Summary
In Sickels, the plaintiffs initially sought rescission of a real estate purchase agreement and return of the purchase price.
Summary of this case from Cahoon v. CummingsOpinion
No. 27,692.
Filed June 2, 1942. Rehearing denied September 28, 1942.
1. CONTRACTS — Fraud in Execution — Remedies of Injured Party. — Where a contract has been induced by fraud, the injured party may either affirm the contract and sue for damages occasioned by the fraud, or he may disaffirm it and sue to recover the compensation paid, but he cannot maintain both of the actions simultaneously in the same paragraph of complaint. p. 351.
2. PLEADING — Theory — Necessity for Adopting — Determination by Court in Cases of Doubt. — Under the code it is necessary for a pleader to adopt and conform to some definite theory, and if doubt exists as to what the theory is, the court will determine it from the general scope and tenor of the pleading. p. 351.
3. ELECTION OF REMEDIES — Plaintiff Required to Elect Theory of Action — Amendment Denied — Action of Court Not Reversible Error. — In an action to recover damages occasioned by fraud in inducing plaintiffs to enter into a contract for the purchase of real estate, and to recover the compensation paid under the contract, no reversible error was committed by the court in requiring plaintiffs to elect the theory upon which they would rely and in holding them to their choice by refusing them leave to amend their election after the case had proceeded to trial. p. 351.
4. TRIAL — Directed Verdict — Evidence Insufficient to Establish Liability on Part of Defendants — Action of Court Proper. — Where, in an action to disaffirm an alleged fraudulent contract and to recover the consideration paid thereunder, there was no showing that two of the defendants had any part in or knowledge of the negotiations that resulted in the contract, and the connection of another of the defendants with the transaction was wholly undisclosed, and the evidence was insufficient to connect a corporate defendant with an alleged conspiracy to defraud plaintiffs by the contract, it was not reversible error to direct a verdict for those defendants. p. 352.
5. APPEAL — Briefs — Appellees Failing to File — Confession of Error as to Parties Not Filing Brief on Merits. — Where appellants' brief was sufficient to make out a prima facie case of error on the part of the trial court in setting aside an order of the court from which the venue was changed overruling a motion for a new trial of the issue formed on an amended plea in abatement, and in sustaining the plea in abatement as to certain appellees, the failure of those appellees to file a brief on the merits of the appeal was treated as a confession of error by them. p. 353.
From the Morgan Circuit Court; Omar O'Harrow, Judge.
Action by Anna Sickels and others against Aetna Securities Company and others to recover an amount paid by plaintiffs on the purchase price of certain real estate. From a judgment for defendants, plaintiffs appealed. (Transferred from the Appellate Court under § 4-218, Burns' 1933, § 1359, note, Baldwin's 1934.)
Affirmed in part and reversed in part.
Homer Elliott, of Martinsville, McTurnan Higgins, Lawrence H. Hind, and James P. Robinson, all of Indianapolis, for appellants.
Charles H. Foley, of Martinsville, James A. Ross, and Noel Armstrong, all of Indianapolis ( Matson, Ross, McCord Ice, of Indianapolis, of counsel), for appellees.
This action was instituted by the appellants in the Superior Court of Marion County. The appellees joined in an amended plea in abatement alleging that all of them were nonresidents of Marion County except the Indianapolis Life Insurance Company and that it had no connection with the subject-matter of the action but had been made a party defendant for the sole purpose of conferring jurisdiction on the Marion county court. After hearing evidence the court overruled the amended plea in abatement and a motion for a new trial of the issue formed thereon. The venue of the action was, thereupon, changed to the Morgan Circuit Court.
Before the submission of the cause for trial the appellee Indianapolis Life Insurance Company moved to require the appellants to elect upon which of the theories stated in the single paragraph of their amended complaint they would rely. The court sustained the motion and the appellants elected "to proceed upon the theory of rescission of the contracts described in the complaint and a recovery of the consideration paid." While the first witness was on the stand, the appellants asked leave to modify their said election as follows: "Recovery of consideration as used in the language of the election is and shall be taken to mean recovery of damages for the wrongful acts constituting and causing plaintiffs' loss." The motion to modify the election was denied and the court proceeded with the trial. At the conclusion of the appellants' evidence a verdict was directed in favor of the appellees Ora L. Wildermuth, Fred O. Wildermuth, Xen McNair Inc., and Indianapolis Life Insurance Company. The submission of the cause was then set aside and a new trial granted on the issue formed on the amended plea in abatement which had previously been denied by the Superior Court of Marion County. Then applying the evidence heard on the principal trial, the court abated the action as to the remaining defendants Aetna Securities Company and Xen L. McNair. There was judgment that the appellants take nothing, a motion for a new trial was subsequently denied, and this appeal followed.
