J.R. Watkins Co. v. Oldfield

• Decision Date: 04 October 1943
• Docket Number: No. 38521.,38521.
• Citation: 174 S.W.2d 142
• Parties: THE J.R. WATKINS COMPANY, a Corporation, Appellant, v. ED J. OLDFIELD, O.P. CUSHMAN, and LOLA M. CUSHMAN.
• Court: Missouri Supreme Court

174 S.W.2d 142

THE J.R. WATKINS COMPANY, a Corporation, Appellant, v. ED J. OLDFIELD, O.P. CUSHMAN, and LOLA M. CUSHMAN.

No. 38521.

Supreme Court of Missouri.

Division Two, October 4, 1943.

Appeal from Howell Circuit Court. — Hon. Gordon Dorris, Judge.

REVERSED AND REMANDED (with directions).

J.L. Bess for appellant.

(1) It is a fundamental principal of law that: One who depends on fraud or misrepresentations must plead it in no uncertain terms. Sugg v. Klow, 17 Mo. 359, 26 C.J. 1071; Nichols v. Stevens, 123 Mo. 96; 45 Am. St. Rep. 514; Thompson & Co. v. Conran-Gideon, 19 S.W. (2d) 1050; Watkins v. Prudential Ins. Co., 151 S.W. (2d) 462; Schrabauer v. Schneider, 25 S.W. (2d) l.c. 533. (2) It is necessary that the same evidence support both the original and the amended pleading and could be submitted under either. Otherwise it is held a departure and a substitution of another cause of action or defense. Scoville v. Glasner, 79 Mo. 449; Liese v. Meyer, 143 Mo. 547; Jacobs v. Chicago P. & St. L.R. Co., 204 S.W. 954; Meyer v. Glick, 295 S.W. 844. (3) Neither is it permissible for a party to plead a general denial and also confession in avoidance. He cannot deny the transaction and then plead fraud or misrepresentation as a separate defense. Adams v. Trigg, 27 Mo. 141; State ex rel. v. Matson, 38 Mo. 489; Brown v. Emerson, 155 Mo. App. 459, 134 S.W. 1108; Caldwell v. N.Y. City Ins. Co., 245 S.W. 602. (4) The plea of misrepresentation, even if it had not been joined and in contradiction with the general denial, was not sufficient in form to constitute a valid defense. Moler v. American Life Ins. Co., 111 U.S. 335; Aloe v. Mutual Reserve, 147 Mo. 561; Simpson v. Met. Life Ins. Co., 263 S.W. 521. (5) It was improper to permit defendants to testify to the claimed misrepresentations as to what the written instrument they signed was without first showing by competent evidence that Oldfield had authority from plaintiff to represent it in that particular, and/or the plaintiff knew of and assented thereto. Mathes v. Switzer, 173 Mo. App. 239, 158 S.W. 729; National Safe Deposit Co. v. Hibbs, 229 U.S. 391; General Motors Acceptance Corp. v. Holland, 30 S.W. (2d) 1087. (6) Burden is on party alleging fraud to prove it. Sheppard v. Travelers Protective Assn., 124 S.W. (2d) 528; Saginaw Medicine Co. v. Dykes, 238 S.W. 556; Schrader v. Westport Ave. Bank, 156 S.W. (2d) 753; Globe v. Miller, 131 S.W. (2d) 240. (7) The trial court should not have permitted incompetent matter to be constantly brought to attention of jury all through the trial. It should have first required defendants to prove by competent evidence that Oldfield was plaintiff's authorized agent. The law does not indulge the presumption that agency exists, nor can it sustain forced, strained or distorted assumptions from mere possibilities, contrary to all the evidence on the subject. 89 A.L.R. 888; 10 R.C.L., p. 898; 2 C.J., sec. 692, p. 938; Whiteside v. United States, 93 U.S. 247; St. Louis v. Gorman, 29 Mo. 593, 63 A.L.R. 984; 2 Am. Jur., sec. 350, p. 272; Schmidt v. Shaver, 196 Ill. 108; Perkins v. Headley, 49 Mo. App. 556; Elmer v. Flett, 297 S.W. 985; Kaden v. Moon Motor Co., 26 S.W. (2d) 812. (8) While the authorities are divided on the subject as to what constitutes submissible presumptive agency, we fail to find any case sustaining the jumping at conclusions, in absence of some kind of competent and positive evidence to support it, and submitting mere possibilities or suspicions to the jury, in face of positive evidence to the contrary. McConnon & Co. v. Haskins, 180 S.W. 21; J.R. Watkins Co. v. Holloway, 181 S.W. 602; Hunter v. Hunter, 39 S.W. (2d) 359. (9) It was the duty of the trial court to strike out and take from the jury, consideration of defendant's testimony regarding claimed misrepresentations made by Oldfield, without the knowledge or consent of appellant or authority from it so to do. Avery v. Powell, 174 Mo. App. 628, 161 S.W. 335; Phoenix Mut. Life v. Goesling, 121 S.W. (2d) 182; Moore v. Dickenson, 137 S.W. (2d) 495. (10) It is the duty of the court to direct a verdict in absence of competent evidence to submit to jury. Keppler v. Wells, 238 S.W. l.c. 429; Studivant Bank v. Houck, 215 S.W. 758; Fels v. Pollock, 149 S.W. (2d) 356.

Green & Green for respondents.

