G. F. C. Corp. v. Nesser

• Decision Date: 08 November 1954
• Docket Number: No. 1,No. 43908,43908,1
• Citation: 273 S.W.2d 264
• Parties: G. F. C. CORPORATION, a Corporation, Plaintiff-Respondent, v. Joseph J. NESSER, Defendant-Appellant
• Court: Missouri Supreme Court

Page 264

273 S.W.2d 264

G. F. C. CORPORATION, a Corporation, Plaintiff-Respondent, v. Joseph J. NESSER, Defendant-Appellant.

No. 43908.

Supreme Court of Missouri, Division No. 1.

Nov. 8, 1954.

Motion for Rehearing or to Transfer to Court en Banc Denied

Dec. 13, 1954.

Ludwig Mayer, Clayton, for appellant. Charles M. Shaw and Wayne C. Smith, Jr., Clayton, of counsel.

Thomas J. Guilfoil, Thomas F. Manion, St. Louis, for respondent.

COIL, Commissioner.

Plaintiff-respondent recovered a judgment for $12,020 in its action against defendant-appellant on a guaranty contract. The case was tried by the court without a jury. Defendant contends that the trial court erred in rendering any judgment for plaintiff and, in any event, in the amount of $12,020 because: the principal debtor had paid plaintiff the amount due under the guaranty contract; plaintiff released security which it had received for the debt and thereby had released the guarantor; and that, in any event, the judgment should have been $5,520 less than it was by reason of the guarantor having failed to approve certain transactions between plaintiff and the principal debtor in accordance with the terms of the contract.

The contract, dated November 3, 1950, signed by plaintiff's vice president and by defendant Nesser, recited that a dispute had arisen between M. M. Blives, doing business as Milt Blives Motor Company, and plaintiff, G. F. C. Corporation, as to the account between them; and that, to induce plaintiff to continue business with M. M. Blives, defendant Joseph J. Nesser agreed to guarantee Blives' account with plaintiff in the respects noted in the contract. The parties agree that only these two paragraphs of the guaranty contract are applicable to the questions here:

'1. That G. F. C. Corporation will leave on the lot of M. M. Blives, d/b/a Milt Blives Motor Company located at 7125 Manchester Ave., St. Louis, Missouri, the automobiles that they now have on open floor plan, as shown on the attached list, and will continue from time to time to floor plan certain other automobiles for said M. M. Blives, if and when said transactions are approved by Joseph J. Nesser.

'2. In consideration of above, Joseph J. Nesser does hereby agree and guarantee to G. F. C. Corporation, that none of the automobiles in question, and listed on the attached list or any other automobiles subsequently floor planned to G. F. C. Corporation by M. M. Blives, with the approval of J. J. Nesser, will be sold or otherwise disposed of by M. M. Blives, unless he shall immediately upon such sale or disposition, pay off the loan of G. F. C. Corporation on such car or cars, and if said M. M. Blives shall not immediately pay off said loan or loans the said Joseph J. Nesser does personally guarantee the payment of same, and will make immediate payment of same on notifications.'

The automobiles described on the list attached to the contract mentioned in paragraph 1 above are not here involved. The presently applicable provision of paragraph 1 is that plaintiff agreed to 'floor plan' additional automobiles for Bilves 'if and when said transactions are approved by Joseph J. Nesser.' From the evidence, we understand that 'floor planning' is this: An automobile dealer (in this instance, a used car dealer), after having purchased an automobile, executes a note (in this instance, to G. F. C.), in an agreed amount, secured by a chattel mortgage on the automobile he has purchased. Upon delivery to the finance company of the note, chattel mortgage, and sometimes the automobile title, the company delivers its check to the dealer for the amount of the note. When the dealer desires to sell, or does sell, the automobile, he pays the finance company the amount of the note, with interest, whereupon the note, chattel mortgage, and the title, if any, are delivered to the dealer. Plaintiff's evidence was that in 'floor plan' transactions, it may or may not receive the title to the involved automobile at the time it is mortgaged.

From November 3, 1950, to April 13, 1951, plaintiff loaned Blives $10,000 to $15,000 under the instant 'floor plan' arrangement (exclusive of the $12,020 here involved), which $10,000 to $15,000 was apparently repaid without incident. The $12,020 here involved was loaned to Blives on various dates from January 16 through April 12, 1951, on eleven automobiles, which were among automobiles covered by seven notes attached to and secured by seven chattel mortgages. Across the faces of four of the notes was written 'OK J. Nesser' or 'J. Nesser'. Across the faces of three of the notes was written 'O. K. Jos Nesser Mtrs Inc., H. G. Tiffany' or 'Jos Nesser Mtr Inc., H. G. Tiffany'. It is undisputed that the 'J. Nesser' appearing on the four notes was the signature of defendant Joseph Nesser, and that such signatures appearing across the faces of the four notes constituted approvals of the proposed transactions by defendant Nesser as provided for in the guaranty contract.