The propositions which we have been asked to consider are involved, multifarious, and confusing. The motion for a new trial alone recited 99 alleged errors when one, concisely stated and supported by sound reasoning, would have been sufficient to accomplish a reversal. To adequately discuss all of the questions attempted to be presented would require an opinion longer than the appellants' 340-page brief. We have, therefore, felt obliged to summarize in our own way and without regard to the manner of presentation what we perceive to be the substantial questions. These are: (1) Whether reversible error was committed in requiring the appellants to elect the theory upon which they would rely and in refusing them leave to amend the election made; (2) whether the trial court erred in directing a verdict in favor of the appellees Ora L. Wildermuth, Fred O. Wildermuth, Xen McNair Inc., and Indianapolis Life Insurance Company; and (3) whether the Morgan Circuit Court had power to grant a new trial on the issue formed on the appellees' amended plea in abatement which had been denied by the Superior Court of Marion County before the change of venue, and whether error was committed in abating the action as to the appellees Aetna Securities Company and Xen L. McNair. These matters will be considered in the order stated.
When a contract has been induced by fraud, the injured party may pursue one of two remedies. He may affirm the contract and sue for damages occasioned by the fraud or he may 1-3. disaffirm the contract and sue to recover the compensation paid. He cannot maintain both of these actions simultaneously in the same paragraph of complaint. Under our code it is necessary for a pleader to adopt and conform to some definite theory. If doubt exists as to what the theory is, the court will determine it from the general scope and tenor of the pleading. These rules are too well known to justify the citation of authorities. In the case at bar the appellants sought to maintain both of these conflicting theories in the same paragraph of their amended complaint. By forced election they chose to proceed upon the theory of a rescission of the contracts. Their subsequent attempt to amend their election was a second effort to assert inconsistent theories. No reversible error was committed in requiring the appellants to make their election or in holding them to their choice.
Whether the trial court erred in directing a verdict for the appellees Ora L. Wildermuth, Fred O. Wildermuth, Xen McNair Inc., and Indianapolis Life Insurance Company requires a further notice of the amended complaint and a consideration of the evidence. It was alleged that the appellee Aetna Securities Company owned an extensive tract of platted real estate in Lake County, Indiana, which had only a speculative value and for which there was no substantial market; and that the appellants were aged, trusting, and inexperienced in business, all of which was known to the appellees. It was charged that the appellees entered into a conspiracy to defraud the appellants by false representations; that pursuant to said design the appellees falsely and fraudulently represented to the appellants that said real estate was readily salable and rapidly advancing in value and thereby induced the appellants to contract to purchase the same for $100,000 and to apply all of their assets amounting to $35,667.50 on said purchase price; and that the appellees well knew that the appellants had no funds in hand or in prospect with which to meet said deferred payments and represented that they could and would resell said real estate for the appellants for a handsome profit before such payments would become due. The amended complaint further charged that when the appellants learned that they had been defrauded they rescinded their contracts and tendered them back, and it concluded with a prayer for judgment for the sum paid to the appellees with interest.
There was evidence that the title to the real estate here involved was in the Aetna Securities Company and that the Indianapolis Life Insurance Company had a mortgage on it 4. and other property for $135,000. Xen L. McNair was president and Ora L. Wildermuth, secretary, of the Aetna Securities Company, and McNair was also president of Xen McNair Inc. There was no showing that Ora L. Wildermuth or Fred O. Wildermuth had any part in or knowledge of the negotiations that resulted in the contract with the appellants. The connection of Xen McNair Inc. with the transaction is wholly undisclosed. One of the appellants testified that she talked with the president of the Indianapolis Life Insurance Company over the telephone and that he advised her that it was all right for them to go to Gary to see the property. This circumstance was insufficient to connect the insurance company with the alleged conspiracy. Xen L. McNair appears to have been the agent of the securities company for the sale of the real estate on a commission basis, and all of the representations complained of were made by him or by Irvin Duncan, who was in his employ. It must be concluded that there was a total lack of proof that the appellees Ora L. Wildermuth, Fred O. Wildermuth, Xen McNair Inc. or Indianapolis Life Insurance Company were parties to any conspiracy to defraud the appellants or that any one of them made fraudulent representations to the appellants. We find no error in the action of the trial court in directing a verdict in favor of these appellees.
The appellants' brief is sufficient to make out a prima facie case of error on the part of the trial court in setting aside the order of the Superior Court of Marion County overruling the 5. motion for a new trial of the issue formed on the amended plea in abatement, and in sustaining said plea in abatement as to the appellees Aetna Securities Company and Xen L. McNair. The failure of the last named appellees to file a brief on the merits of this appeal will, therefore, be treated as a confession of error by them.
The judgment is affirmed as to the appellees Indianapolis Life Insurance Company, Xen McNair Inc., Ora L. Wildermuth, and Fred O. Wildermuth and reversed as to the appellees Aetna Securities Company and Xen L. McNair. The Morgan Circuit Court will set aside its order granting a new trial on the issue formed on the amended plea in abatement and its judgment abating the action and will sustain the appellants' motion for a new trial as to the appellees Aetna Securities Company and Xen L. McNair.
NOTE. — Reported in 41 N.E.2d 947.