Means v. Clardy, WD38768
| Decision Date | 19 May 1987 |
| Docket Number | No. WD38768,WD38768 |
| Citation | 735 S.W.2d 6 |
| Parties | 5 UCC Rep.Serv.2d 119 Rick L. MEANS and Fred C. Barry, Appellants, v. Nancy CLARDY, William Bruce Clardy, John A. Gross, Zurich Insurance Company, Gary Doerhoff and Joan Doerhoff, Respondents. |
| Court | Missouri Court of Appeals |
Robert L. Hyder, Jefferson City, for appellants.
Charles J. Fain, Dale C. Doerhoff, Curtis G. Hanrahan, Thomas D. Graham, Jefferson City, for respondents.
Before GAITAN, P.J., and SHANGLER and MANFORD, JJ.
Plaintiffs, Rick Means and Fred Barry, appeal the judgment in this court-tried case in favor of defendants, Gary Doerhoff, Joan Doerhoff, Nancy Clardy, Bruce Clardy, John Gross, and Zurich Insurance Company, in their action to collect on a promissory note, and to collect damages against a notary and his bonding company for making a false affidavit. Plaintiffs claim that the trial court's judgment is erroneous as a matter of law. The judgment of the trial court is affirmed in part and reversed in part.
On October 11, 1979, defendants Gary and Joan Doerhoff signed a Bill of Sale transferring their cabinet business, known as Ozark Cabinet and Millwork Shop, to defendant, Nancy Clardy. As part of the sale, the Doerhoffs received a note dated October 12, 1979, in the amount of $31,000, purportedly signed by Nancy Clardy.
The note stated that $5000 was to be paid on October 25, 1979. The balance of the note was to be paid in monthly installments of $1250 "to be paid in cabinets figured at the prevailing builders price for Jefferson City ... until October 12, 1981, at which time the entire balance thereof is due and payable in cash ..."
Subsequently, on July 18, 1980, plaintiffs sold a four-plex to Gary and Joan Doerhoff in exchange for 6.81 acres of land and the Nancy Clardy note. The Doerhoffs did not endorse the note but merely delivered it, along with the Bill of Sale to which the note was attached, to plaintiffs. The balance due on the note at that time was $21,882 since several of the monthly installments were in arrears. Plaintiffs were aware that all of the payments had not been made on the note. Plaintiffs were not concerned because they thought interest was accruing on the past due amounts and that the balance of the note would be paid in full in cash on October 12, 1981.
Although the note was delivered to plaintiffs, the Doerhoffs continued to receive the cabinets which were delivered as payments on the note. Under the contract between plaintiffs and the Doerhoffs, the Doerhoffs were to pay plaintiffs the cash value of any cabinets received under the note. The contract stated:
Buyer [Doerhoffs] agree to buy cabinets from Ozark Cabinet Shop per agreement stated in the Note from Nancy Clardy as long as Ozark Cabinet Shop will furnish said cabinets until October 12, 1981. Buyer also agrees to get a statement of value of the cabinets from Ozark Cabinet shop and pay the sellers [plaintiffs] the amount of said statement in cash within 15 days after delivery of each set of cabinets.
During the negotiations between plaintiffs and the Doerhoffs, Mr. Doerhoff took plaintiffs by the cabinet shop. Mr. Doerhoff informed plaintiffs that Nancy Clardy's son, Bruce Clardy, managed the shop, but that Nancy was the owner. Neither Bruce or Nancy Clardy was at the shop that day. Plaintiff Means testified that Mr. Doerhoff said that Nancy Clardy had signed the note and that he would not have accepted it without her signature since he knew of her sound financial condition.
Mr. Means testified that Mr. Doerhoff asked plaintiffs not to contact Nancy Clardy about the transfer of the note because it might "throw a monkey wrench in the deal." Mr. Means also testified that Mr. Doerhoff said that Mrs. Clardy had made the $5000 payment that was due under the note.
Plaintiffs said that they never contacted Nancy or Bruce Clardy prior to closing the sale of the four-plex to the Doerhoffs. Plaintiffs did check with the financial institutions wherein Mr. Doerhoff said that Nancy Clardy had money, and were informed that she was a good credit risk.
From July 18, 1980 until the spring of 1981, plaintiffs received only two payments totalling $800 from the Doerhoffs. Then in the spring of 1981, plaintiffs were informed by Bruce Clardy that the cabinet shop was "going under." Plaintiff Means said that he told Mr. Clardy that he would expect Mrs. Clardy to pay the note in full on October 12, 1981. Mr. Clardy then told Mr. Means that the signature on the note was not really Nancy Clardy's.
Bruce Clardy then filed for bankruptcy. Plaintiffs said that they attempted to contact Nancy Clardy but were unsuccessful. Plaintiffs' attorney wrote to Mrs. Clardy on May 26, 1981, inquiring about the note. Mrs. Clardy's attorney wrote back that Mrs. Clardy denied making the note.
Mrs. Clardy testified that she did not sign the Bill of Sale or the note. She stated that her son, Bruce, told her that he had signed her name to the documents. She did not remember exactly when he told her this.
Mrs. Clardy did not contact Mr. Doerhoff or plaintiffs when she learned that Mr. Clardy had signed her name. She also testified that she had learned, after-the-fact, that Mr. Clardy used $5000 from a remodeling fund in order to pay the initial $5000 due on the note. Mrs. Clardy had authorized Mr. Clardy to draw upon the fund to remodel an investment property which she owned. She did not authorize him to use the money to pay the note for the cabinet shop.
