Ray v. Baker

• Decision Date: 02 June 1905
• Docket Number: 20,595
• Citation: 74 N.E. 619,165 Ind. 74
• Parties: Ray v. Baker et al
• Court: Indiana Supreme Court

74 N.E. 619

165 Ind. 74

Ray v. Baker et al

No. 20,595

Supreme Court of Indiana

June 2, 1905

From Boone Circuit Court; Samuel R. Artman, Judge.

Suit by Henry Ray against Charles Baker and wife. From a decree for defendants, plaintiff appeals. Transferred from Appellate Court under § 1337u Burns 1901, Acts 1901, p. 590.

Affirmed.

J Frank Hanly, Will R. Wood, William M. Acton and Charles M Zion, for appellant.

Higgins & Holloman, for appellees.

Jordan J. Montgomery, J., concurs in the result.

OPINION

Jordan, J.

On April 23, 1903, appellant instituted this suit to foreclose a mortgage alleged to have been executed by appellee Charles Baker, and Sarah Baker, his wife, on March 20, 1901, on seventy-seven acres of land, described in the complaint, situate in Boone county, Indiana, securing the payment of one principal note of even date for the sum of $ 1,560, together with certain coupon interest notes.

It is alleged in the complaint that the notes and mortgage therein described were all executed to Alva E. Junkens, of Homer, Champaign county, Illinois. Copies of the notes and mortgage in question were filed with the complaint, and appear on the face thereof to have been executed at Lebanon, Indiana, and are made payable at the Citizens Bank at Homer, Illinois. They are alleged to have been assigned by Junkens to the plaintiff on February 23, 1903. Appellees filed an answer to the complaint in seven paragraphs, the first paragraph of which is a general denial. The second alleges no consideration for the execution of the notes and mortgage, and that the plaintiff accepted the assignment thereof with full knowledge of that fact. The third is apparently constructed upon the theory that there was no consideration for executing the notes and mortgage. After alleging certain facts leading up to their execution, it is averred generally in said paragraph that these contracts were wholly without any consideration, and that the plaintiff accepted the assignment thereof with full knowledge of that fact. The fifth paragraph charges fraud upon the part of Junkens in obtaining the execution of said notes and mortgage. With some exceptions the sixth paragraph is substantially the same as the fifth. Appellees also filed a cross-complaint in two paragraphs, alleging facts similar in the order named to those set up in the third and fifth paragraphs of the answer, and demanded that the notes and mortgage be canceled. Appellant unsuccessfully demurred to the third, fifth and sixth paragraphs of the answer, and also to each paragraph of the cross-complaint. He then replied to the answer by a general denial, and a like pleading constituted his answer to the cross-complaint.

Upon the issues joined, the court, on request, made a special finding of facts, and stated its conclusions thereon against appellant. Over the motion of the latter for a new trial, assigning therein (1) that the decision of the court is contrary to law; (2) that it is not sustained by sufficient evidence; (3) surprise, etc.; and (4) newly-discovered evidence--a judgment was rendered that appellant take nothing by his complaint, that the notes and mortgage in suit be canceled, and that the defendants recover costs. The rulings of the court upon the demurrers to the answer and cross-complaint are assigned as errors. It is also assigned that the court erred in each of its conclusions of law, and in denying the motion for a new trial.

