Commercial Credit Company v. Blanks Motor Company

• Decision Date: 30 May 1927
• Docket Number: 31
• Citation: 294 S.W. 999,174 Ark. 274
• Parties: COMMERCIAL CREDIT COMPANY v. BLANKS MOTOR COMPANY
• Court: Arkansas Supreme Court

294 S.W. 999

174 Ark. 274

COMMERCIAL CREDIT COMPANY v. BLANKS MOTOR COMPANY

No. 31

Supreme Court of Arkansas

May 30, 1927

Appeal from Ashley Circuit Court; Turner Butler, Judge; reversed.

Judgment reversed.

Smith & Etheridge, for appellant.

Compere & Compere, for appellee.

OPINION

SMITH J.

The appellant, Commercial Credit Company, is a corporation domiciled at New Orleans, and is engaged in the business of buying notes from automobile dealers given in payment of second-hand cars. Appellant furnishes to its customers from whom it buys notes a blank contract, which is filled out at the time a car is sold, and attached to this contract is a promissory note, which the dealer takes for the balance of the unpaid purchase price of the car. Appellee Blanks Motor Company sold a second-hand car to Oren Curtis who was a minor only nineteen years old, for the sum of $ 496.15. Of this amount $ 148.85 was paid in cash. The balance of $ 347.30 was evidenced by the note of Curtis to the order of appellee, and was payable monthly at the rate of $ 28.95 per month.

The custom prevailing between appellant and appellee and other customers in regard to the purchase of notes was as follows: The dealer would attach the note for the unpaid balance due on a car and the contract of sale to a draft drawn on appellant and payable in New Orleans. Appellant would pay the draft and take up the note and contract, and would then have from twenty to thirty-five days in which to determine whether it would keep or return the note. This time was employed in investigating the responsibility of the purchaser, references being required for that purpose, and, if the report was favorable, appellant kept the note, otherwise it would return the note and the sales contract to the dealer with the draft attached for the amount paid for the note.

Curtis had made four of the monthly payments, and then defaulted and informed appellee that he would not complete the payments, whereupon appellee advised appellant of that fact, and appellant sent a representative to see Curtis about the payment then past due. Curtis advised this representative that he was only nineteen years old, and did not intend to complete his payments, but would surrender the car if that was desired. The car had been so badly used that appellant's representative refused to accept it in satisfaction of the note.

It appears that appellee's agent who sold the car to Curtis knew, at the time of the sale, that Curtis was a minor, yet the contract of sale which Curtis signed stated his age to be twenty-one. Appellant did not know that Curtis was a minor when it bought the note, and was not so advised until after Curtis had declined to complete the payments on the note.

Appellee offered testimony to the effect that, after appellant had paid the draft to which the note was attached, a letter was received from appellant calling attention to the fact that answers had not been written into certain of the spaces of the sales contract, and appellee supplied the required information, and thereafter appellant wrote that it would not take the note "without recourse," as was the custom, but would require a guaranty on appellee's part that the note would be paid. Appellee declined to give this guaranty, and advised appellant, if it was not willing to take the note "without recourse," to redraw for the sum paid by appellant for the note with the note and contract attached to the draft.

The exact testimony of L. W. Blanks, appellee's managing officer, was that, "I answered them and told them that I would give them no warranty on that note, and I would not be liable on it, and if they did not want it on those terms, to return it to us, and redraw on us." The testimony on appellant's part was that no guaranty of payment had been asked, and none was refused, but we must assume, in view of the verdict returned in appellee's favor, that the testimony in its behalf was credited by the jury.

The note in question was indorsed as follows: "For value received, pay to the order of Commercial Credit Company, Inc., New Orleans, La., without recourse," signed, "Blanks Motor Company, by L. W. Blanks."

The general contract under which appellant bought notes from appellee gave it a reasonable time--which was shown to be from twenty to thirty-five days--in which to determine whether...