Laney-Payne Farm Loan Co. v. Greenhaw

• Decision Date: 18 June 1928
• Docket Number: (No. 48.)
• Citation: 9 S.W.2d 19
• Parties: LANEY-PAYNE FARM LOAN CO. v. GREENHAW.
• Court: Arkansas Supreme Court

9 S.W.2d 19

LANEY-PAYNE FARM LOAN CO. v. GREENHAW.

(No. 48.)

Supreme Court of Arkansas.

June 18, 1928.

Rehearing Denied September 24, 1928.

Appeal from Boone Chancery Court; Sam Williams, Chancellor.

Action by F. P. Greenhaw against the Laney-Payne Farm Loan Company. Judgment for plaintiff, and defendants appeal. Reversed in part, and affirmed in part.

Appellee instituted this action in the circuit court to recover damages for an alleged breach of contract which he was induced to enter into by false representations of appellants. On motion of appellants the case was transferred to the chancery court and tried there.

F. P. Greenhaw, appellee, was the principal witness for himself. According to his testimony he had been engaged in securing farm loans and in the insurance business for the past ten years. During the month of August, 1923, the pictures of W. H. Laney and M. T. Payne appeared in a daily Arkansas paper with an article announcing them as representatives of a joint stock land bank for 30 counties in the state of Arkansas with office at Little Rock. The firm was called the Laney-Payne Farm Loan Company, and the firm advertised itself as representing the Bankers' Joint Stock Land Bank of Booneville, Mo., which had money to loan or farms. Desiring to represent them, Greenhaw went from his home at Harrison, Ark., to Little Rock, Ark., and became acquainted with W. H. Laney. They began negotiations for Greenhaw to represent the firm in eight counties in Northwest Arkansas. Laney told Greenhaw that they could not enter into a contract with him unless he would agree to purchase $3,000 worth of stock in the Bankers' Joint Stock Land Bank of Booneville, Mo. Laney represented that the stock was good and that he had been to Booneville and made an investigation of the affairs of said bank. Laney then introduced Greenhaw to A. J. Blakey, who was vice president of said bank, and Blakey also represented that the bank was solvent. Greenhaw then entered into a written contract with the Laney-Payne Farm Loan Company on the 27th day of August, 1923. In this contract he agreed to solicit loans in certain designated counties in the state of Arkansas and to bear his own office, traveling, and other expenses incident to securing application for loans and in closing up loans if made. Appellants were to furnish blank forms which had been prepared by the Bankers' Joint Stock Land Bank to be used by its representatives in securing applications for loans. The contract further provided that appellee was to receive one-half of 1 per cent. commission on all loans accepted. Appellee agreed to buy $3,000 worth of stock in the Bankers' Joint Stock Land Bank of Booneville, Mo., through the Laney-Payne Farm Loan Company, paying therefor $1,000 in cash and giving two notes for the balance of the purchase money of said stock. Greenhaw did not desire to invest in said stock and only did so because this was the only way he could secure an agency to solicit farm loans under appellants. Laney expressly stated to Greenhaw that he had been to Booneville and made an investigation of the affairs of said bank and that its stock was good. Greenhaw relied on these representations. He entered upon the discharge of his duties as such agent and secured applications for loans aggregating over $75,000, on which the title to the lands were examined and approved. Appellants did not secure the money on any of these loans, and the bank which was to make the loans in Booneville, Mo., went out of business in May or June, 1924. The bank turned out to be insolvent, and its stock was disposed of at considerably less than par instead of being worth more than par as represented.

W. H. Laney was the principal witness for appellant, and denied having represented to Greenhaw that he had made a personal examination of the affairs of the Booneville bank and knew the value of its stock. Laney testified that Greenhaw talked with an officer of the bank and relied on his representations as to the value of the stock, and that he was not induced to purchase said stock or to enter into the contract sued on by reason of any representations made by Laney as to the value of the stock of the Booneville bank or its ability to produce purchasers for farm loans. Other facts will be stated or referred to in the opinion.

The chancellor found the issues in favor of appellee and rendered judgment...