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(162 N.E.)

contend that, inasmuch as the note in suit was a joint obligation by all parties thereto, the rule should govern that, where one joint obligor is released from payment, all the parties, whether as principals or sureties, are thereby released. We concede that such is the rule generally, but there are exceptions to this rule. The rule is aptly stated in Winn v. Sanford, 145 Mass. 302, 14 N. E. 119, 1 Am. St. Rep. 461, where the court said:

"Where one becomes a surety for the performance of a promise made by a person incompetent to contract, his contract is not purely accessorial, nor is his liability necessarily ascertained by determining whether the principal can be made liable. Fraud, deceit in inducing the principal to make his promise, or illegality thereof, all of which would release the principal, would release the surety, as these affect the character of the debt; but incapacity of the principal party promising to make a legal contract, if understood by the parties, is the very defense on the part of the principal against which the surety assures the promisee."

In Britton v. Wheeler, 8 Blackf. 31, the court, in speaking of the exception to the rule, said:

"The law is, that in actions ex contractu, a nol. pros. cannot be entered as to one defendant and the suit prosecuted against the others, until after such defendant shall have severed in pleading, and pleaded matter going to his personal discharge."

a purely personal defense, in the nature of a privilege or protection, [such] as infancy or coverture, then the surety is not released, but the contract subsists as against him in full force. In such a case the disability of the prin

cipal may be the very reason why the surety

was required and consented to become bound."

[2] In the case at bar, when the principal, Clyde McKee, exercised his right to rescind the contract by pleading infancy, said plea was personal to him only, and did not have the effect of releasing his sureties. court did not err in overruling the motion for a new trial. Affirmed.

The

WISCONSIN LUMBER & COAL Co. v.
WALL et al. (No. 13163.)

Appellate Court of Indiana, in Banc. June 20,
1928.

1. New trial 2-No basis for motion for new trial was afforded by judgment for costs on voluntary dismissal of cross-complaint; other issues having been tried.

Where trial was had and appeal dismissed on account of issues under cross-complaint remaining undetermined, subsequent action of court in noting voluntary dismissal of cross-complaint and rendering judgment against cross-complainant for costs did not constitute a trial so as to afford basis for motion for new trial.

In Kirby et al. v. Cannon, 9 Ind. 371, the 2. Appeal and error 345 (1)—Appeal time

court said:

"It may be observed, however, that in a suit against two upon contract, if one plead infancy, and be an infant, the plaintiff may nol. pros. as to him, and proceed to judgment as to the other.

The reason is, that the infant is not liable as a joint contractor. He need not have been sued in the first place. It would seem to follow, for the same reason, that a release of the infant, he not being liable as a joint contractor, would not release the adult."

The same rule applies where a married woman pleads coverture. In Davis et al. v. Statts, 43 Ind. 103, 13 Am. Rep. 382, the court said:

"This case presents the sole and only question as to whether the sureties of a married woman, who is not herself liable, on a promissory note, are liable to the payee, all parties, payee, principal, and sureties, knowing that the principal was not liable. We hold that the sureties are liable on such note, where there is no fraud, duress, deceit, violation of law or public policy, on the part of the payee, in procuring said note."

was not extended by motion for new trial after judgment on voluntary dismissal of crosscomplaint; other issues being determined.

Where trial was had and appeal dismissed on ground that issues under cross-complaint remained undetermined, and subsequently the cross-complainant voluntarily dismissed its cross-complaint, and court rendered judgment against it for costs, time for appeal ran from the entry of such judgment, and was not extended by the filing of a motion for a new trial and the striking thereof, since the proceedings on dismissal of the cross-complaint did not constitute a trial.

Appeal from Superior Court, Lake County; Virgil S. Reiter, Judge.

Action by the Wisconsin Lumber & Coal Company against Frank G. Wall and others, in which the American State Bank filed a cross-complaint. From the final judgment, plaintiff appeals. Appeal dismissed.

Fred Barnett, of Hammond, and John D. Kennedy, of East Chicago, for appellant. Ibach, Gavit, Stinson, & Gavit, of HamJesse Wilson, of Hammond, for appellees.