On November 3, 1950 (the date of the contract), defendant Nesser told Mr. H. T. Bruce, plaintiff's district manager, that Tiffany (to whom Nesser had introduced Bruce the day before) was Nesser's manager and was to be on Blives' lot to 'police it' and see that the 'contract was carried out'; and, in substance, that either Nesser or Tiffany would 'okay' the chattel mortgages and notes to be executed and delivered by Blives to plaintiff, and that either signature would signify Nesser's approval under the terms of the guaranty contract.

On April 12 and 13, 1951, Blives delivered his personal checks to plaintiff in various amounts totaling $11,100, in ostensible payment of the amounts due on the various automobiles which were covered by the seven notes and chattel mortgages, except one which was mortgaged for $920. Upon receipt of the checks, plaintiff delivered the titles to all the involved automobiles except the one for which no check was delivered. Thereafter, and on the same days, plaintiff's ledger sheets, which reflected the involved transactions, were posted with a credit to Blives in the amount of each individual check, and the 'balance' column on each ledger sheet as to each of the involved automobiles (except the one mortgaged for $920), was marked 'O'. All of these checks were returned unpaid. Plaintiff's evidence was that Blives stopped payment on them. Consequently, on various dates between April 13 and April 19, 1951, plaintiff's ledger sheets were corrected so as to reflect the reinstatement of the various balances which had been ostensibly liquidated by the checks.

Plaintiff's evidence was further that a search was made by plaintiff for each of the automobiles involved and that none of them were found. Plaintiff's evidence did not definitely show that the involved automobiles had been 'sold or otherwise disposed of by M. M. Blives.' It appears, however, that neither at the trial nor here has defendant contended that the automobiles involved were not 'sold or otherwise disposed of by M. M. Blives.' On the contrary, the reasonable inference from the record is that the parties tacitly agreed that the automobiles (including the one mortgaged for $920) had been 'sold or otherwise disposed of' by Blives. Plaintiff made demand on Nesser for $12,020 under the terms of the guaranty contract.

Defendant contends that the delivery of the checks by Blives to plaintiff constituted payment of all amounts due by Blives, and that, therefore, defendant Nesser was not liable on the guaranty contract. (No reference is made in defendant's argument to the one involved automobile which was mortgaged for $920 and for which no check was delivered by Blives to plaintiff. Of course, defendant's contention as to payment by delivery of checks would not apply to the $920 transaction. Our view of the case, however, makes it unnecessary to consider this $920 transaction as a separate and distinct item.) In Hickerson v. Con Frazier Buick Co., Mo.App., 264 S.W.2d 29, 33[5, 6], it was said, 'a check is not payment of a debt unless by express contract it is so received; * * * there arises no presumption that a creditor takes a check in absolute payment from the mere fact that he accepts it from his debtor, in fact the presumption is just the contrary; * * * the evidence must clearly establish that the seller agreed to accept the check as payment; and the burden is on the debtor to so prove by clear and cogent evidence. Rettinghouse v. Krey Packing Co., Mo.App., 200 S.W.2d 584, 586; Griffin v. Priest, Mo.App., 137 S.W.2d 685; Lewis v. [James] McMahon & Co., 307 Mo. 552, 271 S.W. 779; Groomer v. McMillan, 143 Mo.App. 612, 128 S.W. 285; Goddard Grocer Co. v. Freedman, Mo.App., 127 S.W.2d 759; Pflanz v. Pflanz, 237 Mo.App. 873, 177 S.W.2d 631; State v. Crumes, 319 Mo. 24, 3 S.W.2d 229; Armstrong v. First Nat. Bank, Mo.App., 195 S.W. 562; Skinner & Kennedy Stationery Co. v. Lammert Furn. Co., 182 Mo.App. 549, 166 S.W. 1079; 31 A.L.R. loc. cit. 579; 46 Am.Jur. 613.'

There was no express written agreement that Blives' checks were to be received as absolute payment of the amounts he owed plaintiff. True, an express agreement to receive a check as payment need not necessarily be a written agreement. And the express agreement may be proved by facts and circumstances in evidence which clearly show that it was the intention of the parties that a check was to constitute absolute payment of a debt. Griffin v. Priest, Mo.App., 137 S.W.2d 685, 687[1, 2]. However, the only facts and circumstances in this record upon which defendant may rely to sustain his contention that Blives' checks constituted payment are: the manner in which plaintiff...