McCoun v. Shipman

Remy, J. Action by appellant upon two promissory notes dated January 10, 1913, each calling for $2,500, one of the notes to become due January 10, 1917, and the other January 10, 1919. The notes were given as part of the purchase price of certain real estate and were secured by mortgage. Appellee’s answer admits the execution of the notes and mortgage, but pleads in avoidance that the sole consideration therefor was the sale and purchase of the mortgaged real estate described in the complaint; that appellant, the payee of the note, was guilty of fraud in the sale of the real estate and in procuring the notes and mortgage, in that she misrepresented the value and fertility of the real estate; that, after the execution of the notes and mortgage by appellee and after he had possession of the land, he learned of the fraud and threatened appellant with an action for damages. Thereupon, appellant’s husband, who had conducted all negotiations of the sale, and who at the time was acting as appellant’s agent, admitted that the representations as to the value and fertility of the soil were false, and orally agreed that, in consideration of appellee’s not filing an action based upon the fraud, his wife would, in settlement of the notes and mortgage, accept in full settlement therefor the sum of $1,000 and interest in the. sum of $50, which interest was at the time paid and accepted; that both' parties to this suit acted upon such compromise settlement, and appellee, relying upon such settlement agree — 215 — ment, made valuable improvements upon the land and in all things carried out his part of the agreement. The court submitted the questions of fact as to the subsequent parol agreement to the jury which found in favor of appellee. The court, treating the verdict of the jury as advisory, found for appellee on his special answer and, on April 10, 1918, rendered judgment against appellee for $1,000 and costs. A motion by appellant for a new trial was overruled, and the correctness of this ruling presents the only question for our consideration. It is first contended by appellant that the assessment of the amount of recovery is too small, because it does not include attorney’s'fees and interest at the rate called for by the notes. The amount of recovery having been fixed by the oral contract, and the action having been commenced before the time fixed for settlement, no attorney’s fees could be recovered, for the reason that a contract to recover attorney’s fees is a contract of indemnity which is only effective in case of a breach on the part of the maker. St. Joseph County Sav. Bank v. Randall (1906), 37 Ind. App. 402, 76 N. E. 1012. In as much as the oral contract provided that there should be no interest except the $50 which the evidence shows had been paid before the commencement of the action, and since the judgment was rendered before the time fixed for settlement, no inter-est was collectable. It is urged by appellant that the court erred in the admission of certain evidence. Appellant’s brief does not disclose any ground of. objection to the admission of the evidence of which complaint is made. Therefore no question is presented for the determination of this court. Irvine v. Baxter Stove Co. (1919), 70 Ind. App. 105, 123 N. E. 185. — 216 — — 215 — A further contention of appellant is that the decision — 216 — of the trial court is contrary to law. The first among the reasons given is based upon the proposition that the obligation represented by the notes could not have been modified by a subsequent parol agreement. The case of Napier Iron Works v. Caldwell, etc., Iron Works (1915), 60 Ind. App. 317, 110 N. E. 714, which is cited and relied upon by appellant to support the proposition, is not in point. In that case it was held that the particular contract there under consideration was within the statute of frauds and was of such a character that it could not have been modified by parol. In the case at bar, the obligation represented by the notes is not, as assumed by appellant, a contract for the sale of lands. The contract for the sale of the real estate had been executed, and appellee under the contract had been placed in possession of the real estate, when the verbal agreement which affected only the notes for the balance of the purchase money was entered into by the parties. The obligation represented by the notes might have rested in parol as well as in writing, and was, before breach, subject to modification by parol agreement of the parties. Rigsbee v. Bowler (1861), 17 Ind. 167; Loomis v. Donovan (1861), 17 Ind. 198; Rhodes v. Thomas (1851), 2 Ind. 638; cases cited in note, Harris v. Murphy (1896), 119 N. C. 34, 56 Am. St. 662; Hubbell v. Ream (1871), 31 Iowa 289; Grace v. Lynch (1891), 80 Wis. 166, 49 N. W. 751. See also, Nonamaker v. Amos (1905), 73 Ohio St. 163, 76 N. E. 949, 112 Am. St. 708, 4 L. R. A. (N. S.) 980; 2 Page, Contracts §1348 ; 3 Elliott, Contracts §1988; 6 R. C. L. 914. If it be said that the mortgage given by appellee to secure the notes sued on was of necessity in writing, the answer is that the mortgage is not the debt, but only an incident thereof; and if the debt was modified, the mortgage must be held to have been modified to the same extent. Tennant v. Hulet (1917), — 217 — 65 Ind. App. 24, 116 N. E. 748; Gabbert v. Schwartz (1880), 69 Ind. 450. It is the theory of appellant, that in as much as appellee, before purchasing the real estate covered by the mortgage in suit, went upon the real estate and inspected it, he could not thereafter claim that he relied'upon, and was misled by, the representations of appellant; and that, therefore, the oral agreement to modify the obligation represented by the notes was without consideration.- It is not the law, as assumed by appellant, that every vendee who makes an inspection of real estate pending negotiations for its purchase is thereby, as a matter of law, precluded from a recovery by him for false representations as to the character and value of such real estate. Whether he is so precluded is usually a question of fact. Zimmerman v. Burchard-Hulburt, etc., Co. (1910), 111 Minn. 17, 126 N. W. 282; Rudolphi v. Wright (1913), 124 Minn. 24, 144 N. W. 430; Stonemets v. Head (1913), 248 Mo. 243, 154 S. W. 108; Ford v. Sims (Tex. Civ. App.) (1917), 190 S. W. 1165. See also Firebaugh v. Trough (1914), 57 Ind. App. 421, 107 N. E. 301. No good purpose would be served in setting out the evidence. It is sufficient to say that, under' the evidence as disclosed by the record, the question of fraud was one of fact which it was the right of appellee to have had submitted in the trial of an action for damages. The surrender by appellee of his right of action was sufficient consideration for the parol agreement to modify the obligation represented by the promissory notes. As to the authority of appellant’s husband to make the parol agreement, the evidence discloses that throughout their married life appellant’s husband had, with her knowledge and consent, “transacted all of her business matters,” and “had acted gen — 218 — erally as her business agent,” and with her knowledge and consent was so acting at the time appellee claims that the obligation represented by the purchase-money notes and mortgage was modified by the parol agreement. There was, therefore, evidence to sustain the finding of the trial court that appellant’s husband had authority to bind her by the oral contract of settlement. See Milhollin v. Milhollin (1919), 71 Ind. App. 477, 125 N. E. 217. The decision of the trial court is sustained by the evidence. Affirmed. Enloe, P. J., not participating.