(1) General denial may be coupled with plea in avoidance without confession, unless latter plea is inconsistent with general denial. Excelsior Steel Furnace Co. v. Smith, 17 S.W. (2d) 378. (2) The test of the consistency of defenses is whether or not the proof of one defense necessarily disproves other. Finley v. Williams, 29 S.W. (2d) 103; Corden v. Thompson, 62 S.W. (2d) 882; Vaughn v. Conran, 20 S.W. (2d) 968. (3) Objection that amended answer was departure from original answer is waived by proceeding to trial. Lee v. Battery Co., 23 S.W. (2d) 45; Denny v. Guyton, 40 S.W. (2d) 562; Younger v. Evers, 64 S.W. (2d) 936; Dyer v. Harper, 77 S.W. (2d) 106; Weil v. Richardson, 24 S.W. (2d) 175. (4) To avail one's self of error in granting amendment to pleading, the party objecting should stand on the ruling since he waives objections by pleading to amendment, by going to trial thereon or by otherwise recognizing amended pleading. Field v. Dowling, 122 S.W. (2d) 30; Harg's v. Denny, 117 S.W. (2d) 368; Beebe v. Columbus Azel Co., 117 S.W. (2d) 624. (5) Where the defense to action is based on fraud in the factum, the issue of agency is not involved. J.R. Watkins v. Thompson, 93 S.W. (2d) 1100. (6) Where the allegations of a petition are denied and evidence is introduced to sustain the issues joined defendant is entitled to have the jury pass upon the issues though defendants offer no evidence on their part. Finch v. Heeb, 107 S.W. (2d) 962; Milliken v. Com. Co., 202 Mo. 637; Reynolds v. Hood, 209 Mo. 611; Gregory v. Chambers, 78 Mo. 294. (7) Contract of suretyship must be strictly construed to impose on surety only those burdens clearly within its terms. School District v. Bank, 26 S.W. (2d) 785; Texas Co. v. Max, 36 S.W. (2d) 122; City v. Co., 122 S.W. (2d) 20; Globe Corp. v. Miller, 131 S.W. (2d) 340; Southern Real Estate Co. v. Surety, 184 S.W. 1030; Citizens Trust Co. v. Lindle, 199 S.W. 1025; Watkins Co. v. Thompson, 93 S.W. (2d) 1100; Lange Co. v. Freeman, 13 S.W. (2d) 1092. (8) Estoppel and waiver are affirmative defenses and should be pleaded. Ambruster v. Ambruster, 31 S.W. (2d) 84; Blockinston v. Russell, 44 S.W. (2d) 22; Greene v. Spitzer, 123 S.W. (2d) 57. (9) The real and ultimate question in such instances is whether the fraudulent acts and statements were of such nature that the other party had the right to rely on them. If they were, there is no negligence; if not there was no actionable fraud. Hence it is misleading to say the evidence must show fraud plus absence of negligence. Or putting it another way, some of the authorities say that fraud is actionable when it induces the negligence. Poe v. Illinois Central R. Co., 63 S.W. (2d) 779; State ex rel. Brown v. Trimble, 23 S.W. (2d) 162; Ensler v. Mo. Pac. R. Co., 23 S.W. (2d) 1034; Laird v. Keithley, 201 S.W. 1138.

WESTHUES, C.

Plaintiff corporation filed this suit to recover $675.54 from respondents O.P. Cushman and Lola M. Cushman on a surety contract. A trial resulted in a verdict for the defendants and plaintiff appealed. The Springfield Court of Appeals, to which court the case was sent, reversed the judgment and ordered the trial court to enter a judgment for plaintiff. The court deeming its ruling to be in conflict with a ruling made by the Kansas City Court of Appeals in the case of Watkins Co. v. Thompson, 230 Mo. App. 482, 93 S.W. (2d) 1100, certified the case to this court for determination.

The facts briefly stated, as revealed by the record, are: The defendant, E.J. Oldfield, desired to sell at retail merchandise to be purchased from plaintiff corporation located in Winona, Minnesota. He went to defendants O.P. Cushman and Lola M. Cushman, who were husband and wife, to have them sign an agreement guaranteeing to plaintiff company payment for goods to be purchased by him between the dates of December 29, 1936, and April 1, 1938. The Cushmans signed the contract of guaranty and thereafter the company sold and delivered to Oldfield merchandise totaling $1411.71. Oldfield failed to pay $675.54. This suit was then filed against the Cushmans to collect on the guaranty contract. The court of appeals found, and correctly so, that the Cushmans were not liable for merchandise sold after April 1, 1938, which amounted to $20.76.

[1] The defense as interposed was that the signatures to the guaranty contract were obtained by fraud. O.B. Cushman testified that Oldfield informed Mrs. Cushman and himself that the paper writing was nothing more than a recommendation to the company; that Oldfield was in a hurry; that his, Cushman's eyesight was bad; that it was a cloudy day and he could hardly read the fine print so signed on the strength of what Oldfield had told him. After the Cushmans had signed the contract, and before any merchandise was sold to Oldfield, they received a letter from plaintiff corporation advising them that they had been accepted as guarantors for the payment of goods to be sold to Oldfield. Respondent Lola M. Cushman testified that when they received the letter, "That was the first I knew that I had signed the bond. I did not know what to do, I let matter drift along until sued." The court of appeals was correct in ruling that under the pleadings and evidence the trial court should have directed a verdict for plaintiff. Both respondents were able to read and write and to understand the nature of the contract they had signed. Even if Mr. Cushman's eyesight was poor his wife was present and could easily have read the paper they were asked to sign. In addition to that plaintiff notified them before parting with any of its property that they had signed a contract of guaranty for Oldfield. In the...