In Kyger v. Sipe, 89 Va. 507, 16 S. E. 627, mond, Abe Ottenheimer, of East Chicago, and the court said:

"The general rule is invoked that where there is no principal there can be no surety. But to this rule there are exceptions, one of which is that if the principal is not liable by reason of

ENLOE, P. J. This is the second attempted appeal of this case. On the former attempted appeal, the cause was dismissed for want of

For other caser see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

jurisdiction; it appearing that the cause had not been fully disposed of. See 84 Ind. App. 642, 151 N. E. 830. After said appeal had been dismissed the American State Bankthe party as to whom the issues remained undetermined at the time of said attempted appeal-dismissed its cross-complaint, and a judgment for costs was rendered against it on March 31, 1927, thus disposing of all of

herein was not filed until October 14, 1927, it was filed too late, and we have no jurisdiction hereof. The appeal is dismissed.

DAUSMAN, J., absent.

LOR et al. (No. 12964.)

Appellate Court of Indiana, in Banc. June 22,

1928.

the issues as to all parties. April 11, 1927, STATE ex rel. J. B. SPEED & CO. v. TRAY. this appellant filed its motion for a new trial. This motion was, upon motion of counsel for the appellees, stricken from the files on June 16, 1927, and thereupon an appeal was prayed to this court, and time was give within which to file the appeal bond, the amount thereof being fixed and the surety thereon named and approved; time was also given within which to file bill of exceptions. The bond was filed within the time given, and the transcript was filed in this court October 14, 1927.

The record discloses that this cause had been tried by the court and the finding made on November 24, 1924, and that upon the same day, a judgment was rendered, and all matters disposed of, except as to the crosscomplaint of the American State Bank hereinbefore referred to. Thereafter, on December 17, 1924, the appellant filed its motion for a new trial, and therein challenged the sufficiency of the evidence, that the decision was contrary to law, and alleged error in the matter of evidence. This motion was overruled December 29, 1924, and all preliminary steps for the perfecting of an appeal were taken. An appeal was attempted with the result before noted.

[1, 2] It will be noted that the only trial of this cause which was ever had was in November, 1924; that, since the dismissal of the former appeal, the only action taken by the court was the noting of the dismissal of the cross-complaint of the American State Bank and the rendition of a judgment against said bank for costs accruing on said cross-complaint. These proceedings were in no proper sense a "trial." As said in the case of Orr v. State (Ind. Sup.) 161 N. E. 269, there was nothing in this last action of the court upon which to base a motion for a new trial. The

trial of this case had been had in November,

1924; the action of the court in that trial had been duly challenged and the record preserved so that all that remained thereafter by appellant to be done was the perfecting of his appeal according to law, and presenting upon such appeal a proper record presenting the errors relied upon. This he had a right to do at any time within 180 days from March 31, 1927. The filing of the so-called motion for a new trial and the ruling thereon, under the facts of this case, did not extend said time.

1. Highways 113(5)—Price of goods sold to contractors but not used in construction of highway is not within bond.

Purchase price of goods sold to highway contractors but not used in the construction of the highway was not within contractors' bond.

2. Payment 16(1)-Acceptance of note for price of goods sold highway contractor constituted payment.

Acceptance of notes for goods sold to highway contractors, only small part of which would have been protected by contractors' bond, constituted payment of the debt.

3. Novation 5-Partners' organization of corporation and assumption of existing debts held to effect novation.

Where partners organized a corporation which with knowledge of a creditor assumed the liabilities of the partnership and such creditor continued to sell goods to the corporation, there was a novation.

4. Corporations 657(3)-Contract of foreign corporation doing business within state without compliance with statutes held void (Burns' Ann. St. 1926, § 4909 et seq.).

Foreign corporation's contract for sale of road building material to contractors within state, furnished from plant operated by such foreign corporation within state without corporation's compliance with Acts 1907, c. 176 (Burns' Ann. St. 1926, § 4909 et seq.), describing conditions to right of foreign corporation to transact business within state, held void. 5. Corporations 672(4)—Invalidity of foreign corporation's contract held available in court of state under plea in bar (Burns' Ann. St. 1926, § 4909 et seq.).

poration's noncompliance with Acts 1907, c. 176 (Burns' Ann. St. 1926, § 4909 et seq.), describing conditions entitling foreign corporation to do business within state, held not enforceable in court of state, though question was presented by plea in bar instead of plea in abatement.

Foreign corporation's contract, void for cor

Appeal from Gibson Circuit Court; Claude J. Smith, Judge.

Action by the State, on the relation of J. B. Speed & Co., against Edgar Traylor and others. Judgment for defendants, and re

It therefore follows that, as the record lator appeals. Affirmed.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(162 N.E.)

