Commerce Trust Co. v. Howard

Decision Date08 July 1968
Docket NumberNo. 1,No. 53020,53020,1
Citation429 S.W.2d 702
PartiesCOMMERCE TRUST COMPANY, Plaintiff-Respondent, v. Ronald HOWARD et al., Defendants-Appellants
CourtMissouri Supreme Court

Milton C. Clarke, Roy P. Swanson, Kansas City, Arthur B. Cohn, Waynesville, for respondent, T. Alan Peschka, Swanson, Midgley, Jones, Eager & Gangwere, Kansas City, of counsel.

J. W. Grossenheider, Lebanon, for appellants.

FRANK W. HAYES, Special Judge.

The parties will be referred to as appellants and respondent. The respondent existing under the laws of Missouri and authorized to do business in the State of Kansas. The appellants are residents of Pulaski County, Missouri. The Overland Park Motor Center Company, Inc., is engaged in the business of buying, selling, financing and leasing automobiles in Overland Park, Kansas.

Mr. W. A. Morgan was the principal stockholder and manager of the Overland Park Motor Center Company, Inc. He and appellant Howard had known each other all their lives. Mr. Howard was in the neon sign business in Greene County, Missouri, and adjoining counties. The parties had not seen each other for several years and in 1963 or 1964, Mr. Morgan stopped to see Mr. Howard while on his way to Kansas City to enter the automobile business. Later Mr. Morgan contacted Mr. Howard and he and Mr. Howard went to respondent's bank and discussed with Mr. Osterman of the Installment Loan Department the question of the appellants' signing a guaranty agreement for Mr. Morgan. Negotiations resulted in Mr. Kelly, the then manager of Installment Loan Department of respondent, extending a line of credit to the company. Respondent was to make (1) floor plan financing of inventory, (2) demonstrator car loans and (3) loans on leased vehicles.

The appellants admit signing the guaranty. It is set out in full (despite its length) because its exact terms are very material.


'The undersigned hereby request you to give, and continue to give, Overland Park Motor Center Conpany, Inc., (hereinafter styled the 'borrower') from time to time, as you may see fit, financial accommodations and credit, and in consideration of the sum of one dollar, and other valuable considerations, the receipt of which is hereby acknowledged, and of financial accommodations and credit heretofore given or which may hereafter be given by you to said borrower, the undersigned hereby guarantee and promise and agree to make prompt payment to you, as they severally mature, of all overdrafts of said borrower, of all loans made, or which may be made by you to said borrower, of all moneys paid by you for the use of account of said borrower, and of all notes, acceptances and other paper which have been or may be discounted for, or at the request of said borrower, whether made, drawn, accepted, endorsed or not endorsed by said borrower, and whether endorsed with or without recourse, and of any and all other obligations, of every kind and character, now dur or which may hereafter become due from said borrower to you, howsoever created, arising or evidenced, and also of any and all renewals or extensions of any of the foregoing, regardless of other collateral now held by you, or which you may hereafter acquire, as additional security to any or all of the indebtedness of said borrower.

'It is understood that extension of time payment, or the renewal of such indebtedness shall not in any way impair the liability of the undersigned hereunder, and that the undersigned will keep posted as to all matters pertaining to this guaranty without notice from you.

'When any such overdrafts, loans, discounts, or other paper, or obligations, or any renewal or extension thereof, shall become and remain due and unpaid, the undersigned will, upon demand, pay the amount due thereon.

'These presents constitute a continuing promise and agreement and shall apply to and cover any and all such overdrafts, loans, discounts, or other paper, or obligations, now or hereafter existing, and to any and all renewals or extensions thereof, made, discounted or created prior to notice in writing served upon your president, any one of your vice-presidents, your secretary, cashier, or treasurer, that the undersigned will not be liable upon any such overdrafts, loans, discounts or other paper or obligations made, discounted, or created, after the receipt of such notice.

'Before proceeding hereunder against any of the undersigned, resort need not be made by you to collateral security held for said indebtedness, nor need you to exhaust your remedy against said borrower, nor against any other signer to this guaranty.

'Notice of the making, renewing or extending time of payment of any such overdrafts, loans discounts, or other paper or obligations, and of demand, protest, and notice of nonpayment thereof, and of notice of acceptance hereof, are expressly waived.

