Timi v. Prescott State Bank

Decision Date23 July 1976
Docket NumberNo. 48028,48028
Citation220 Kan. 377,553 P.2d 315
PartiesGerald P. TIMI et al., Appellants, v. PRESCOTT STATE BANK, a corporation, and R. G. Murrow, Appellees.
CourtKansas Supreme Court
Syllabus by the Court

1. The manifest purpose of summary judgment is to obviate delay where there is no real issue of fact. A court should never attempt to determine the factual issues on a motion for summary judgment, but should search the record for the purpose of determining whether factual issues do exist. If there is a reasonable doubt as to their existence, a motion for summary judgment will not lie.

2. In determining a motion for summary judgment a court must give to the party against whom summary judgment is sought the benefit of all inferences that may be drawn from the facts under consideration. A popular formula is that summary judgment should be granted on the same kind of showing as would permit direction of a verdict were the case to be tried. If there is any question as to the credibility of witnesses or the weight of the evidence, summary judgment must be denied.

3. A guaranty is a contract between two or more persons, founded upon consideration, by which one person promises to answer to another for the debt, default or miscarriage of a third person, and, in a legal sense, has relation to some other contract or obligation with reference to which it is a collateral undertaking.

4. The formation of a guaranty contract, like any other contract, is governed by principles of mutual assent, adequate consideration, definiteness and a meeting of the minds.

5. The first essential to be proven in an action for fraudulent representation is the making of a false statement of a material fact, either past or present.

6. To constitute actionable fraud the representation must relate to past or present fact, as opposed to mere opinions or puffing or promised actions in the future.

7. A fact is material if it is one to which a reasonable person would attach importance in determining his choice of action in the transaction involved.

8. In an action for damages against a bank and a bank officer, based upon guaranty of payment and false representation in connection with the sale of plaintiffs' cattle, where the trial court had before it all the evidence on the matters at issue which a formal trial would have produced, it is held, neither a contract of guaranty nor actionable false representation was shown and the court properly rendered summary judgment against plaintiffs.

Richard G. Tucker, Erie, argued the cause, and Charles F. Forsyth and Clark M. Fleming, Erie, were with him on the brief for appellants.

Richard L. Roberts, Olathe, argued the cause, and George A. Lowe, Olathe, was with him on the brief for appellee Prescott State Bank.

No appearance for appellee R. G. Murrow.

HARMAN, Commissioner:

This is an action for a money judgment by three individuals engaged in the cattle business against a bank and one of its officers, based upon their guaranty of payment for cattle sold by plaintiffs to a cattle buyer and misrepresentation as to the cattle buyer's financial ability. Plaintiffs appeal from the rendition of summary judgment against them (summary judgment was not granted as to one transaction and that claim is still pending in the trial court).

Appellants Gerald P. Timi and Tom Timi are sons of appellant Pete Timi, all of whom live near Girard where they are engaged in general farming and livestock operations. In 1973 Gerald and Tom entered into a partnership called Timi Brothers for the purpose of investing in the hog futures market and purchasing cattle to feed and sell. This suit arises out of a series of cattle purchases by one Mike Mangum from Timi Brothers and each appellant individually. Mangum, who had been a feed salesman, ventured into the cattle business with funds advanced by one Clyde Albright, a Fort Scott cattle dealer. Mangum had a checking account at appellee Prescott State Bank in which he deposited a check for $71,500 given him by Albright. Mangum bought cattle from appellants and paid for them with checks drawn on this account. He resold the cattle to Albright. Appellee R. G. Murrow, who was thirty-two years of age, was a vice-president of the Prescott State Bank, its loan officer and managing officer. When summary judgment was entered the trial court had before it the depositions of all principals in the case.

Commencing January 12, 1973, and ending February 4, 1973, appellant sold and delivered to Mangum in ten separate transactions 347 cattle for which they were given checks on the Prescott bank. These checks, totaling $126,600, were honored and paid and these sales form no part of this lawsuit.