James T. Walker and Henry B. Walker, both of Evansville, and Lawrence S. Poston, of Louisville, Ky., for appellant.

Joseph H. Iglehart, Albert W. Funkhouser, Arthur F. Funkhouser, and Robert D. Markel, all of Evansville, for appellees.

NICHOLS, O. J. [1-3] This is the second appeal of this case, the first appeal being from a judgment for appellee on issues formed by the complaint and answers in denial and payment. See State ex rel. v. Traylor, 77 Ind. App. 419, 132 N. E. 608. After reversal the case was returned to Vanderburg county, from which it was appealed, and from there transferred on change of venue to Gibson county. Appellees filed, in addition to the first two paragraphs of answer, which formed the issues at the first trial, their third, fourth, fifth, sixth, and seventh paragraphs of answer. The fourth paragraph was stricken out on motion. The third paragraph alleged a failure to comply with foreign corporation law of Indiana, and the fifth, sixth, and seventh paragraphs alleged novation. These paragraphs and the evidence pertaining thereto, together with the additional evidence as to payment, present questions on this appeal that were not presented on the former appeal. Novation was not pleaded in the first trial, and such failure to make such plea was mentioned by the court in its opinion. While payment was relied upon by appellees at the first trial, it was solely on the theory that the delivery and acceptance of promissory notes constituted payment of the pre-existing debt which was secured by the bond involved. On appeal the court held that where, by accepting the notes in lieu of a pre-existing debt, the creditor would be giving up a valuable security, as the bond in this case, there would be no presumption that the delivery and acceptance of the notes constituted payment. Appellees made no effort to prove subsequent payments thereon nor to prove failure to give proper credit for such payments, nor was there any proof, as to the second trial, that a substantial part, practically all of the debt for which the notes were accepted by the appellant, was for other roads not connected in any way with the road here involved, and for goods sold by appellant to Krempp and Traylor on open account to be resold by them in separate business transactions, such goods not being used in the construction of the highway here involved and the purchase price therefor, of course, not secured by the bond in suit. Under such circumstances the court at the second trial properly held that the promissory notes taken, governed by the law merchant as they were, constituted payment of the pre-existing debt, only a small part of which, as aforesaid, would have been secured by the bond in suit. State ex rel. v. Hullihan (Ind. App.) 157 N. E. 282. Because of the view that we take of this case, as hereinafter expressed, upon the issue presented by the

162 N.E.-5

*

*

third paragraph of answer, we deem it unnecessary to enter into an extended discussion of the question of novation. It is sufficient for us to say that from all of the evidence presented under this issue the court was fully justified in finding, as it did by its general finding, that there was a complete novation. The contract price for the construction of the improvements here involved was $25,898. Of all of the material furnished for such improvement, appellant furnished material amounting to less than $200 to the partnership with which the contract was made. The bond supporting such contract was conditioned that Traylor and Krempp (the partnership) "shall promptly enter into a contract with said board of commissioners for said work, and shall promptly pay all debts incurred by them in the prosecution of said work. * After furnishing the small amount of material mentioned above to the partnership, the corporation was formed under the name of Traylor and Krempp Company, and all of the assets of said partnership were turned over to said corporation and it assumed the liabilities of the partnership. Appellant was fully informed as to this transaction, and thereafter delivered material to the corporation not only for the construction of the improvement here involved, but for other improvements not involved in this transaction, and for material which was resold to the general trade. Krempp sold his stock in such corporation to Traylor and thereafter passed out of the deal. Appellant had knowledge of this fact and thereafter dealt with the corporation, from time to time made settlements with it, and accepted promissory notes executed by the corporation, and the dealings by appellant after the organization of the corporation were with it and not with the partnership. On such facts as these, as briefly stated, the court found by its general finding that there was a novation.

