32 Ind. App. 489 | Ind. Ct. App. | 1903
Transferred from the Supreme Court under the act of March 12, 1901;
Error is assigned upon the conclusions of law stated upon a finding of facts substantially as follows: In January or February, 1895, appellant and a large number of other persons proposed in'-* writing to one Huffman to purchase from him, at $100 each, lots for which they subscribed, if Huffman would procure title to a certain tract of land, and erect thereon certain factories, and plat the remainder into city lots. Appellees were named as trustees, authorized to collect the money, distribute the lots “by lot,” in a manner 'to be determined by them; the subscribers agreeing to accept and pay for such lots as should be set off to them. When fifty per cent, of the price of the lots had been paid, Huffman was to convey the lots to the subscribers by perfect title, in, fee simple, free from encumbrances; the subscribers to execute their notes in two payments for the residue. Appellant subscribed for one of the lots. Huffman accepted the proposition, but before performing his part of the agreement, except making a plat of 350 lots, which plat was not recorded, assigned his interest therein to the firm of Charles & Co., who assumed Huffman’s duties, but who did not carry out the agreement. Afterwards, in March, 1895, appellant, with part of the persons who signed the Huffman proposition, with others, signed a second proposition,
As conclusions of law the court stated' that appellees are entitled to recover $105 and costs, and that appellant is entitled to the possession of the deed tendered.
It is first argued that the findings show misrepresentations and concealment of material facts on the part of those promoting the enterprise. But the record discloses nothing of this character which would prejudice the rights of appellant, or render the contracts unfair. When the second proposition was signed the parties representing themselves to be the owners of the land to be platted, of which lot 271 was a part, were in fact the owners; and three of them owned the other tract, and had previously conveyed it to Oldfather in trust for them. It is not shown that there were any secret equities affecting appellant’s rights. At no time was the title to the land in
It is argued that the deed from Oldfather conveyed no title. When the- grantors conveyed to him that part of the land in-section five, the declaration of trust executed at the same time provided that the- trustee held the land in trust for his grantors, and was to convey the lots to the various parties who should be entitled to such conveyances under their subscriptions in aid of the factory; such lots to be conveyed when paid for. The trustee accepted the trust, and it became binding upon him. He had knowledge of the prior subscription contracts. Nothing further was to be done by the grantors. It is true, appellant had not paid for the lot, but when the deed was tendered the last payment was long past due. By the declaration of trust he was to convey the lots to those entitled to them under their subscriptions in aid of the factory. Under the contract a subscriber was to receive his deed when he had paid half the price, and was to give his notes for the balance. As the declaration of trust was made with reference to the subscription contract, and as equity looks to the intent rather than to the form, when the declaration of trust requires that the trustee shall make the deed when the lot is paid for, it must be held to mean when paid for according to the terms of the subscription. We do not think it can be said that the trustee was merely a nominal
It is also argued that the grantors of the trustee reserved the power to revoke the trust. But no authority to revoke it is reserved in the instrument creating it. §3407 Burns 1901. It is true that subsequent to the execution of the deed to the trustee the grantors gave to him a written order to make deeds for lots to whomsoever a person named should direct. But this order could not affect the terms of the written declaration of trust previously executed. It had expressly directed the trustee 'to convey the lots to certain persons. The trustee knew of the subscription contracts. The declaration of trust refers to these subscriptions, and must be construed with reference to the subscription contracts. lie was to convey the lots to the various parties who should be entitled to conveyances under the subscriptions in aid of the factory. 3STo authority was reserved by the grantors to revoke the power given the trustee and without such reservation the grantors had no such authority.
