Case Name: Koons v. Ferguson
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1865-11
Citations: 25 Ind. 388
Docket Number: 
Parties: Koons v. Ferguson.
Judges: 
Reporter: Indiana Reports
Volume: 25
Pages: 388–392

Head Matter:
Koons v. Ferguson.
Vendor and Purchaser. — Escrow.—A, being a prisoner in the hands of the rebels at Andersonville, wrote to his wife authorizing her to sell a tract of land he owned in Indiana. The wife, as agent of her husband, executed a written contract with B and C, by which she agreed to sell the land to them for a stipulated price. At the time the agreement was made, it was understood that the land should be sold by the sheriff on a judgment then existing against A, and should be bought in by B and C, in order to vest the title in them. Subsequently B sold and assigned the contract to D for $500, of which sum $200 was paid in hand, B agreeing to procure any further assignment that was necessary. The agreement, with the assignment indorsed, was placed in the hands of a third person, as to the assignment, as an escrow, until the payment of the residue of the price. Before the making of the assignment the judgment against A had been set aside, though this fact was not known to either of the parties. Suit by D to recover the $200 paid by him on the contract. B filed a counter-claim asking judgment for $300, the balance due from D on the contract of assignment.
Held, that the 'assignment, having been delivered as an escrow, remained a mere scroll, and not a consummated contract, until the happening of the condition.
Meld, also, that in the absence of evidence, the presumption is that C was entitled to an undivided one-half of the equity created by the contract, and B was not entitled to recover the balance due from D without tendering the further assignment of C, or showing that he had no interest.
Meld, also, that as the existence of the judgment against A, by means of which the title might be vested in the purchaser, was an important consideration in the contract, it was a case of mutual mistake, and X) was entitled to rescind and to recover the $200 paid on the contract.
APPEAL from tbe Morgan Circuit Court.

Opinion:
Gregory, J.
Koons sued Ferguson in tbe court below to recover back money paid by tbe former to tbe latter on a contract of assignment of an executory contract for tbe conveyance of land, executed by James L. Roberts and wife to tbe latter.
Tbe defendant answered, 1st. General denial. 2d. By way of counter-claim, tbat be purchased of Roberts tbe lands embraced in tbe executory contract of sale mentioned and set forth in tbe complaint; tbat, at tbe time of tbe purchase, Roberts, by his agent, entered into the contract; that by a bona fide contract, and without fraud, he sold the contract of purchase to the plaintiff; that, by the terms of the contract, the plaintiff' was to be entitled to all the rights and benefits that the defendant had in the contract, and was to assume all the obligations and discharge all the conditions thereof, and was, in addition thereto, to pay the defendant $500; that the plaintiff' paid the defendant $200, and promised to pay in five days thereafter the further sum of $300; that the defendant assigned the contract, by indorsement, to the plaintiff, and that the plaintiff had failed to pay the $300. Prayer for judgment. A demurrer was overruled to the 2d paragraph of the answer.
The plaintiff replied, 1st. By general denial. 2d. A special reply which is not necessary to be noticed, as the same question arises on the motion for a new trial. Trial by the court; finding for the defendant for $300 ; motion for a new trial overruled. The evidence is in the récord.