[4] But aside from the foregoing conclusions, under the averments of the third paragraph of appellant's answer, which, "as aforesaid," was filed since the former appeal, it is apparent that appellant cannot prevail in this action. It is averred therein that appellant was, at all times involved, a corporation organized and existing under the laws of the state of Kentucky, and engaged in the manufacture and preparing for sale, and of selling, stone, screenings, and cement; that it operated a plant at Milltown, Indiana, from which it furnished all of the stone and stone screenings used in the construction of the improvement involved, and that such material was delivered on board cars at Milltown, Ind., transported therefrom in the state, and used by Traylor and Krempp in the state, and that it was so understood between the parties that such material would be furnished from said plant at Milltown; that the contract for the sale of such material was executed within the state; and that appellant had been engaged

in business in Indiana for more than a year prior to May 1, 1916. It is then averred that appellant at no time prior to the institution of this action in any manner attempted or purported to comply with any of the provisions of the statute enacted by the General assembly of Indiana in 1907, regulating foreign corporations transacting business in the state. Acts 1907, c. 176, pp. 286 to 290, inclusive, being section 4909, Burns' 1926 et seq. Section 1 of such act expressly provides that:

We are constrained to hold that appellant being a foreign corporation, its contract made without compliance with the foreign corporation act is void; that it is not entitled to the protection of the courts of the state; and that such question is properly presented by a plea in bar.

The judgment is affirmed.

DAUSMAN, J., absent.

CONTINENTAL LIFE INS. CO. v. ARCHIBALD. (No. 13021.)

"Before any foreign corporation for profit shall be permitted or allowed to transact business or exercise any of its corporate powers in the state of Indiana, * they shall be required to comply with the provisions of this act and shall be subject to all the regulations prescribed herein, as well as all other regulations, limitations and restrictions applying to Appellate Court of Indiana, in Banc. March 30, corporations of like character organized under the laws of this state."

In the following sections are found the provisions with which appellant had not complied, one of which makes noncompliance a misdemeanor. Appellant's contract in violation of such act is void. This question was fully considered in case of United States Construction Co. v. Hamilton National Bank, 73 Ind. 149, 126 N. E. 866, where it was held that a contract in violation of the act was un

1928.

1. Insurance 635-Complaint in action under accident insurance policy held demurrable in not showing that insured's injury came within provisions of policy.

Complaint in action on accident insurance policy insuring against injury by wrecking or disablement of vehicle in which insured is riding or driving held bad as against demurrer, where it did not contain averments showing that plaintiff was injured by wrecking or disablement of vehicle in which she was riding.

lawful, and that it was not entitled to the 2. Appeal and error 1040 (10)-Error in

protection of the courts of the state. Nothing can be gained in repeating further what was said on this question in that case. On its authority we hold that appellant's contract, made without conforming to the provisions of such foreign corporation statute, was void and that its provision cannot be enforced in the courts of this state.

[5] Appellant contends that the question should have been presented by plea in abatement instead of by plea in bar, and that, being pleaded in bar, appellees have thereby waived their rights in abatement; but this contention cannot prevail. It is true that in the case of Lowenmeyer v. National Lumber Co., 71 Ind. App. 458, 125 N. E. 67, the defense based on the foreign corporation act was pleaded in abatement and a judgment abating the action was affirmed, but there was no discussion by the court as to whether the action should have been in bar and the question was in no way considered. The court, however, stated that:

"It is well settled in this state that, where a foreign corporation has failed to comply with a statute giving it a right to transact business in this state, and becomes insolvent, a receiver or trustee appointed to administer its affairs cannot maintain an action brought in this state on a claim arising therein; and that, where such corporation reaches a state that prevents a compliance with such statute, the facts with reference to its noncompliance and condition may be pleaded in bar to the action." (Our italics.)

overruling demurrer to complaint in action on accident policy held harmless, where uncontradicted evidence showed that injury was covered by policy.

Error in overruling demurrer to complaint in action on accident insurance policy because not showing facts bringing insured's injury within terms of policy held harmless, where defendant went to trial before a jury and it appeared by uncontradicted evidence that insured's injury came under terms of policy entitling her to recover.

3. Appeal and error 1026-Appellate Court must affirm regardless of erroneous ruling, where it affirmatively appears that ruling did not prejudice adverse party.

If it affirmatively appears by the whole record that an erroneous ruling did not prejudice the adverse party and that the cause was fairly tried and determined upon the merits, it is duty of Appellate Court to affirm regardless of erroneous ruling.

Enloe, J., dissenting.

Appeal from Superior Court, Vigo County; Wm. Gleason, Judge.

Action by Sarah A. Archibald against the Continental Life Insurance Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Beasley, Douthitt, Crawford & Beasley, of Terre Haute, for appellant.

A. Z. Thomas and J. T. Walker, both of Terre Haute, for appellee.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(162 N.E.)
rate of ten dollars per week, but not exceeding
fifteen consecutive weeks."