It is further argued that the contract was illegal in its inception; that the lots were distributed by means of a lottery, which was against public policy, and void. . In the second proposition made by the subscribers they refer to their subscriptions to the first proposition. In the first proposition, which was practically abandoned, the appellees were named as trustees who were “authorized and required” to distribute the lots among the subscribers by lot; the same to be done in some fair and equitable man
The court finds that at no time prior to the distribixtion, October, 1895, were the details of any plan for the distribution of the lots among the subscribers ever discussed or talked about in any manner, or known by any person, bxxt that it was at all times known to the owners and the subscribers that the distribution was to be by means of a lot drawing. It is also found that a notice, which appellant l-eceived, was sent to the subscribers to meet at a certain time aixd place to determine xxpon a plan of distribution, and to distribixte the lots; the notice containing the details of a plan proposed by the subscribers’ committee named in the second proposition; that the meeting was held; that one of the subscribers, not a vendor’, was elected president, and another subscriber, not a vendor, outlined the plan for the distribution which had been set forth in the notice, which plan was voted upon by the subscribers present, and was unanimously adopted by the meeting. Three of the graixtors were present at the meeting, but they were all sxxbscribers, and it does not appear that they took any active part in the meeting. The firm of Chaxdes & Co. was not present when the plaix of distribution was determined, but was afterwards present while the distribution was being made. It is true, the court finds that the lots, when platted, were of uneqxxal value. But it is also foxxnd that of the land to be platted in the propositions made by the subscribers, part of it wa,s
It seems that the findings show, in effect, that á number' of persons agreed, for a consideration named, to' buy & tract of land which was afterwards to be platted into lütsv Each purchaser was to liavo as his part of the land one of these lots, for which he was to pay $100. The land was platted into lots, and the purchaser's afterwards met and determined among themselves the manner in which the lots should be assigned among them. The contract made by each subscriber was one he had a right to make'. It is not shown that the promoters did anything for which they would be liable to indictment for conducting a lottery. Before the meeting held to determine the manner of distribution they had contracted away their interest in the property involved in the transaction. The subseribers were free to act for themselves in any manner they might choose. Induced by a desire to aid an enterprise which they believed would be an advantage to them as citizens, they entered into a lawful contract to buy the land, and afterwards agreed among themselves upon the manner in which it should be divided. Appellant was not present .at this meeting. But he had never rescinded nor offered to rescind his subscription, and while his contract was several and not joint, yet the subscribers were in a sense pursuing a common purpose. See Ft. Wayne, etc., Co. v. Miller, 131 Ind. 499, 506, 14 L. R. A. 804. Tie was notified of the subscribers’ meeting, and the purpose for which the meeting would be held. Tie continued, without objection, to be a subscriber. He knew the meeting was to he held, and entered no objection, and failed to make any response whatever to the notice received. Under all the circumstances it must be held that he was bound by the result of the meeting, .There is nothing
In Lynch v. Rosenthal, 144 Ind. 86, 31 L. R. A. 835, 55 Am. St. 168, cited by counsel for appellant as controlling in this appeal, it is said, quoting from Rothrock v. Perkinson, 61 Ind. 39: “It is well settled in this State that every scheme for the division or disposition of property or money by chance, or any game of hazard, is prohibited by law, and that every contract or agreement in aid of such a scheme is void as against public policy.” In that case, “by the definite language of the contract,” the lot which appellee agreed to purchase was to be determined by lot. The appellee had no choice whether he was to pay $100 or $300. A prize lot was to be awarded to some one in addition to the lot subscribed for; the prize lot to be awarded to some one by the result of chance. Appellant participated in the drawing, which, was conducted according to a plan suggested by him, and not by a plan adopted by the subscribers themselves. In all these particulars that case differs from the case at bar. It can not be said that the rule declared in the above case would prevent three owners in common of a tract of land from dividing the same into three parcels, and then agreeing among themselves to determine by lot the particular' part each should have. Under the laws of this State the
