Medlock v. Farmers State Bank of Texas County, s. 13579
| Decision Date | 27 August 1985 |
| Docket Number | 13580,Nos. 13579,s. 13579 |
| Parties | Sharlene MEDLOCK, Plaintiff-Appellant-Cross-Respondent, v. FARMERS STATE BANK OF TEXAS COUNTY, et al., Defendant-Respondent-Cross-Appellant. |
| Court | Missouri Court of Appeals |
J. Max Price, John D. Beger, Price & Beger, Salem, John S. Beeler, Houston, Ronald D. White, Rolla, Thomas Hearne, Steelman, Hearne & Hearne, Salem, Joseph W. Rigler, Vienna, for plaintiff-appellant-cross-respondent.
Michael H. Maher, Schulz, Bender, Maher & Blair, Kansas City, for defendant-respondent-cross-appellant.
These appeals stem from the fact the defendant, Farmers State Bank of Texas County, did not obtain credit life insurance upon the life of the deceased husband of plaintiff, Sharlene Medlock. The underlying dispute was whether the defendant had agreed to cause such insurance to be issued to cover the unpaid balance of a note of the Medlocks payable to the defendant. The note was secured by a deed of trust upon 358 acres owned by the plaintiff and her husband.
The jury returned three verdicts. The first was for the plaintiff on the defendant's breach of such an agreement. It was in the amount of $44,744.38, the unpaid principal and interest of the note. The second verdict was in favor of the plaintiff for actual damages for what the parties have denominated the "attempted wrongful foreclosure" of the deed of trust. That verdict was in the amount of $25,000. The trial court refused to submit the issue of punitive damages by reason of such attempted wrongful foreclosure. The third verdict was upon the counter-claim of the defendant for the unpaid balance of the note. That verdict was in favor of the plaintiff.
Upon the defendant's motion, the trial court set aside the verdict for breach of contract in favor of the plaintiff. The assigned reason was that such verdict was inconsistent with the verdict in favor of the plaintiff upon the counter-claim. By her appeal, the plaintiff contends that action of the trial court was error. She also asserts error in the refusal to submit the issue of punitive damages. By its appeal, the defendant contends the trial court erred in not sustaining its motion for judgment notwithstanding the verdict for $25,000 for attempted wrongful foreclosure. It further asserts error because the trial court did not order a directed verdict on its counter-claim. The appeals have been consolidated for submission and disposition.
A summary of the facts necessary to frame the issues follows. Where necessary, the evidence will be recited in more detail in connection with the point of error being considered. The plaintiff and her husband were longtime customers of the defendant. The plaintiff and her husband lived in the rural community in which the defendant conducted its banking business. They were friends of some of the officers and employees of the bank. The plaintiff and her husband were farmers. Their home was on a 10-acre tract adjacent to the 358 acres, which they farmed. Over the years the husband conducted most of the parties' business with the defendant. Often, after consummating arrangements with the defendant, he would bring home notes for signature by the wife.
The plaintiff and her husband had from time to time borrowed money from the defendant. The loan resulting in the note in question was made on September 30, 1975. The note was in the amount of $31,402.75. The note called for interest at the rate of 9 percent and was due 12 months after date. The face of the note showed that of that amount, $2,283.84 was applied to prepaid interest, $570.96 to credit life insurance and the proceeds to the plaintiff and her husband were $28,547.98. At the bottom of the note a printed request for credit life insurance was "checked," with the notation, "age 43." There was an insurance agency in the bank owned by the holding company that owned the defendant. The defendant caused the request for credit life insurance to be issued through that agency.
In 1977, the plaintiff's husband commenced work on oil rigs in the Gulf of Mexico. By necessity, he was away from home for extended periods. Before leaving on one such occasion, the husband gave the wife a check from a cattle buyer for $6,000, the proceeds of the sale of cattle. He asked her to use the check in bringing their loans with the defendant to date. At that time the defendant held four notes executed by one or both of the parties. They were:
Note Number Due Date Amount Signed by
----------- ----------------- ---------- ---------
6814 November 1, 1979 $31,402.78 Both
803 December 29, 1979 11,457.24 Plaintiff
4276 October 5, 1979 4,556.61 Plaintiff
2836 November 27, 1979 2,000.00 Plaintiff
On November 26, 1979, the plaintiff went to the bank to carry out her husband's request. She dealt with Kay Jordan, an assistant cashier. The $6,000 check was deposited in the Medlock account. A check was drawn on that account in the amount of $5,000 payable to the defendant. The check was given to Jordan to be applied to the notes. The plaintiff told Jordan they wanted to renew the farm note, "The way it has always been."