The court's special findings disclose substantially the following facts: In March, 1901, and prior thereto, Alva E. Junkens was residing in the town of Homer, in the state of Illinois, and, in addition to other business, was engaged in buying and selling stock, and as a real estate agent. He had extensive business experience, and was a man of pronounced business ability. The defendant Charles Baker, appellee herein, owned sixty-five acres of land situate in the state of Illinois, near said town of Homer. He and his wife, Sarah, a co-appellee herein, resided thereon. Said Charles Baker in the March aforesaid desired to purchase and become the owner of land in the State of Indiana, and for that purpose he entered into a contract with said Junkens to the effect that the latter should purchase said sixty-five acres of Illinois land for the price of $ 95 per acre; and, as a further consideration for said purchase, it was agreed by and between said parties that Junkins should accompany Baker to Indiana, and there find a tract of land which the latter would be willing to accept. The purchase money of the sixty-five acres of Illinois land, or so much thereof as might be necessary, was to be paid by Junkens on the land to be purchased in Indiana, and the remainder thereof, if any, was to be paid to said Charles Baker. Pursuant to this agreement and contract, said parties, about the 18th day of March, 1901, came to the city of Lebanon, in Boone county, Indiana, and there inquired of a firm of real estate agents in regard to the purchase of lands, and were by said agents directed to a tract of land situate in said county, containing seventy-seven acres, which they appear to have had in their hands for sale. These agents informed Junkens and Baker that this land could be purchased for $ 55 per acre. After Junkens and Baker had made some two or three inspections of the land in question, the latter agreed to accept it, and he and Junkens commenced negotiations with the owner thereof, one Robert Spears, for its purchase. In the meantime Spears had raised the price of the land from $ 55 to $ 58 per acre. Junkens advised Baker that it was worth this price, and thereupon Baker agreed to accept it. It was then agreed between said parties that Baker should convey the sixty-five acres of land which he owned in the state of Illinois to Junkens at $ 95 per acre, or, in other words, for $ 6,175, the conveyance thereof to be subject to a mortgage lien thereon of $ 2,500, the amount of said lien to be deducted from the purchase price. The remainder of the purchase money--$ 3,675--under the agreement was to be paid by Junkens. By the terms of the contract or agreement between said parties the tract of land in Boone county, Indiana, was to be conveyed to Baker, free from all encumbrances, for $ 4,466. After making said agreement and contract, Junkens, on March 20, 1901, procured said land to be conveyed by the owner thereof to himself, and on the same day, without the knowledge or consent of Baker, he executed a mortgage thereon for $ 2,200 to Joseph B. Homan, and appropriated said amount of money so obtained to his own use. On the 20th day of March, Junkens procured Baker to execute to him a deed for the sixty-five acres of land in the state of Illinois. In this deed of conveyance the consideration was stated to be $ 6,175, being at the rate of $ 95 per acre. The deed was executed and acknowledged by Baker before a notary public in said city of Lebanon. His wife, not being present, did not on said day join him in the execution of this deed to Junkens. Under the terms of the contract for the exchange or purchase of the aforesaid lands, there was a balance of $ 791 due from Baker to Junkens, said amount being the difference between $ 3,675--the net purchase money for the Illinois land which was due from Junkens to Baker--and the purchase price of $ 4,466, to be paid by Baker for the Boone county land, and it was agreed at that time between the parties that Baker should execute to Junkens his note for said amount, payable three years after date. To secure this note it was agreed that Baker should execute a mortgage on the seventy-seven acres of land in Boone county.

The court finds that Baker is a very illiterate man, and is practically unable to speak or write the English language, and at the time of the aforesaid transactions between him and Junkens he was unacquainted with business matters, and was wholly ignorant of the meaning of legal forms and proceedings. Prior to said time he had had numerous transactions with Junkens, by the way of selling him stock and grain, and he relied on the statements made by Junkens that the latter would prepare a note and mortgage to evidence and secure said sum of $ 791. The court finds that Junkens, instead of preparing a note for $ 791, and a mortgage on the Boone county land to secure the same, prepared the note and mortgage in suit, each of date of March 20, 1901; that the note so prepared by him represented $ 1,560, instead of $ 791, and was to be due and payable on March 20, 1904, with interest at six per cent., and five per cent. attorney's fees, with coupon interest notes attached. The mortgage to secure the notes was on said seventy-seven acres of land in Boone county, and by the terms of the note the interest was to be paid annually, and the same was evidenced by three coupon notes attached to the principal note, and secured by the mortgage. The notes and mortgage in suit are set out and made a part of the special finding. The mortgage contains many terms and stipulations, and provides, among other things, that if default is made in the payment of any of the notes or interest thereon, or the taxes upon the mortgaged premises, then and in either of said events the entire amount secured shall become due and the mortgage may be foreclosed.

The court further finds that Junkens, instead of presenting to Baker a note for $ 791, for him to execute, presented one for $ 1,560, and at the same time presented to him a mortgage to be executed on the Boone county land, securing said note for $ 1,560, together with the coupon interest notes attached thereto, and that Junkens then and there "falsely fraudulently, dishonestly and deceitfully" stated and informed Baker that said note was for $ 791, and that the mortgage was to...