In Chancy Park Land Co. v. Hart, supra, where- the plan of distribution, adopted by the subscribers themselves, was similar to that in the case at bar, the court said, after quoting certain definitions of a lottery: “It thus appears that there must be some plan or scheme, on the part of the promoters of the enterprise alleged to be unlawful, for the sale or disposition of property by lot or chance, before it can be said to have the character of a lottery. If the sale is without the purpose that the property, or .any part of it, shall be obtained by the purchaser through chance, and this does not result from the nature of the transaction, then it is not so tainted. The sale of the lots to the subscribers in this case was not in pursuance of any design to promote a lottery, or in evasion of the law. Each subscriber contracted, — as he had a right to do,— for the purchase of one or more of the lots, with the understanding that they should be apportioned as the subscribers themselves might determine. Having agreed to buy before the land was platted, — induced by a desire to aid an enterprise of anticipated advantage to the city, — ■ they concluded, after much discussion, and the proposal of other plans, to make the selection by drawing the number of a lot and a name from different boxes, at the same time. We know of no good reason why these purchasers
It is further insisted that the findings show appellant’s lot was encumbered by valid liens for more than its value. The proposition by the sureties on the judgments made to the State Bank of TVarsaw and the Hall estate, and accepted, was that, for the purpose of converting the real estate into cash, and applying the proceeds to the payment of the judgments, the sureties requested the bank and the executor of the Hall estate to release the land from the liens, in consideration of which they agreed that all proceeds for the sale of the land should be applied on the liens, and further agreed that the “release of said real estate shall in no way affect our liability upon said judgments and mortgage notes, and that we and our property will remain bound for the payment thereof, the same as though such release had never been executed.” The releases, entered upon the records and properly attested, stated that they were for a valuable consideration. There is no finding that the releases xvere executed xvithout consideration, and we think the findings show a sufficient consideration. Under the present statute, such a release is conclusive upon the judgment plaintiff, in favor of subsequent purchasers or lien holders in good faith. §590 Burns 1901. In Conley v. Dibber, 91 Ind. 413, cited by counsel, a county auditor had released a school-fund mortgage; and it was held, in pleading such release, it xvas necessary to aver that the mortgage had been paid, because without such payment the auditor had no authority to release the mortgage; that a release without payment did not remove the encumbrance. The auditor can release such a mortgage only as the statute directs. §5818 Burns 1901. In Harris v. Boone, 69 Ind. 300, the release was executed upon a condition that it was not to be binding
The complaint avers that the suit is brought for the use and benefit of the firm of Charles & Co., and, as the court found that the firm would not recover and would not he entitled to recover any part of the money collected in this suit, it is argued that the findings do not sustain the averments of the complaint. By the first contract appellees were appointed by the subscribers’ trustee^ to collect the subscriptions and pay the money collected to Huffman or his order. Huffman assigned this contract to Charles & Co. By the second contract the subscribers agreed to pay to the trustees named in the first contract the money to be used to secure the factory. By the contract between the vendors and the firm of Charles & Co. the firm purchased from them a tract of land adjoining the plat, to be paid for in three payments, on which they agreed to erect the factory. The firm ordered these payments to be paid to the vendors out'of subscription money, the firm to receive the residue of the subscriptions in consideration of the erection of the factory. The deed to the firm was held in escrow until the purchase price was paid. The vendors, not having received the purchase money in full, agreed to turn the same over to the bank and the Hall estate. And while the finding is that the firm will not receive any of the money collected in this ■suit, yet the collection of the subscription is indirectly for the benefit of the firm, as it is in fact applied on the purchase price of the land purchased by the firm from the vendors. When this has been paid, they will then receive their deed. The subscribers themselves conferred upon the trustees the power to collect the subscriptions, to bo used for a certain purpose. The money was made payable to the trustees for the use of some party who would erect the factory. The firm did erect the factory.
It is a general rule that a purchaser is not required to accept a conveyance from a third party, but only from his vendor. But in the case at bar the contract provides that the vendors shall convey or cause to be conveyed the lots to the subscribers. It does not appear that when the deed was tendered to appellant he objected to receiving it because it was executed by Oldfather, nor does it appear that he ever gave any reason for refusing to accept the deed. He had been notified when payment was demanded, prior to .the tender of the deed, that the lots had been conveyed to Oldfather so as to facilitate the execution of the deeds. The grantors agreed in writing to indemnify Oldfather for any liability he might incur from executing warranty deeds to the subscribers.
