Worley v. Moore

• Decision Date: 26 May 1884
• Docket Number: 11,069
• Citation: 97 Ind. 15
• Parties: Worley v. Moore
• Court: Indiana Supreme Court

97 Ind. 15

Worley v. Moore

No. 11,069

Supreme Court of Indiana

May 26, 1884

Petition for a Rehearing Overruled Sept. 20, 1884.

From the Owen Circuit Court.

J. R East and W. H. East, for appellant.

J. H Louden, R. W. Miers, J. W. Buskirk and H. C. Duncan, for appellee.

OPINION

Zollars, J.

Action by appellee to recover from appellant an amount of money paid through mistake and fraud upon a settlement of accounts.

Upon a former appeal, the judgment was reversed upon the insufficiency of the complaint. Upon a return of the case to the court below, the complaint was amended, and the venue changed from Monroe to Owen county.

Upon the former appeal, the first paragraph of the complaint was held bad because it did not aver that appellant had notice of the mistake before the commencement of the action. Worley v. Moore, 77 Ind. 567. As amended, it is averred in this paragraph that when appellee discovered the mistake, he informed appellant of the fact, asked a correction, and demanded a repayment of the amount in excess of the amount actually due, which appellant refused. This, we think, is sufficient, and sufficiently fixes the time of notice and demand, as prior to the commencement of the action.

An amended complaint, in a case of this character, is not to be held as stating the cause of action as it exists at the time of such amendment, but as it existed when the action was commenced.

A further objection is now made to the first paragraph, that it does not state facts showing a mutual mistake in the settlement, nor, indeed, any mistake at all. And further, that if a mistake be conceded, the facts stated show appellee to have been guilty of such negligence as will defeat a recovery. The averments of the complaint, bearing upon these points, are substantially, that for a number of years there was an account existing between the parties; that appellee was indebted to appellant upon a number of interest bearing notes, upon which various credits and payments were and should have been endorsed; that in December, 1877, a settlement was had, when it was concluded that appellee's indebtedness amounted to $ 3,450.85, which he then paid. The several notes, accounts, payments, the amounts found due, and the amounts in fact due, are stated in detail.

It is further averred that appellant alone computed the interest on the several notes with the partial payments, and assured appellee that he had made a careful and correct computation, and that the amounts stated were the correct amounts; that knowing that appellant was a proficient accountant, appellee reposed full faith and credit in his statements, and relied upon the correctness of the amounts stated and paid them, not then knowing of any mistake.

It is further averred that appellant made a mistake in the computation of the interest, and thus found the principal and interest due to be $ 3,450.85, when in fact, upon a proper calculation of the interest, the amount due was $ 2,000, and that both parties relied upon and acted upon the erroneous calculation in closing up the settlement, and making and receiving the payment.

These averments, we think, show a mistake, and as to the final settlement a mutual mistake. Having assumed to make the calculation of the interest, and having assured appellee in positive terms that the result was correct, and having received, upon the faith of the statements, a larger amount than was due to him, appellant is not in a condition to charge appellee with negligence in relying upon such statements. If the facts stated are true, as the demurrer admits, appellant can not in good conscience retain the money not due him. Our conclusion is fully supported by the cases of Brown v. College Corner, etc., G. R. Co., 56 Ind. 110, and Lewellen v. Garrett, 58 Ind. 442.

An objection is made to the second paragraph of complaint, that it does not show a right of action in appellee. We think otherwise. The paragraph is not very specific, but states enough we think to show a right of action in appellee. The averments are, in substance, that in 1874 appellee was indebted to one Woods upon two promissory notes; that appellant represented to appellee that Woods desired payment, and that if intrusted with the money he would give it to Woods and have it credited upon the notes; that appellee gave to him $ 1,500 to be applied on the Woods notes, and that instead of giving the amount to Woods, and having it credited upon the notes, he converted $ 600 of the amount to his own use, and refuses to repay it to the appellee. There is a further averment that appellee was compelled to pay that amount to Woods. This latter averment is the statement of a conclusion rather than of a fact, and may be disregarded in determining the sufficiency of the paragraph. We think that the other averments show that appellee constituted appellant his agent to pay over the money to Woods and have the amount credited upon the notes, and that instead of doing so he converted a portion of it to his own use. For the amount so converted he is liable to appellee, whether appellee has paid Woods or not. The paragraph clearly makes a case under the ruling in Bunger v. Roddy, 70 Ind. 26.

A third paragraph sets up fraud in the settlement on the part of appellant. To this complaint appellant filed answers and a cross complaint, asking for a rescission, etc. Under this cross complaint appellant testified, substantially, that at the time of the settlement mentioned in the complaint appellee was indebted to him in the sum of $ 3,450, which, without mistake, was agreed upon as the amount; that appellee liquidated this amount by paying to appellant $ 50 in money and conveying to him one hundred and ten acres of land, at the price of $ 3,400; that he was induced to take the land at that price by the false and fraudulent representations of appellee, upon which he relied, that he was in debt to the amount of $ 17,000, that being more than he was worth, and that unless he, appellant, took the land at the price fixed he would lose the most, if not the whole, of his claim against appellee; that the land was not worth over $ 2,000; that he had taken possession of the land, paid the taxes, and improved and increased its value, and farmed it but little; that after this suit was commenced he had tendered to appellee a deed for the land, with an offer to pay all damages to the land, if any, and demanded a rescission of the contract and sale of the land, and a return to him of the notes and accounts surrendered upon the settlement and conveyance of the land; that he at no time tendered or offered to return to appellee the $ 50 received from him.

As to whether or not appellee made any such representations as to the extent of his financial embarrassment, there is a conflict in the evidence.

The court below instructed the jury in the thirteenth instruction, and to the same effect in the eleventh and twelfth, that unless appellant, when he offered to rescind, offered also to return the $ 50, he could not succeed upon his cross complaint. Appellant contends that in this regard the instructions were erroneous. We think otherwise.

The rule is well settled that if a contract is rescinded at all, it must be rescinded in toto; that a party can not rescind a contract and retain the whole or a part of the benefits of it, and that a contract can not be rescinded unless the parties can be placed in statu quo. Scott v. Wallick, 24 Ind. 124; Gatling v. Newell, 9 Ind. 572; Watson Coal and Mining Co. v. Casteel, 68 Ind. 476; Patten v. Stewart, 24 Ind. 332.

In the case before us, the evidence shows that appellant held a number of notes and accounts against appellee. Upon a...