Jordan calculated the interest to date on all notes was $907.40. She suggested the balance of the $5,000 be applied to pay note No. 2836 in full and to reduce the principal balance of note No. 4276. The plaintiff was aware of the fact they had carried credit life insurance on her husband's life in connection with note No. 6814. Because of the amount of prior premiums for that credit life insurance, the plaintiff was surprised at the amount available to be applied upon the principal of the notes. Jordan said she was sure her calculation was correct. The plaintiff agreed to the suggested application of the funds.
Jordan prepared three extension agreements for the notes not paid. The extension agreement pertaining to note No. 6814 extended the due date to November 1, 1980. It further provided for interest at the rate of 11.4 percent from the date thereof. It contained the printed statement, "All terms and conditions of the original note and any security thereto attached is fully incorporated herein and fully ratified except as specifically modified by this renewal agreement." Upon presenting the extension agreement to the plaintiff, after it had been signed by a bank officer, Jordan said everything will be the same except the interest would be 11.4 percent. The plaintiff signed the agreement without reading the printed statement. The plaintiff's husband signed the extension agreement the following week.
Plaintiff's husband was killed in a automobile accident on April 8, 1980. For many years prior to the purchase of the defendant by a holding company in 1978, E.L. Daugherty was chief executive officer of the defendant. After that time he was employed by the defendant in a limited capacity. He was a pallbearer for plaintiff's husband. Daugherty stopped at the Medlock home on his way to the funeral service. He asked the plaintiff if there was anything he could do. The plaintiff told him he could check and see what she needed for the credit life insurance. After checking at the bank, he returned to the Medlock home. He told the plaintiff there must be a mistake somewhere; he could not find any evidence of credit life. After November 1, 1980, the plaintiff received a notice demanding payment of note No. 6814. She did not make that payment. Attorneys for the plaintiff asked the defendant to cancel the note. The defendant obviously refused and caused notice to be published that the deed of trust on the 358 acres would be foreclosed by sale by the trustee on January 5, 1981. The plaintiff obtained a restraining order against that foreclosure sale.
The error asserted by the defendant's first two points is the failure of the trial court to sustain its motion for judgment notwithstanding the verdict for $25,000 for actual damages for attempted wrongful foreclosure. That verdict was rendered in response to the following instruction:
Your verdict must be for plaintiff and against defendant Bank of Raymondville now known as Farmers State Bank of Texas County if you believe:
First, that plaintiff and her husband Frank Medlock, Jr., entered into an agreement with the defendant Bank of Raymondville now known as Farmers State Bank of Texas County and the defendant breached that agreement as submitted in Instruction No. 7.
Second, as security for the promissory note, plaintiff and Frank Medlock, Jr. gave defendant Bank of Raymondville now known as Farmers State Bank of Texas County a deed of trust to their farm in Texas County, Missouri.
Third, that the note and deed of trust would not have been in default but for the defendant's failure to obtain credit life insurance on the life of Frank Medlock, Jr.
Fourth, that defendant knew that the note and deed of trust being in default was a direct consequence of their failure to obtain credit life insurance on the life of Frank Medlock, Jr.
Fifth, that the defendant intentionally began to foreclose, under the deed of trust, on the farm belonging to plaintiff.
Sixth, that plaintiff was thereby damaged.
As noted, the trial court entered judgment for the defendant on the issue of damages for breach of the agreement notwithstanding the verdict for the plaintiff for $44,744.38. The defendant first argues this was a conclusive determination the evidence was insufficient to establish the agreement submitted in Instruction No. 10. That action of the trial court did not constitute such a determination. As stated by its order, that action was taken because the trial court determined that verdict was inconsistent with the verdict on the defendant's counter-claim.
The defendant next argues that in fact the evidence was insufficient to establish that agreement. To support that argument, the defendant emphasizes evidence such as the...
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