Appellant’s counsel also argue that appellees have been guilty of laches that bars their right to recover. Time does not seem to have been of the essence of the contract. Appellant was entitled to a deed when he had paid fifty per cent, of the purchase price. He had paid nothing. He made no reply to frequent demands for payment. Eelying on the subscribers’ promise to pay, the factory was completed according to the contract. It is not shown that appellant was ready at all times to perform the conditions required of him. He gave no reason for refusing to accept the deed when tendered. He knew or had means of knowing his rights as a subscriber. He knew by the notices sent him that the other parties to the contract were relying upon his promise. He made no reply to these notices. He did nothing towards repudiating his subscription; his continued silence was inconsistent with its repudiation. He knew the vendors were still asserting their rights under the
“When a party,” says the author in Pomeroy, Eq. Jurisp. (2d ed.), §965, “with full knowledge, or at least with sufficient notice or means of knowledge, of his rights, and of all the material facts, freely does what amounts to a recognition of the transaction as existing, or acts in a manner inconsistent with its repudiation, or lies by for a considerable time and knowingly permits the other party to deal with the subject-matter under the belief that the transaction has been recognized, or freely abstains for a considerable length of time from impeaching it, so that the other party is thereby reasonably- induced to suppose that it is recognized, there is acquiescence, and the transaction, although originally impeachable, becomes unimpeachable in equity.” See, also, Pomeroy, Eq. Jurisp. (2d ed.), §1408; Story, Eq. Jurisp. (13th ed.), §775; Bennett v. Welch, 25 Ind. 140, 87 Am. Dec. 354; Huff v. Lawlor, 45 Ind. 80; Davis v. Heady, 7 Blackf. 261; Conwell v. Claypool, 8 Blackf. 124.
It is also argued that the title conveyed to appellant is not free from reasonable doubt. It must be remembered,' however, that appellant is not in the position, ordinarily, of a person desiring to purchase. The consideration that' induced him to subscribe for the lot was the location and erection of the factory. He placed his own estimate upon the value to him of the erection of the factory. The factory was erected in reliance upon his promise to pay his subscription, and for which he agreed his subscription money was to be expended. The lot was not the sole consideration for the subscription. The court found that the deed tendered was sufficient to convey a merchantable title. This may not be, strictly speaking, a perfect title, as re
The findings show that the tender of the deed to appellant was sufficient. The tender was not absolute, but was restricted by certain conditions, which by the terms of the contract were to be performed by appellant before he was entitled to a deed. Such a conditional tender is valid. Bruce v. Smith, 44 Ind. 1; Huff v. Lawlor, 45 Ind. 80; Lynch v. Jennings, 43 Ind. 276. When the suit was commenced the deed was deposited with the clerk of the court, to be disposed of as ordered by the court. Goodwine v. Morey, 111 Ind. 68. In Vawter v. Bacon, 89 Ind. 565, the vendor demanded notes containing provisions in excess of the agreement between the parties. In King v. Finch, 60 Ind. 420, a tender of the amount due on a note was made at its maturity to a person who had possession-of the note, but who stated that he was instructed not to receive the money. Held, that the tender was invalid, that equity can not supply a defect in a tender, and that the maker was liable for interest after maturity.
The fact that there were liens upon the property did not constitute- a breach of the contract between the parties. The property was encumbered when the subscriptions were made., but it does not appear appellant made any objection
The executor of the Hall estate had authority to release the Hall judgment. There is no finding that it was executed without consideration. It is not shown there was any fraud or collusion or wasting of the assets of the estate. “The executor,” said the court in Underwood v. Sample, 70 Ind. 446, “has, in this State, a general, and in many respects an absolute, power over the debts due the estate of his testator. When done without fraud or collusion, he may assign or release such debts and may exercise general acts of ownership over them in regard to their security or collection, subject only to his liability on his bond for any loss which may occur by reason of his mismanagement of such debts.” See, also, Latta v. Miller, 109 Ind. 302; Hamrick v. Craven, 39 Ind. 241; Weyer. v. Second Nat. Bank, 57 Ind. 198.
Judgment affirmed.