto. Upon the facts as found, the court concludes that the plaintiff was not entitled to a foreclosure of her mortgage, or to recover anything upon the note in suit; that the defendants were entitled to recover their costs; to all of which...

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