Hayes v. Claterbaugh

• Decision Date: 04 April 1962
• Docket Number: No. 9705,9705
• Citation: 140 So.2d 737
• Parties: Mrs. Maude HAYES, Plaintiff-Appellant, v. Jack CLATERBAUGH, Defendant-Appellee.
• Court: Court of Appeal of Louisiana — District of US

Page 737

140 So.2d 737

Mrs. Maude HAYES, Plaintiff-Appellant, v.Jack CLATERBAUGH, Defendant-Appellee.

No. 9705.

Court of Appeal of Louisiana, Second Circuit.

April 4, 1962.

Rehearing Denied May 9, 1962.

Certiorari Denied June 15, 1962.

Henri Loridans, Bossier City, for appellant.

R. W. Coyle, Shreveport, for appellee.

Before GLADNEY, AYRES and BOLIN, JJ.

GLADNEY, Judge.

Plaintiff's suit for the recovery of $1,200.00 is met with the defense the money was borrowed on behalf of defendant's principal, Madison Park Appliance and Furniture, Inc., and that defendant is not personally liable for its repayment.From a judgment rejecting plaintiff's demands, she has appealed.

The plaintiff, Mrs. Maude Hays, a sixty-nine year old widow, was possessed of extremely poor eyesight when she entered into the transactions herein involved, which occurred on January 27 and January 30, 1961.She testified that she was completely without sight in one eye and had but limited vision in the other, her condition having required eleven operations.The defendant, Jack Claterbaugh, was the president of the now defunct corporation, Madison Park Appliance and Furniture, Inc., which was either wholly or substantially owned by him and completely subject to his management.The defendant testified this was 'my first business I have ever owned myself.'It is not clearly disclosed by the record the corporation enjoyed an identity separate from that of the defendant.The place of business of said corporation was located two blocks from where the plaintiff lived, and Mrs. Hays and Jack Claterbaugh had been acquainted for about two years.At one time he offered to engage her as a saleslady in the store, but she declined.She, likewise, refused to invest in the business, saying she needed her money for medical services.She had purchased some appliances from the store and was friendly disposed toward the defendant.

On January 27, 1961, the defendant appeared at plaintiff's home and requested a loan of $500.00, which he promised would be repaid in three or four days.Mrs. Hays consented and requested the defendant to fill out a check for her and she would sign it.This was done, except as to the name of the payee on the check, which was left blank, and later the defendant stamped in the name of the corporation.On January 30, 1961, Claterbaugh again came to plaintiff's home and requested an additional loan of $750.00, to which Mrs. Hays again consented.This time the defendant left with plaintiff an instrument which he testified was in the form of a check for $750.00, with the word 'note' written on it.The second check signed by Mrs. Hays was made out in longhand by the defendant, was dated January 28, 1962, and made payable to the corporation.The record discloses that on or about March 5, 1961, the defendant gave to plaintiff a promissory note of the corporation for $1,250.00, payable in twenty-four equal monthly installments, with interest from maturity, and took up the check or note for $750.00.On April 27, 1961, plaintiff received and cashed a money order in the name of Madison Park Appliance and Furniture, Inc.Thereafter no further payments were made on the indebtedness and when all of the merchandise was removed from the store, plaintiff sought legal advice.

The foregoing recitation of circumstances surrounding the two transactions is not in dispute.Plaintiff, however, earnestly insists the defendant represented to her the money was for the purpose of paying the defendant's income taxes, and the loans she made were personal loans to the defendant which he persuasively stated would be repaid in three or four days.The defendant testified he explained to Mrs. Hays that the money was being borrowed for the purpose of paying salaries, obligations and taxes of the corporation.

In explanation of the disbursement of the money received from plaintiff, Claterbaugh testified that he used a substantial part of it to repay a debt to Ted Robinson, from whom he had borrowed to pay rent on the building, and the balance went for merchandise.Defendant testified that at the time he borrowed the money he needed it for 'taxes coming up, and I had to pay the rent, salaries and bills, and everything like that.'Defendant's testimony indicates clearly the business was in the red when he borrowed from Mrs. Hays and that it completely folded up in March.On the occasion when he took Mrs. Hays the note payable in twenty-four months, she told him she would like for it to be paid sooner.He testified:

'* * * So I had some stock that I owned outright and I told her that I was going to sell it and do all I could to pay on it, and so she said: 'Well, just as soon as you can pay me back, pay me back then.'When the distributors found out that I owed--my corporation owed quite a bit of money, they took the stock.'

It is our appreciation of the testimony, taken as a whole, that Mrs. Hays believed she was making a loan to the defendant individually.She would not have been under this...