Commercial Credit Corp. v. Harris, 46806
| Decision Date | 09 June 1973 |
| Docket Number | No. 46806,46806 |
| Citation | 212 Kan. 310,510 P.2d 1322 |
| Parties | COMMERCIAL CREDIT CORPORATION, Appellant, v. Olga HARRIS and Robert B. Wagner, Executor of the Estate of Calvin I. Harris, Deceased, Appellee. |
| Court | Kansas Supreme Court |
Syllabus by the Court
1. Amendments to pleadings are within the discretion of the trial court and no error will lie unless such discretion is abused.
2. In an action based on a contract, the burden of proof is on the plaintiff to show: (1) execution and existence of the contract alleged in the petition; (2) sufficient consideration to support the contract; (3) performance or willingness to perform in compliance with the contract alleged; and (4) the defendant's breach insofar as such matters are in issue.
3. The defense of misrepresentation is an affirmative defense and the burden of proof on the issue of misrepresentation remains with the defendant throughout the trial. It is not incumbent on plaintiff to prove there was no misrepresentation.
4. The record is examined and it is held: the trial court did not abuse its discretion in permitting defendant to amend her answer.
5. The record is further examined and it is held: the trial court erred in entering judgment for defendant based on a conclusion that plaintiff had the burden of proof on all issues.
William F. Kluge, III, of Lambdin & Kluge, Chartered, Wichita, argued the cause and was on the brief for appellant.
Thomas C. Boone, Hays, argued the cause and was on the brief for appellee.
This is an action to recover on a written guaranty executed by defendant wife in favor of plaintiff, covering business losses of her husband who is now deceased. The trial court entered judgment for defendant and plaintiff appeals.
Calvin I. Harris was a mobile home dealer with units for sale in Wakeeney, Kansas, and in Dodge City, Kansas. On October 15, 1968, Harris became an applicant to do business with Commercial Credit. Commercial Credit, through its local manager, Leon Sorenson, began a background investigation to determine whether or not Harris' character and financial status were such that plaintiff's home office in Baltimore, Maryland, would approve of the local office financing Harris' business. After completing the necessary reports, Sorenson forwarded the matter to the home office for approval. The home office approved financing of this unincorporated business, subject to the condition that Harris' wife, defendant herein, execute a personal guaranty to the effect that she would pay to plaintiff any obligation Harris did not pay.
Sorenson went from plaintiff's office in Salina, Kansas, to Wakeeney on November 25, 1968, to have Mrs. Harris execute the required guaranty instrument. Sorenson and Harris went to the Harris home to see Mrs. Harris and all three parties conferred in the family kitchen.
Plaintiff's witness, Sorenson, testified that Harris explained the nature of the instrument to his wife before she signed it. Sorenson further testified he also explained the instrument to her before she signed it. Mrs. Harris testified both Sorenson and her husband told her the instrument authorized plaintiff to pick up the mobile homes on his lots in the event something happened to Harris.
Some two weeks after Mrs. Harris' execution of the guaranty, Commercial Credit first advanced money to Harris Mobile Home Sales. During the following two years, some $500,000 was advanced to Harris or on his behalf.
On December 15, 1970, Harris was tragically killed while piloting his airplane. Rather than disturb Mrs. Harris in her grief, Commercial Credit contacted her 25-year-old law student son to make the necessary arrangements to clear up decedent's business affairs. Commercial Credit learned on the date of Harris' death that he had been selling mobile homes 'out of trust.'
The parties stipulated at the time of trial that indebtedness of Harris to Commercial Credit was $12,920.73, of which a great percentage was for two 'out of trust' sales of mobile homes. Before filing suit, plaintiff made many demands upon defendant for payment of the above sum.
This action was filed on March 16, 1971. Defendant's answer was filed on June 7, 1971. The matter was regularly set for trial on October 18, 1971, and on October 14, 1971, defendant filed an amended answer alleging lack of consideration as a defense. Defendant was then allowed to file a second amended answer alleging misrepresentation as a defense.
After an unreported pretrial conference, the matter proceeded to trial. The trial court agreed with plaintiff's statements that after the introduction of the guaranty and the plaintiff's records as to indebtedness of Harris to plaintiff, the plaintiff had presented a prima facie case.
The defendant stated in open court that she had the burden of proving fraud. Despite this, the trial court ruled the plaintiff had the burden of proof, and had somehow failed to sustain that burden. The court finally ruled the written guaranty which had been admitted into evidence without objection 'stands or falls on oral testimony only.'
The court made the following findings of fact and conclusions of law:
'The real issue is the validity of Joint Exhibit #2 as a contract between the plaintiff and the defendant. If Joint Exhibit #2 is a valid contract, and meeting of the minds of the contracting parties, other issues such as consideration and amount owed under the contract are met.
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'There was a presumption at the outset that the defendant Olga Harris had read and knew the contents of the writtent instrument she signed, but that presumption is rebutted by the testimony of Mr. Sorenson and Olga Harris which is not conflicting on this point. Therefore, the burden of proof is still on the plaintiff to prove the agreement and meeting of the minds in the execution of the contract instrument, Joint Exhibit #2.
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* * * 'The Court finds that the plaintiff has not sustained its burden of proof, and judgment should be entered against the plaintiff and for the defendant.'
The plaintiff filed a motion to amend judgment under the provisions of K.S.A. 60-252(b). This motion was heard by the court on February 14, 1972, and...
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