Fanning v. Hembree Oil Co.
| Decision Date | 16 December 1968 |
| Docket Number | No. 5--4780,5--4780 |
| Citation | 245 Ark. 825,434 S.W.2d 822 |
| Court | Arkansas Supreme Court |
| Parties | , 5 UCC Rep.Serv. 1187 Myrl FANNING, Appellant, v. HEMBREE OIL COMPANY, Inc., Appellee. |
Pearson & Pearson and Walter R. Niblock, Fayetteville, for appellant.
Putman, Davis & Bassett, Fayetteville, for appellee.
This is an appeal from a judgment on a promissory note. The trial court, sitting as a jury awarded judgment to Hembree Oil Company, Inc., against Myrl Fanning, holding that Fanning signed the note in his personal capacity and not in his capacity as an officer of Razorback Asphalt Co., Inc. The single purpose of the appeal is to test the sufficiency of the evidence to support the verdict.
Several pertinent facts are undisputed. Roy Hembree operated the Hembree Oil Co., Inc., engaging in the oil and gas business. Myrl Fanning and Darrell Winters were incorporated as Razorback Asphalt Co., Inc. Winters was president and Fanning was secretary. They were engaged in the selling and laying of asphalt. Razorback, under prior ownership, had run into financial difficulties and sold the business to Winters and Fanning. At that time, Razorback owed a small balance to Hembree for merchandise. The new owners continued to do business with Hembree. By July 1966, the account exceeded $2000. At that time, Hembree went to Winters and Fanning and demanded a personal note as security for the account as a condition precedent to continued business relations. A note was then and there executed. Darrell Winters signed on the top signature line; and, just above his signature, Razorback's secretary typed 'Razorback Asphalt Co., Inc.' Myrl Fanning signed on the second signature line. No representative capacity of the signers was placed on the note.
Hembree being the successful party, we examine his version of the execution of the note in search of substantial evidence to support the verdict. Because of an outstanding account, Hembree went to see Fanning when Fanning and Winters bought Razorback; it was then agreed that when Hembree extended credit to Razorback, he would look to Fanning for payment; and Hembree knew that Winters had no financial rating. Hembree was not aware that Razorback was a corporation. (The letterheads and billings which are in the record and which came into Hembree's hands in the regular course of business styled the company 'Razorback Asphalt Co.'; and Razorback assigned an account receivable to Hembree, and that assignment was not executed in the name of Razorback, rather it was over the signatures of Winters and Fanning.) When Hembree went to see Fanning and obtained the note in litigation, he asked for a personal note from Fanning; the latter protested signing in his personal capacity; but, nevertheless, he did sign the note. Hembree wanted a note signed personally by Fanning because Hembree felt the signature of Winters would not add anything to Hembree's security; and Hembree did not know the name, 'Razorback Asphalt Co., Inc.,' had been inserted in the note. At the time the note was signed and delivered, Hembree gave this account:
'THE COURT: State what was said, the conversation.
'A. Well, he just didn't want to sign it. I don't know, he had always promised me what he would do about paying these bills, but then he just didn't want to sign it then * * *.
'Q. Was there anything said then by Mr. Fanning about who was to pay that note?
'A. He said, 'I will see to it that you get your money.''
After Hembree obtained the note, he extended credit to Razorback on open account and in substantial amount.
Fanning's version of the execution of the note was extremely opposite that of Hembree. He was positive that Hembree asked for a personal note 'and I told him I would not do that, that I would sign it as a corporation officer only.' He was corroborated by Winters and by Fanning's secretary.
The single point for reversal is that the judgment in favor of Hembree 'is not supported by a...
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