Discharge.

FACTS: Mary Ann McClusky and her husband Curtis borrowed $75,000 and signed a note payable to Francis and Thomas Gardner. As collateral, Mary Ann gave the Gardners a mortgage on a farm owned in her name only. After the McCluskys divorced, Mary Ann found, in a file in the basement of her house, the note with the word “Paid” written across it. When the Gardners refused to cancel the mortgage, she filed a suit in an Indiana state court against them. During the trial, she testified that she did not know how the note came to be in her basement or who wrote “Paid” across it. The Gardnerstestified that they had not surrendered it.

ISSUE: Should the court presume that the note had been discharged, given that it was in Mary Ann’s possession and had the word “Paid” written across it? Discuss.

RULE/RESOLUTION: [Gardner v. McClusky, 647 N.E.2d 1 (Ind.App. 1995)] How did the court answer the questions? What did the court decide?

EXPLANATION/APPLICATION-Do you agree with the court? Why or why not? Can you change any facts to give a different result?