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COA: Tractor sale contract not enforceable

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The Indiana Court of Appeals says it’s against public policy to uphold any civil contract that’s based on an illegal action, and so the court says it won’t create a rule allowing that transaction agreement to be enforced.

An 18-page ruling came May 19 in James S. Tracy v. Steve Morell, et al., No. 59A01-1009-PL-488, affirming in part and reversing in part an Orange County judge’s decision about a tractor transaction where the identification number appears to have been illegally removed.

This case involves a fraud and counter-claim stemming from the 2002 sale of a used Ford Holland farm tractor with an altered identification number, which James Tracy agreed to buy for $12,500 and set up payments on. Tracy paid $8,500, but stopped making payments in 2003 and left about $4,000 outstanding. A few months after that, prosecutors charged Steve Morrell with four counts of receiving stolen tractors and farm equipment. Tracy learned of the situation and contacted the Orange County Sheriff’s Office to inform them of the tractor he’d purchased and had been paying on. Police inspected the tractor and found the ID number had been illegally altered, but after impounding it they closed that investigation because of prohibitive costs in determining who might have owned the tractor. Morrell pleaded guilty to the pending felony stolen property counts that also involved altered numbers, but it didn’t involve Tracy’s tractor.

That led to Tracy’s fraud allegations, and a counter-claim by Morrell that Tracy had defaulted on the promissory note the two had exchanged as part of the sale. Following a bench trial, Circuit Judge James Blanton dismissed Tracy’s complaint with prejudice for failing to meet his burden of proof on fraud and concluded that he owed Morrell $4,000 because it was an enforceable contract.

On appeal, the three-judge appellate panel determined enough evidence existed for the trial judge to rule on the merits and that there was no reason why he should have dismissed Tracy’s claim. Though Judge Blanton didn’t err when he held Tracy failed to meet his burden of proof on the fraud claim, the appellate court found that the contract is unenforceable because of a mutual mistake of fact between the parties and the contract violates public policy.

Specifically, the appeals judges looked to Indiana Code 35-43-4-2.3 that made it a crime to deal in altered property. Even though the state abandoned its attempt to prove that Morrell had stolen the specific tractor at issue here and Tracy didn’t prove to the trial court’s satisfaction that a crime had been committed or that there had been a violation of the Crime Victim’s Relief Act, the court said that doesn’t end the inquiry about whether this contract is enforceable.

“The tractor’s identification number was destroyed, and we can think of no lawful reason why the number was ground down, filled in with putty and painted over,” Judge Edward Najam wrote. “Rather, the only purpose for concealing the true identity of the tractor was to move the property outside the stream of lawful commerce into a secondary or ‘black market.’ We decline to adopt a rule that someone may sell altered property with impunity and then claim ignorance as a complete defense in a civil action from the sale. Such a rule would violate public policy because in the sale of personal property, unless otherwise agreed, the seller’s ownership free and clear of liens and encumbrances is presumed. Here, the tractor was encumbered by an altered identification number. Whether or not a crime occurred, and whether or not statutory relief is available under the Crime Victim’s Relief Act, the law should not permit a seller to transfer property with an altered identification number without being held accountable for it.”

The appellate court ordered that Tracy has no further obligation on the promissory note and he’s entitled to a rescission of the tractor sale contract and monetary judgment in the amount he’d paid with interest.

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  1. A traditional parade of attorneys? Really Evansville? Y'all need to get out more. When is the traditional parade of notaries? Nurses? Sanitation workers? Pole dancers? I gotta wonder, do throngs of admiring citizens gather to laud these marching servants of the constitution? "Show us your billing records!!!" Hoping some video gets posted. Ours is not a narcissistic profession by any chance, is it? Nah .....

  2. My previous comment not an aside at court. I agree with smith. Good call. Just thought posting here a bit on the if it bleeds it leads side. Most attorneys need to think of last lines of story above.

  3. Hello everyone I'm Gina and I'm here for the exact same thing you are. I have the wonderful joy of waking up every morning to my heart being pulled out and sheer terror of what DCS is going to Throw at me and my family today.Let me start from the !bebeginning.My daughter lost all rights to her 3beautiful children due to Severe mental issues she no longer lives in our state and has cut all ties.DCS led her to belive that once she done signed over her right the babies would be with their family. We have faught screamed begged and anything else we could possibly due I hired a lawyer five grand down the drain.You know all I want is my babies home.I've done everything they have even asked me to do.Now their saying I can't see my grandchildren cause I'M on a prescription for paipain.I have a very rare blood disease it causes cellulitis a form of blood poisoning to stay dormant in my tissues and nervous system it also causes a ,blood clotting disorder.even with the two blood thinners I'm on I still Continue to develop them them also.DCS knows about my illness and still they refuse to let me see my grandchildren. I Love and miss them so much Please can anyone help Us my grandchildren and I they should be worrying about what toy there going to play with but instead there worrying about if there ever coming home again.THANK YOU DCS FOR ALL YOU'VE DONE. ( And if anyone at all has any ideals or knows who can help. Please contact (765)960~5096.only serious callers

  4. He must be a Rethuglican, for if from the other side of the aisle such acts would be merely personal and thus not something that attaches to his professional life. AND ... gotta love this ... oh, and on top of talking dirty on the phone, he also, as an aside, guess we should mention, might be important, not sure, but .... "In addition to these allegations, Keaton was accused of failing to file an appeal after he collected advance payment from a client seeking to challenge a ruling that the client repay benefits because of unreported income." rimshot

  5. I am not a fan of some of the 8.4 discipline we have seen for private conduct-- but this was so egregious and abusive and had so many points of bad conduct relates to the law and the lawyer's status as a lawyer that it is clearly a proper and just disbarment. A truly despicable account of bad acts showing unfit character to practice law. I applaud the outcome.

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