On February 8, 1973, Gerald Timi sold Mangum forty-seven head of cattle and received therefor Mangum's two checks totaling $25,000 drawn on the Prescott bank; when presented several days later these checks were dishonored for insufficient funds and have never been paid. Also on February 8, 1973, Tom Timi sold eighteen head of cattle to Mangum for which he received a $7,700 check on the bank which was similarly dishonored. On February 13, 1973, Timi Brothers sold 100 head of cattle to Mangum and received two $17,000 checks on the bank, each of which was dishonored (this is the transaction pleaded in paragraph VII of appellants' petition upon which summary judgment was not sought or granted because of facts peculiar to it alone which will be stated later). On February 13, 1973, Gerald Timi sold fifteen heifers to Mangum for $4,500. No check was given on this transaction and the agreed price was never paid. On February 14, 1973, Timi brothers sold forty-four steers and heifers to Mangum. A price was never agreed upon by the parties as to these heifers; these cattle had just been purchased by Timi Brothers for $15,147.53 at the Parsons stockyard. The last transaction was on Thursday, February 15, 1973, when Tom and Pete Timi sold Mangum fifty-two heifers for $31,000; again no check was given and this purchase was never paid for (by way of explanation it may be noted Mangum testified he frequently picked up cattle from the Timis and they would agree on a price later; when he gave the Timis checks they were to hold them until told the checks would clear).

Everything went serenely with appellants' and Mangum's business relationship and appellants were pleased with the profit they were making from the quick turnover of cattle bought and then sold to Mangum until Saturday, February 17, 1973, at which time Mangum telephoned Gerald Timi and advised he was broke and had no more money. (The Timis testified they had not deposited the checks for the two February 8th sales because of a death in the family; they had previously deposited the two $17,000 checks because they needed the money.) Mangum told Gerald the two $17,000 checks would go through all right.

During midafternoon on Sunday, February 18, 1973, Mangum telephoned vice-president Murrow and told him he was broke. At that time Murrow had in his pocket two uncashed checks given him by Mangum totaling $27,000, the balance due for 106 cattle which Murrow had personally sold on his own account and delivered to Mangum on Thursday, February 14th. On Sunday evening, February 18th, Murrow went to the bank. There he found the two $17,000 checks written by Mangum to the Timi Brothers on February 13th which had been received by the bank on Friday, February 16th. Murrow deposited his two checks for $27,000 and changed the bank's penciled records, which would later be machine-posted, to show that his two checks had been received by the bank on Friday prior to those of the Timi Brothers. Murrow marked the Timis' checks as dishonored for insufficient funds and mailed them back on the night of Sunday, February 18th. With his checks from Mangum he purchased a draft which he owed on the cattle. (Murrow's position at the bank was terminated about August 1, 1973.)

Appellants' basis for their contention of guaranty of payment by the bank and fraudulent representation as to Mangum's ability to pay for cattle purchased by him consists of five separate contacts between them and Murrow-three by Gerald, one by Tom and one when both Gerald and Tom were present. The first contact was in January, 1973, on the first occasion appellants sold cattle to Mangum. Gerald Timi testified that at Mangum's instance he telephoned Murrow and asked if Mangum had enough money in the bank to pay for $9,600 worth of cattle; Murrow said 'Yes'; Mangum's check for this amount was subsequently paid. Another contact occurred sometime later in January when Gerald and Tom went with Mangum to Prescott. They had coffee with Murrow in a local restaurant. Timis as individuals had already made a few sales to Mangum at this time. Gerald testified as to the conversation:

'Q. All right. Now, what was the conversation you had in the restaurant?

'A. Oh, just kind of everyday talk about the weather and this and that, and then we asked Murrow about Mike's bank account and told him that Mike wanted to buy cattle from us and how good was he? Was he good enough to go ahead and deal with? And that was about it, other than just general BS.

'Q. This was all while you were in the restaurant having coffee?

'Q. Did Murrow indicate the amount of money he had in his account on that occasion?

'A. No, sir.

'Q. Was there any discussion about Albright?

'A. No, sir.

'Q. Just general shooting the breeze or shooting the bull; is that it?

'A. That is all, and more or less just my brother and I wanting to know how good Mike was, you know, if he was-had enough money to go ahead and pay for these cattle.

'Q. Which cattle?

'A. Well, any cattle that we would sell him. Because by this time we were-I mean, I had sold him quite a few, my brother had sold him a few head and we told him we were going to go back and buy some more cattle to put in the feed lot and (he) said, 'I might want to but them if you get them.' He said...

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