'If this guaranty be executed by more than one signer or all obligations hereby created, and all agreements herein contained shall be the several obligations and agreements of each of the undersigned, but at your option any or all of the same may be enforced against any or all of the undersigned jointly.'

The evidence discloses that after April 7, 1964, the time the guaranty was executed, the Overland Park Motor Center Company, Inc., became indebted to respondent, under the three finance plans, as follows:

                Plan A, Floor Plan Financing        $19,821.72
                Plan B, Demonstrator Car Financing  $35,096.00
                Plan C, Leased Car Financing        $92,754.92

On February 11, 1965, Mr. Osterman, at Mr. Morgan's request, wrote a letter of release to appellants releasing them from liability under Plan A as the amount had fallen under $50,000, as agreed between them. This left owing the amounts under Plans B and C.

Suit was instituted by respondent on December 22, 1965, on the guaranty in the Circuit Court of Pulaski County, after demand for payment. The defense of appellants was that the release of February 11, 1965, was a complete release of the appellants and not just a release of the debt under Plan A. The release is as follows:

'Dear Mr. and Mrs. Howard: In line with Mr. Morgan's request, we are, as of this date, relieving you and your wife from any liability connected with the floor plan of Overland Park Motor Center. Very truly yours, G. L. Osterman, Assistant Vice-President.'

Appellants further contend that there was mutual mistake in that the entire guaranty was to be ended when the floor plan 'A' liability ceased and that such provision was mistakenly omitted from the guaranty. Trial was held before a jury. The jury returned a verdict for the appellants. The trial court, upon motion of respondent, set aside verdict in favor of appellants on the grounds that question of mutual mistake and release is a question of law for the court, that verdict of jury is without support of evidence and that verdict was contrary to the law. The court then sustained respondent's motion for directed verdict against appellants (a) on demonstrator liability for $35,096.00 and (b) on lease car liability for $92,754.92, total $127,850.92. From these adverse rulings appellants appeal.

Appellants contend that the trial court erred in setting aside the verdict of the jury in their favor and directing a verdict for respondent. The evidence disclosed that appellants executed and delivered to respondents the written guaranty in question, that respondent accepted said guaranty, that repondent loaned money to Overland Park Motor Center Company, Inc., in reliance on said guaranty and that said company failed to pay when due the sums loaned to it. The guaranty provides that notice of acceptance of the guaranty is expressly waived by appellants.

Account cards of respondent were introduced without objection to show the loans and amounts due on loans made by respondent in connection with demonstrator car loans and leased car loans made by respondent to Overland Park Motor Center Company, Inc., after the date of appellants' guaranty. The transactions shown on the account cards for demonstrator car loans and leased car loans, in each instance, were supported by retail installment contracts or chattel mortgages and promissory notes. These business records were admitted into evidence without objection. So also was certain memorandum, prepared and identified by Mr. Circle, in course of his duties with respondent, analyzing and summarizing the amounts due on each type of financing covered by the guaranty. The respondent's evidence was not contradicted nor denied by appellants. The appellants did not dispute the fact of the indebtedness or the amount thereof.

One defense of appellants was that the guaranty was the result of a mutual mistake. There is no evidence herein to support such contention. Nor is the guaranty agreement ambiguous in any respect. There was nothing to submit to the jury as to the meaning of the guaranty. Its construction was a matter for the court. The rule is laid down in National Corporation, a Corporation v. Allan, Mo.App., 280 S.W.2d 428, 432, where the court says:

'(2, 3) Where the language of the contract on its face is not clear or is ambiguous, and resort to extrinsic evidence is necessary, if such evidence be conflicting, or, if not conflicting, different conclusions might reasonably be drawn therefrom, the construction of the agreement is for the jury under proper instructions from the Court. But where a contract is clear and unambiguous on its face, or where there is no real conflict of evidence upon any of the essential facts properly to be considered is construing the contract, and the true meaning of the words used is made clear by such evidence, it becomes the duty of the Court, and not the jury, to construe it. Keyes Farm & Dairy Co. v. Prindle, 249 Mo. 600, 155 S.W. 391; McFarland v. Gillioz, 327 Mo. 690, 37...

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