ILNews

COA: Tractor sale contract not enforceable

Back to TopCommentsE-mailPrintBookmark and Share

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.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. First comment on this thread is a fitting final comment on this thread, as that the MCBA never answered Duncan's fine question, and now even Eric Holder agrees that the MCBA was in material error as to the facts: "I don't get it" from Duncan December 1, 2014 5:10 PM "The Grand Jury met for 25 days and heard 70 hours of testimony according to this article and they made a decision that no crime occurred. On what basis does the MCBA conclude that their decision was "unjust"? What special knowledge or evidence does the MCBA have that the Grand Jury hearing this matter was unaware of? The system that we as lawyers are sworn to uphold made a decision that there was insufficient proof that officer committed a crime. How can any of us say we know better what was right than the jury that actually heard all of the the evidence in this case."

  2. wow is this a bunch of bs! i know the facts!

  3. MCBA .... time for a new release about your entire membership (or is it just the alter ego) being "saddened and disappointed" in the failure to lynch a police officer protecting himself in the line of duty. But this time against Eric Holder and the Federal Bureau of Investigation: "WASHINGTON — Justice Department lawyers will recommend that no civil rights charges be brought against the police officer who fatally shot an unarmed teenager in Ferguson, Mo., after an F.B.I. investigation found no evidence to support charges, law enforcement officials said Wednesday." http://www.nytimes.com/2015/01/22/us/justice-department-ferguson-civil-rights-darren-wilson.html?ref=us&_r=0

  4. Dr wail asfour lives 3 hours from the hospital,where if he gets an emergency at least he needs three hours,while even if he is on call he should be in a location where it gives him max 10 minutes to be beside the patient,they get paid double on their on call days ,where look how they handle it,so if the death of the patient occurs on weekend and these doctors still repeat same pattern such issue should be raised,they should be closer to the patient.on other hand if all the death occured on the absence of the Dr and the nurses handle it,the nurses should get trained how to function appearntly they not that good,if the Dr lives 3 hours far from the hospital on his call days he should sleep in the hospital

  5. It's a capital offense...one for you Latin scholars..

ADVERTISEMENT