Klitzke v. Smith

46 Ind. App. 26 | Ind. Ct. App. | 1910

Roby, J.

Appellee owned a milk station, including building and machinery, at Leiters Pord, which he sold on November 4, 1903, to Klitzke Brothers, a firm consisting of • four persons, who in payment therefor executed four promissory notes aggregating $1,200, and secured by a chattel mortgage on the equipment purchased.

1. On February 17, 1904, Smith filed his complaint on said notes, and for the foreclosure of said mortgage. Summons was issued and served on three of the Klitzkes only. On May 31, no action having been taken in the pending suit, Dowd entered into negotiations with the Klitzkes for the purchase of said station, and was informed by them that if he would arrange with Smith for the dismissal of the suit, take up the notes and satisfy the mortgage, they would transfer the plant to him for a specified sum. Dowd communicated these facts to Smith, and the following contract was thereupon made between them:

“Leiters Pord, Indiana, May 31, 1904. Received of J. W. Dowel, $75 in consideration of my canceling suit now pending against Klitzke Brothers, of Athens and Hammond, Indiana, said suit involving the plant and machinery located at Leiters Pord, Indiana, and I agree to accept $725 additional in consideration and full satisfaction for the amount of $1,100 due from Klitzke Brothers, said amount to be paid inside of ten days, providing the suit' is canceled and canceled notes are turned over to said J. W. Dowd.

J. W. Dowd.

W. PI. Smith.”

Dowd then exhibited this contract to the Klitzkes, who accepted it, and consummated the sale, and delivered possession to Dowd, who removed the property from Leiters Ford, leaving the notes unsatisfied and the mortgage undischarged. It is averred that Dowd, so far as Smith would permit him, performed the conditions of the contract on his part; and that the Klitzkes have performed all the conditions thereof on their part.

These facts are set up by answer to an amended complaint filed by Smith in December, 1904, in which ^allegations for the foreclosure of the mortgage were omitted. A demurrer to this answer for want of facts was sustained.

2. We are of the opinion that the demurrer should have been overruled. Smith represented by the written agreement with Dowd, for the purpose of enabling the latter to obtain title to the property, that the pending ease would be canceled. This representation was, in effect, made to the Klitzkes. Dismissal is the equivalent of cancelation.

3. The Klitzkes had a right to act on this representation, as it is shown that they did. If Smith were permitted to disregard it, he would commit a fraud, and this the courts will not allow. Fifer v. Rachels (1906), 37 Ind. App. 275; Anderson v. Hubble (1882), 93 Ind. 570, 47 Am. Rep. 394.

4. 5. 1. Estoppels are raised for the purpose of preventing fraud, and, under the facts pleaded, Smith was estopped from proceeding to judgment. The facts stated show a contract between Smith and Dowd for the benefit of the Klitzkes. It is not necessary to such a contract that the beneficiary pay any consideration. McCoy v. McCoy (1903), 32 Ind. App. 38, 102 Am. St. 223. But, in reliance upon the contract, the Klitzkes have parted with value by the transfer of their property. They claim under it and accept its terms. The first provision of the instrument is that the pending suit shall be dismissed. Appellee has been paid $75 to do this. The act is one which he only can do. He has not done it, and is therefore in default by its further terms. The notes are to be canceled and surrendered upon the payment of $725 within ten days.. It is averred that Dowd has complied with this provision, except as he has been prevented by Smith from so doing, and that he is ready and willing to pay said sum. This being true, Smith must abide by the agreement and accept the amount specified.

6. The answer was good as a bar to the further maintenance of the action. Herod v. Snyder (1878), 61 Ind. 453; Farmers Bank v. Orr (1900), 25 Ind. App. 71. As pleaded, it constitutes a complete answer; the contract to cancel the suit implying the payment by Smith of costs up to that time.

Judgment reversed and cause remanded, with instructions to override the demurrer to the paragraph of answer, and to permit the reforming of issues if desired, and for further proceedings.