KAM, Inc. v. White
| Decision Date | 13 August 1984 |
| Docket Number | Nos. 13131,13148,s. 13131 |
| Citation | 675 S.W.2d 459 |
| Parties | 39 UCC Rep.Serv. 1342 KAM, INC., Plaintiff-Respondent-Appellant, v. Robert D. WHITE and Bessie P. White, Defendants-Respondents, and Susan Butler, Defendant-Appellant. |
| Court | Missouri Court of Appeals |
David C. Humphreys, Joplin, for plaintiff-respondent-appellant; Blanchard, Van Fleet, Martin & Robertson, Joplin, of counsel.
John Sims, Ruyle, Sims & Lampo, Neosho, for defendants-respondents.
F. William Joyner, Miller, Sanford, Joyner, Westbrooke & Tyndall, Robert E. Almirall, Springfield, for defendant-appellant.
Defendant, Susan Butler, appeals from the trial court's judgment against her in favor of plaintiff, KAM, Inc., following jury trial, in the sum of $14,008.02. KAM cross-appeals the trial court's order directing a verdict in favor of defendants, Robert and Bessie White, which order was entered at the close of plaintiff's evidence. We affirm.
Evidence sufficient to support the trial court's judgment and its order directing a verdict in favor of the Whites was that on November 27, 1973, KAM sold its interest in a business known as the "Bay Mule", a liquor store and delicatessen, to the Whites. In the transaction, the Whites received all furniture, fixtures and inventory in the store, plus the assignment of a lease on the premises which were located at 2629 Main Street in Joplin, Missouri. As consideration for the sale, the Whites executed a promissory note in the sum of $17,000 payable to KAM at the rate of $206.26 a month.
On February 24, 1977, the Whites sold the furniture and fixtures in the establishment and assigned their interest in the lease to Susan Butler. She established a flower shop on the premises called the "Flower Cart." The bill of sale from the Whites, which was delivered to Susan, contained the following language:
"This sale is made subject to the existing loan on the above described merchandise, payable to KAM Inc., which Susan Butler assumes and agrees to pay in addition to the $600.00 cash paid with the signing of this agreement."
In the lower left-hand corner of the bill of sale, the following language appears:
Ms. Butler made payments on the note until November 9, 1977, when she sold the flower shop to Julia Hammar, an employee of Susan's at the flower shop. A written contract for the sale of the business was entered into and executed by Susan and Julia. In the contract, Julia agreed to assume the KAM note and the existing lease, and to hold Susan harmless from liability on both.
Julia made payments on the note until November 2, 1978, at which time the unpaid balance was $10,666.08. After collection attempts were to no avail, KAM sued the Whites and Susan Butler for the unpaid balance plus interest and attorney fees. In their answer, the Whites pleaded release, by reason of Jennings' agreeing to the assignment of the note obligation to Susan. In her answer, Susan pled the statute of frauds as a defense. She also filed a third-party petition against Julia Hammar, alleging Julia had assumed and agreed to pay the note. The petition against Julia was dismissed, after she was discharged from liability on the note by reason of bankruptcy.
On appeal, Susan alleges that the trial court erred in overruling her motion for directed verdict because the liability sought to be imposed amounted to answering for the debt of another, which was not evidenced by a written agreement in violation of the Statute of Frauds, § 432.010, 1 and the Uniform Commercial Code, § 400.3-401(1).
Susan did not raise the applicability of § 400.3-401(1) at trial or in her post-trial motions. An issue not presented to or expressly decided by the trial court in a jury-tried case is not preserved for appellate review. Turcol v. Shoney's Enterprises, Inc., 640 S.W.2d 503, 507 (Mo.App.1982); Ohlendorf v. Feinstein, 636 S.W.2d 687, 690 (Mo.App.1982). Nevertheless, ex gratia review of the point reveals it to lack merit. § 400.3-401(1) states that "[n]o person is liable on an instrument unless his signature appears thereon." Official Uniform Commercial Code Comment 1 explains the effect of the statute:
Missouri cases have recognized that the underlying obligation may provide the basis for a cause of action quite apart from an instrument securing the obligation. Burk v. Walton, 337 Mo. 781, 86 S.W.2d 92, 94 (1935); Reifeiss v. Barnes, 192 S.W.2d 427, 430 (Mo.App.1946); see also § 400.3-802(1)(b). Accord, McClung v. Saito, 4 Cal.App.3d 143, 84 Cal.Rptr. 44, 48 (1970). Thus, the fact that Ms. Butler did not sign the note itself is of no avail.
Contra to Susan's contention, the statute of frauds is not applicable under the facts of this case. An oral agreement or promise, if original, is enforceable; if collateral, it is not. An agreement or promise is original if credit is given by the promisee to the promisor with the main purpose of the promisor being to gain advantage for himself, or promote an interest or purpose of his own, rather than becoming a guarantor or surety of another's debt, and the agreement is made upon a consideration beneficial to the promisor. Galemore Motor Co., Inc. v. State Farm Mut. A. Ins. Co., 513 S.W.2d 161, 166[7-9] (Mo.App.1974).
The evidence adduced at trial, shows that Susan's promise was original and not within the statute of frauds. Her assumption of the obligation to plaintiff was not that of a guarantor or surety, but was part of her purchase of the Whites' business. Such was the nature of her "main purpose" in assuming the responsibility for repayment of the debt. See also, Burk v. Walton, 337 Mo. 781, 86 S.W.2d 92, 95 (1935). The point is denied.
Next, Susan alleges that the evidence on the issue of her assumption of the note was not clear, cogent...
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