Bank of Morrillton v. Skipper Tucker & Co.

• Decision Date: 23 June 1924
• Docket Number: (No. 60.)
• Citation: 263 S.W. 54
• Parties: BANK OF MORRILLTON v. SKIPPER, TUCKER & CO. et al.
• Court: Arkansas Supreme Court

263 S.W. 54

BANK OF MORRILLTON v. SKIPPER, TUCKER & CO. et al.

(No. 60.)

Supreme Court of Arkansas.

June 23, 1924.

Appeal from Circuit Court, Conway County; J. T. Bullock, Judge.

Action by Skipper, Tucker & Co., a copartnership, against the Bank of Morrillton and another. Judgment for plaintiffs, and named defendant appeals. Reversed and remanded for new trial.

Strait & Strait, of Morrillton, for appellant.

Edw. Gordon and Calvin Sellers, both of Morrillton, for appellees.

McCULLOCH, C. J.

Appellees, Skipper, Tucker & Co., a copartnership, instituted this action against appellant to recover on a contract between the parties whereby appellant undertook to guarantee the payment of an account due to appellees by the Lewelling Construction Company. The contract is as follows:

"Morrillton, Arkansas, April 23, 1921. The undersigned, Bank of Morrillton, in consideration of the sum of $1 in hand paid, agrees to and does hereby guarantee the payment of the account due Skipper, Tucker & Co. by the Lewelling Construction Company. Bank of Morrillton, by Loid Rainwater, President."

It is alleged in the complaint that at the time of the execution of this contract the Lewelling Construction Company owed appellees on account the sum of $4,821; that this amount was increased by later purchases on account, which ran the aggregate up to $5,505.10; and that a payment had been made thereon reducing the account to the sum of $2,005.10, for which recovery was prayed.

The contention of appellees was that the guaranty was a continuing one, covering subsequent purchases by the Lewelling Construction Company, and that they are entitled to recover the full balance due on account, including subsequent purchases. The contention of appellant is that the contract is not a continuing guaranty, but merely covers the amount of the account owing to appellees at the time of the execution of the contract.

Appellant defends on the ground that appellees represented to appellant at the time of the execution of the contract that the amount of the account was $2,500, and that the construction company had enough coming to it from certain road districts to cover the indebtedness due by the construction company both to appellant and to appellees. Appellant also claimed that there was a misrepresentation concerning the amount due by the road districts to the Lewelling Construction Company as retained percentage, and that these fraudulent misrepresentations induced appellant to enter into the contract.

There was a judgment below in favor of appellees for the sum of $2,005.10, and an appeal has been duly prosecuted.

The facts developed on the trial were that, at the time of the transactions under consideration between appellant and appellees, the Lewelling Construction Company had about completed a contract with a certain road improvement district in Conway county. The construction company had been dealing with appellees, purchasing supplies from them, and had also received large advances in money from appellant bank. Appellant had secured from the construction company an assignment of all amounts due from the road district and had applied to the district for payment, but the voucher had not been issued; there appears to have been some unreasonable delay in the issuance of the voucher. One of the members of appellee firm was secretary and treasurer of the road improvement district, and in order to secure the help of appellees in getting the voucher for the retained percentage turned over to appellant, the latter executed the contract of guaranty in the suit. The check, or voucher, was for $13,500, and as soon as it was delivered to appellant bank another creditor of the Lewelling Construction Company, one Horn, by name, sued the construction company and caused a writ of garnishment to be served on the bank to reach this fund, claiming that it belonged to the construction company. In this situation, appellant bank paid over to appellees the sum of $3,500, and appellees executed to appellant the following agreement in writing:

"7/6/21. In consideration of $3,500 paid on account of Skipper, Tucker & Co. versus Lewelling Construction Company, we hereby agree to wait until garnishment is released before taking any legal action for balance held by Bank of Morrillton to use. Skipper, Tucker & Co., by N. B. Skipper."

This amount was released from the garnishment by agreement between the bank as garnishee and the other parties to that suit.

Appellant introduced testimony tending to show that members of appellee firm at the time of the execution of the contract of guaranty represented to appellant that the debt of the construction company to appellees was not over $2,000 or $2,500. Appellant also introduced testimony to the effect that appellees represented to appellant that the amount due from the road improvement district to the construction company as retained percentage was about $17,000.

The testimony was sufficient to warrant the submission to the jury on the issues concerning these alleged misrepresentations, and the question whether the misrepresentations, if made, constituted the inducing cause for appellant entering into the contract. The evidence was conflicting on these issues.

Appellant filed a motion to require appellees as plaintiffs to make the Lewelling Construction Company a party to the suit. The court sustained the motion and ordered appellees to make the construction company a defendant, and the cause was postponed until the...