Henrickson v. Drotts

• Decision Date: 10 April 1976
• Docket Number: No. 47910,47910
• Citation: 548 P.2d 465,219 Kan. 435
• Parties: T. R. HENRICKSON, d/b/a Logan Grain Co., Appellee, v. Glen M. DROTTS, Appellant.
• Court: Kansas Supreme Court

Page 465

548 P.2d 465

219 Kan. 435

T. R. HENRICKSON, d/b/a Logan Grain Co., Appellee, v. Glen M. DROTTS, Appellant.

No. 47910.

Supreme Court of Kansas.

April 10, 1976.

Syllabus by the Court

1. The mere fact that both parties move for summary judgment in an action does not constitute a waiver of a full trial or warrant the granting of either motion if the record reflects a genuine issue of fact.

2. The requirements of K.S.A. 60-252 and Supreme Court Rule No. 116 (214 Kan. xxxvii), concerning statements by the district court of controlling facts and legal principles controlling its decision, are for the benefit of this court in facilitating appellate review and may not be waived by the district court or by the parties to the action.

3. In an action to recover on an open running account, wherein a judgment was rendered under the particular circumstances set forth in the opinion, the record is examined and, for reasons stated, the judgment is reversed and the cause remanded for further proceedings.

E. Charles Hageman, Stockton, argued the cause and was on the brief for appellant.

Marion W. Chipmen, Olathe, argued the cause, and Stephen S. Sage, Phillipsburg, and David K. Fromme, of Weeks, Thomas, Lysaught, Bingham & Mustain, Chartered, Overland Park, were with him on the brief for appellee.

KAUL, Justice:

This is an action by plaintiff-appellee, a grain dealer, to recover the balance due on an open running account from defendant-appellant, a farmer and long time customer of plaintiff.

The petition alleged that the defendant owed plaintiff the sum of $18,014.91 as of June 1, 1974, accordng to the account which was annexed to the petition as Exhibit 'A.' Defendant answered plaintiff's petition denying the correctness of the account; alleging the account was outlawed under K.S.A. 63-512; and further alleging that plaintiff had at various and irregular intervals of time illegally charged and added interest to the account at a usurious rate; and further that plaintiff had failed to disclose the rate of interest charged as required by law.

Defendant also filed a counterclaim for the recovery of damages, penalties and attorney fees for alleged violations of the Kansas Uniform Consumer Credit Code (K.S.A. 16a-1-101, et seq.).

Plaintiff was permitted to amend his petition and attach a copy of a promissory note, dated January 3, 1967, in the amount of $7,533.84 which plaintiff alleged was given by defendant in acknowledgment of his indebtedness to plaintiff as of that date.

Defendant answered plaintiff's amended petition admitting the execution of the note, but alleging that it was outlawed under K.S.A.1975 Supp. 60-511; and further denying that the note was an acknowledgment to pay interest to the plaintiff on the open account. Defendant further alleged that the note was given in accord and satisfaction of the open account due as of the date of the note.

After pleadings were filed interrogatories were submitted to plaintiff by defendant pertaining to numerous items appearing on the account ledger and asking plaintiff to state the rate of interest that was charged and entered on the account at numerous entries of the interest posted on various dates throughout the life of the account. Plaintiff answered showing various rates of interest charged and also setting out posting errors and corrections which had been made in the account.

A pretrial conference was had at which it appears the parties agreed that total purchases made during the term of the account amounted to $74,959.54 and total payments of $65,207.06, which left at issue only matters pertaining to the charges for interest. It appears that at the pretrial conference both parties agreed to waive a jury trial and submit the case to the trial court on an agreed statement of facts. In this regard the record reflects:

'THE COURT: Is this a jury case?

'MR. HAGEMAN: I can't see any question for the jury, Your Honor. I think they are all questions of law.

'MR. SAGE: We don't think it is a jury case. We would be glad to submit it to the jurisdiction of the Court and the decision of the Court.'

Apparently, acting in reliance on these statements of counsel, the presiding judge, Honorable Wm. B. Ryan, now deceased, suggested to the parties, and they agreed, to submit an agreed statement of facts for the court's use in ruling on the matter. However, both parties soon came to the realization a mutually agreed upon statement of facts was an impossibility. Thereafter, each party prepared and submitted separate statements of facts, ostensibly attempting to eliminate the necessity of an evidentiary hearing.

Although the statements of facts were in agreement in some particulars, there was numerous discrepancies with respect to material facts. Both parties agreed that interest was first charged to the account in 1961. However, plaintiff contended $66.18 interest was first charged to the account on May 3, 1961, pursuant to an agreement between the parties that one percent of the then existing balance would be charged for interest from the inception of the account up to and including May 3, 1961. According to plaintiff the parties agreed the interest thereafter would be eight percent per annum, as evidenced by a note signed January 3, 1967. It was plaintiff's theory this note was intended as a written acknowledgment of the amount owing on January 3, 1967, and of the eight percent figure for interest previously agreed to, and that the same was treated by plaintiff and defendant as a part of the running account and merged therein.

At the end of 1969 plaintiff's sales tickets bore a disclosure that the interest was to be one percent per month, or twelve percent per year. Plaintiff contends this disclosure, coupled with defendant's tacit acquiescence thereto, altered the previous agreement and establish a new agreed upon interest rate.

On the other hand, in his statement and argument to the trial court, defendant contended he never agreed to pay interest on the open account. He argued the 1967 note was intended as an accord and satisfaction given in lieu of the open account at that date and was uncollectible five years after the due date on January 3, 1968, some nineteen months prior to the filing of this action. Defendant also relied on the fact that plaintiff has not proven any payments of the note that would toll the limitation period of K.S.A.1975 Supp. 60-511.

The conduct of the parties in applying subsequent payments to the open account itself, and not on the note, give support to plaintiff's contention that the note merely evidenced the agreement as to principal and interest on the account and was not given in lieu of the account. Although plaintiff's theory may have appeared more believable to the trial court, the question is one of intent and, unless confessed, is usually an issue of fact.

After briefs and statements were filed, the court entered judgment for plaintiff in the exact amount sued for ($18,014.91) to bear interest at eight percent per annum until paid. No findings of fact or conclusions of law were made. The substance of the trial court's decision is reflected in the following two paragraphs of the journal entry:

'Thereupon it was agreed between the parties that the case be submitted for decision to the court with each party submitting a Statement of Fact and Brief to the court within thirty (30) days from said date. Thereafter, within said thirty (30) day period of time Statement of Fact and Brief was submitted by each, plaintiff and defendant.

'Thereafter, on the 17th day of December, 1974, the court entered its decision in this matter finding that the plaintiff should recover the sum of $18,014.91 from the defendant, same to bear interest at eight per cent (8%) per annum from the 17th day of December, 1974, that the counterclaim of defendant should be denied, and that the costs herein should be taxed to the defendant.'

Defendant filed a motion for a new trial which was presented to the Honorable Marvin W. Meyer, who had become judge of the seventeenth judicial district. At the hearing, which is reproduced in the record, defen...