Nancy Clardy's signature on the Bill of Sale was notarized by defendant John Gross. The Bill of Sale referred to the "attached note" but the parties could not remember whether the note was actually attached at the time the signatures on the Bill of Sale were notarized. The date at the top of the note was one day later than the date on which the Bill of Sale was notarized. John Gross testified that Mrs. Clardy did not sign the Bill of Sale or the note in his presence. Mr. Gross said that he notarized the Bill of Sale on the assurance of Bruce Clardy that Mrs. Clardy had signed it.
A witness, Jeff Hearns, testified that he was in the office at the time the Bill of Sale and note were signed. He stated that he recalled that the signatures were placed on the documents by Bruce Clardy and Mr. Doerhoff.
Mr. Doerhoff testified that he did not remember whether he was present when the Bill of Sale was notarized. He was sure that he did not know that Mr. Clardy had signed Mrs. Clardy's signature. He stated that he thought Bruce Clardy was acting for his mother in the negotiations. He admitted, however, that he never had any discussions about the sale with Mrs. Clardy even though he often called her house looking for Mr. Clardy.
Bruce Clardy took the Fifth Amendment when asked whether he had signed the note. He stated that Mr. Doerhoff brought the Bill of Sale and note to the office and that the note "was never taken out of his [Mr. Doerhoff's] presence." Since Mr. Clardy would not testify as to who signed the note, he never stated whether Mr. Doerhoff saw him sign his mother's name.
Plaintiffs filed their Petition in three counts. Count I is against Nancy Clardy for payment of the note, or, alternatively, against Bruce Clardy for payment of the note if he signed the note without Mrs. Clardy's authority. Count II is against Gary and Joan Doerhoff for payment of the note. Plaintiffs allege that the Doerhoff's "specifically warranted, orally and by statute ..." that Nancy Clardy's signature on the note was genuine. Plaintiffs' also alleged that the Doerhoffs knew that the signature was not genuine and fraudulently represented that it was genuine. Count III is against John Gross and his bonding company, Zurich Insurance, for falsely acknowledging the signature on the Bill of Sale to which the note was attached.
The trial on plaintiffs' claims was commenced on February 2, 1983. After plaintiffs presented their case, the defendants moved to dismiss. The trial court granted all the defendants' motions, except for defendant Bruce Clardy's, stating that "plaintiffs failed as a matter of law to prove their claim ..." The court retained jurisdiction over plaintiffs' claim against Bruce Clardy and the trial was resumed on July 14, 1986 as to this claim. The trial court found that plaintiffs were not holders of the note and therefore dismissed plaintiffs' claim against Bruce Clardy.
We review this court-tried case under Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.1976), and we must affirm the judgment unless it is not supported by substantial evidence, it is not against the weight of the evidence, or it erroneously declares or applies the law. Brassfield v. Allwood, 557 S.W.2d 674, 677-78 (Mo.App.1977).
Plaintiffs claim that the "uncontroverted evidence" was that the Doerhoffs "transferred the note to plaintiffs by assignment and by delivery and as a matter of law they guaranteed the signature of Nancy Clardy." Plaintiffs rely upon the following provisions of § 400.3-417 RSMo 1986 which states:
(2) Any person who transfers an instrument and receives consideration warrants to his transferee ... that
* * *
* * *
(b) all signatures are genuine or authorized; and
(c) the instrument has not been materially altered; and
(d) no defense of any party is good against him;
* * *
* * *
(Emphasis added)
Initially, we note that § 400.3-102(1)(e) defines "instrument" to mean a negotiable instrument. Section 400.3-104(1) states that in order for a writing to be a negotiable instrument it must, among other things, "contain an unconditional promise or order to pay a sum certain in money, and no other promise, order, obligation or power ..." (emphasis added) The Clardy note was to be paid in cabinets. Therefore, the note is not negotiable and the UCC, including § 400.3-417, is not applicable in...
To continue reading
Request your trial
-
In re Hood
...of the notes to HBC and the latter's subsequent transfer of same to Plaintiff, stands in the shoes of the FDIC. See Means v. Clardy, 735 S.W.2d 6, 10 (Mo.App.1987) (assignee of note may enforce it to same extent as assignor might have enforced note). The Court thus finds that Plaintiff is a......
-
Centerre Bank of Branson v. Campbell
...§§ 400.3-101 to 400.3-805, RSMo 1978, the term "instrument" means a negotiable instrument. § 400.3-102(1)(e), RSMo 1978; Means v. Clardy, 735 S.W.2d 6, 10 (Mo.App.1987). This becomes important when one examines the definition of a holder in due course. Section 400.3-302(1), RSMo 1978, provi......
-
OneWest Bank, FSB v. Nunez
...; see also Holly Hill Acres, Ltd. v. Charter Bank of Gainesville, 314 So.2d 209, 211 (Fla. 2d DCA 1975) ; accord Means v. Clardy, 735 S.W.2d 6, 11–12 (Mo.Ct.App.1987). While it may not be a holder in due course, and other defenses may apply, an assignee may still have enforcement rights und......
-
Means v. Clardy, WD
...A detailed description of the facts in the instant case is given by this court in the first appeal of this action in Means v. Clardy, 735 S.W.2d 6 (Mo.App.1987). Although a restatement of these facts would usually be duplicitous, because of the complicated nature of the events which trigger......