The facts are, that James T. Roberts was the owner in fee of the land; that he was a prisoner in the hands of the rebels at Andei'sonville; that, at the May term, 1864, of the Morgan Circuit Court, one Williams obtained a judgment against him for some $1,500; that he wrote to his wife to sell the land and pay the judgment; that the wife, for herself and as agent for her husband, on the 5th of November, 1864, executed the contract to the Fergusons, in which it is agreed that James T. Roberts and Rachel Roberts have bargained and sold to John W. Ferguson and Stephen R. Ferguson the land, describing it, containing 198 and 12-100 acres, more or less, for the sum of $5,000, upon the following terms, to-wit: $1,500 on the 1st of January, 1865, or when said Roberts makes, or causes to be made, to said Fergusons a deed of conveyance for the land; $1,500 on the 1st of January, 1866; $1,000 on the 1st of January, 1867, and the residue on the 1st of January, 1868, for which several sums, except the first payment, notes, and a mortgage on the land to secure the payment thereof, were to be executed by the Fergusons to Roberts, waiving relief laws, when the deed was executed. Roberts was to deliver the possession of the premises to the Fergusons on or before the 25th of December, 1864, and the Fergusons were to have the wheat then growing on the premises. At the time this agreement was made it was understood between the Fergusons and Mrs. Roberts that as, in consequence of Roberts being a prisoner in the hands of the rebels, at Andersonville, a deed could not readily be procured from him, the land was to be sold at sheriff's sale on the Williams judgment and purchased in by the Fergusons. On the 12th of November, 1864, John W. Ferguson sold this agreement to the appellant for $500, and indorsed thereon, "I assign the within contract to George Koons, (signed,) John W. Ferguson," and agreed to procure any further assignment which might be necessary. The plaintiff at the time paid $200, and agreed to pay the $300 in a few'days. The agreement, with the indorsement, was placed in the hands of John Williams, as to the assignment, as an escrow, to be delivered to the plaintiff* on the payment of the $300. At the time of the agreement between the plaintiff* and defendant they both understood that Roberts was a prisoner, and that the title was expected to be made through the sheriff's sale on the Williams judgment. At the November term, 1864, of the Morgan Circuit Court, and before the contract between thej>laintiff* and defendant, the Williams judgment was set aside and a new trial granted. The j udgment was regular on its face, and neither the plaintiff nor defendant knew at the time of this contract that it had been set aside. Koons went to Martinsville the next day and learned that the judgment had been set aside, and was advised by counsel that the contract executed by Mrs." Roberts, for herself and husband, was void. He then refused to pay the $300, and on the 15th of April, 1865, and before the' commencement of this suit, put upon the back of the agreement of Roberts and wife to the defendant, a re-assignment to John W. Ferguson, and demanded of him the $200 paid. Boberts died in prison in February, 1865. His widow and children remained in the possession of the land, and, on demand, refused to deliver possession to Koons. The latter never got anything under his contract.
The agreement of Boberts and wife with the Fergusons, with the indorsement of John W. Ferguson, was placed in the hands of Williams, as to the assignment, as an escrow. Until the performance of the condition it remained a mere scroll in writing, of no more efficacy than any other written scroll. 2 Washburn on Real Property, 2d ed., § 44, p. 614, and authorities there cited. The defendant elected not to trust the plaintiff with a consummated contract. The remedy of the former for a failure to comply with the condition is, that the agreement, with the -indorsement, shall not be delivered to the latter.
The agreement was to convey to John W. Ferguson and Stephen B. Ferguson. There was no evidence in the record to explain why it was that John W. alone made the assignment. In the absence of proof, the presumption is that Stephen B. is entitled to an undivided half of the equity created by the agreement. We think the defendant had no right to recover from the plaintiff without tendering the further assignment of Stephen B., or showing that he had no interest.
But the most difficult question in the case in judgment is this: Has the plaintiff a right to recover back from the defendant the $200 paid by the former to- the latter? The agreement between the plaintiff and defendant was still in parol, the writing was not yet consummated, an important element which induced the plaintiff' to become a-party to the inchoate act was the existence of the Williams judgment, by means of which the title in the vendee could be perfected in the absence of Boberts. It is a case, in our opinion, of a mutual mistake of fact, in the absence of which the contract would not have been. made. In such a case the party injured may rescind. We think the facts show a right in the plaintiff to recover of the defendant the $200 paid by the foi'mer to the latter. The court below erred in overruling the motion for a new trial.
W. R. Harrison and W. 8. Shirley, for appellant.
G. F. McNutt and A. Ennis, for appellee.
The judgment is reversed, with costs, and the cause remanded to said court, with directions to grant a- new trial, and for further proceedings.