NICHOLS, J. Action by appellee to recover moneys alleged to be due on an accident insurance policy by reason of an alleged injury. The trial was by jury resulting in a verdict in favor of appellee in the sum of $150, from which this appeal.

The errors relied upon for reversal are: (1) The court's action in overruling appellant's motion to make the complaint more specific; (2) in overruling appellant's demurrer to the complaint; (3) in overruling appellant's motion for judgment in its favor on special answers by the jury to interrogatories, notwithstanding the general verdict; and (4) in overruling appellant's motion for a new trial. The complaint alleges in substance that on June 25, 1925, for a consideration, appellant issued a policy of insurance to appellee covering a term of 12 months, by the terms of which appellant promised payment of indemnity in the sum of $10 per week not exceeding 15 weeks in the event of certain ac

cidental injury; that on August 23, 1925, about 8 p. m. and while said policy was in full force, appellee was riding in the rear seat of a motor-driven vehicle, an Overland touring car, being a private car and in private use; that while in said automobile as aforesaid, driving on a certain public highway, a Ford Truck heavily laden with coal ran into and collided with the said automobile in which appellee was riding, all without her fault; that as a result of said collision she was knocked from the rear seat, over, upon and against the back of the front seat of said automobile and thereby injured, the extent of the injuries being averred; that she has fully complied with the terms of said policy,

and made demand for payment of her claim, which has been refused; and that there is due and unpaid the sum of $150. Prayer accordingly.

The copy of policy, which is made an exhibit, contains the following:

"In consideration of the payment of the premium and subject to the terms, conditions and limitations contained herein does hereby insure Sarah A. Archibald, hereinafter called the insured, for a term of twelve months from the date hereof against death or disability resulting directly, independently and exclusively of all other causes from bodily injuries affected solely through external, violent and accidental means and sustained by the injured in the manner following:

"Part 1. By the wrecking or disablement of any private horse-drawn vehicle or motor-driven vehicle in which the insured is riding or driving, or by being accidentally thrown from such vehicle or car.

"Part 3. If the insured sustains injuries in any manner specified in part 1 (b), which shall not prove fatal or cause specified loss of members of the body, but shall immediately, continuously and wholly disable and prevent the insured from performing each and every duty pertaining to any and every kind of business, labor or occupation during the time of such disablement, the company will pay indemnity at the

[1] Appellant first complains that the court committed reversible error in overruling its motion to make the complaint more specific, by stating therein facts to show specifically whether or not appellee's injuries were the result of the wrecking or disablement of the vehicle in which she was riding, and by show

ing specifically wherein there was any wrecking or disablement of such vehicle. But appellant was not harmed by this ruling of the trial court, for had the complaint contained these averments, and it might well have contained them, as hereinafter appears by the evidence, the complaint would have then been good as against the demurrer. Without such averment, the complaint, the substance of which is set out above, was clearly bad as against the demurrer, for the reason that it does not appear therein that appellee was injured by the wrecking or disablement of the vehicle in which she was

riding, and it is only for injuries resulting from such cause for which appellant is liable under its insurance contract. Had appellant stood upon its demurrer to the complaint, and appealed from the judgment of the court on its ruling on such demurrer, this court would have been compelled to reverse the judgment. But instead of taking this course, appellant filed its answer in general denial, and went to trial before a jury. It appears by the uncontradicted evidence, admitted without ob

jection, that there was a "head-on" collision between the car in which appellee was riding, which was a private or family car, and a Ford truck, by which appellee was thrown from the back seat in which she was riding, forward and across the front seat, thereby producing the injuries for which she seeks a recovery under the terms of her contract of insurance; that the front axle of the car was bent, the front wheels were thrown out of line, the spindle holding the wheel to the axle, and the tie rod were each bent. It further appears that after separating the car from the truck, the driver managed to turn it around and drive it back to a garage, a distance of about a mile and three quarters, requiring 30 minutes' time; that the car was almost unmanageable, and when near the garage, it stopped and had to be pushed into the building. It thus appears by the evidence that appellee was injured by the wrecking or disablement of a private motor-driven vehicle, and under the terms of her insurance contract she was entitled to recover.

[2, 3] While we hold that the court erred in overruling the demurrer to the complaint, we must also determine whether such ruling, in view of the whole record, was prejudicial to appellant before we will reverse because of such error. It has been many times held by this court and the Supreme Court that if it affirmatively appear by the whole record that

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