Motor Transp. Springfield v. Orval Davis Tire Co., Inc.

• Decision Date: 05 July 1979
• Docket Number: No. 10697,10697
• Citation: 585 S.W.2d 195
• Parties: MOTOR TRANSPORTATION SPRINGFIELD, Appellant, v. ORVAL DAVIS TIRE CO., INC., Respondent.
• Court: Missouri Court of Appeals

Page 195

585 S.W.2d 195

MOTOR TRANSPORTATION SPRINGFIELD, Appellant, v. ORVAL DAVIS TIRE CO., INC., Respondent.

No. 10697.

Missouri Court of Appeals, Southern District, Division One.

July 5, 1979.

Motion for Rehearing or to Transfer Denied July 31, 1979.

Application to Transfer Denied Sept. 11, 1979.

William A. R. Dalton, B. H. Clampett, Daniel, Clampett, Rittershouse, Dalton & Chaney, Springfield, for appellant.

Harold J. Fisher, David L. Smith, Woolsey, Fisher, Whiteaker & Stenger, Springfield, for respondent.

FLANIGAN, Chief Judge.

Plaintiff, by written agreement, leased to defendant a 1973 International Harvester diesel tractor for a period of one year commencing February 13, 1974. Defendant used the vehicle for almost 11 months and on January 3, 1975, gave plaintiff written notice of its intent to cancel the lease. At the time of cancellation, in accordance with the provisions of the lease, defendant tendered to plaintiff "an additional 10 percent cancellation charge on the total amount invoiced to date of cancellation." The 10 percent amounted to $975.75. The tractor was returned to plaintiff on January 10, 1975.

Plaintiff refused to cash defendant's check representing the tendered amount of $975.75 and took the position that the amount owing plaintiff under the lease, in addition to the sums defendant had previously paid on a monthly basis, amounted to $6,994.47. The lease also provided that the lessor was entitled to "all costs and expenses, including reasonable attorney's fees, in collecting amount due from lessee." The parties stipulated that a reasonable attorney's fee would be $1,200. The petition sought $6,994.47 plus attorney's fees.

Defendant's answer admitted execution of the written agreement and alleged that plaintiff had refused defendant's tender of $975.75. The answer also pleaded that plaintiff's employee, Don Boyer, had told defendant that, upon cancellation, defendant's sole additional responsibility would be 10 percent of the total amount invoiced to date of cancellation. Defendant sought reformation of the lease so that, as reformed, it would be in accordance with Boyer's oral representation. That representation was the factual basis upon which several defensive theories, including fraud and mutual mistake, were pleaded.

The trial court, sitting without a jury, found that the lease "plainly" called for the amount demanded by plaintiff. However, the trial court also found that the lease should be reformed "because of mutual mistake." The judgment of the trial court awarded plaintiff $975.75. Plaintiff appeals.

Review of this court-tried case is governed by Rule 73.01 ¹ par. 3, as construed in Murphy v. Carron, 536 S.W.2d 30, 32(1) (Mo. banc 1976).

Essentially, it is the position of plaintiff that the trial court erred in not granting Defendant's brief as respondent here seeks to uphold the judgment of the trial court on the ground of mutual mistake.

plaintiff the relief prayed for by the petition because: (a) the provisions of the lease were plain, (b) under the undisputed evidence, defendant operated the tractor for 52,124 miles, thereby entitling plaintiff to the sum of $6,994.47 ² and (c) the evidence is insufficient to relieve defendant from its obligations under the lease based on the alleged defenses of fraud or mutual mistake.

Plaintiff's appeal is meritorious.

The agreement between the parties consists of three parts: Vehicle Lease Agreement (four printed pages), Schedule A (one page), and Schedule B (one page). All three parts were signed on behalf of defendant by its vice president Warren Davis on February 13, 1974, in Bolivar. The three parts had previously been signed, on behalf of the corporate plaintiff, by one of its officers, Laurence Kuda, in St. Louis. Pertinent portions of the three parts are set forth below. ³ Defendant operated the vehicle for 52,124 miles in slightly under 11 months. Under Schedule A, where the mileage is less than 100,000 per year, the rate is 18.6 cents per mile for the miles operated plus 12.9 cents per mile for the difference between 100,000 miles and the miles actually operated. The parties, and the trial court, have used the term "deficit mileage" in referring to the 12.9 cents portion of the combination rate.

Defendant's answer claimed that paragraph B of Schedule B "superseded the deficit mileage provisions in Schedule A." That position is untenable. Paragraph B of Schedule B replaces, as it plainly says, Article 6, Paragraph A of the vehicle lease agreement. Indeed, if the deficit mileage provisions of Schedule A were deleted, there would be No prescribed mileage rate under the instant facts because the 18.6 cents rate comes into play only if the vehicle is driven 100,000 miles in one year.

The trial court in its judgment said: "According to the contract as written, the plaintiff would be entitled to the full amount of the prayer of its petition, with interest and attorney's fees. The contract plainly calls for 'deficit mileage' even though the contract is cancelled in the first year."

Defendant in its brief as respondent has not attacked the soundness of that finding. This court agrees with the trial court that the agreement is plain. The only reasonable construction of it is that which the plaintiff claims, the trial court found, and defendant does not here dispute.

The controlling issue is whether or not certain statements made by plaintiff's salesman, Don Boyer, to defendant's vice president, Warren Davis, constitute a defense to plaintiff's demand which is otherwise clearly due.

Testimony concerning the content of Boyer's statements came from defendant's witnesses Warren Davis, Robert Sawyer and two other employees of defendant. The trial court received the testimony of the four witnesses subject to the continuing objection of plaintiff.

Defendant employed approximately 40 people and did an annual business of $2,000,000 to $3,000,000. In its operations, in addition to the tractor leased from plaintiff, defendant used about 15 trucks which it owned. Warren Davis, who was 40 years old at the time of his negotiations with Boyer, was defendant's vice president and "active manager." Davis had worked for the defendant since he graduated from Drury College, 15 years earlier, with a degree in economics and business administration.

As the principal witness for defendant, Davis, on direct examination, was asked what Boyer had told Davis, prior to the signing of the agreement concerning "the obligations of (defendant) if this lease agreement were cancelled prior to it being in existence for the full year." This testimony ensued:

"A. Well, when he tried to get us to sign the lease the first time, we refused to sign it because of the 100,000 miles so the proposal was, if there was a 10 percent clause for cancellation at any time prior to the one year, added to the lease where the only liability we had, provided we cancelled before the termination of the lease, we would pay 10 percent only, 10 percent of the billing to date, which was $9,757.00 and we would be liable for $975.00 upon the time we did terminate and cancel January 3rd, and upon return he explained that the only liability we had was the 10 percent cancellation clause, but

Q. Go ahead.

A. If we used it a full year, run out the full twelve months we would be liable for all.

Q. Including the deficit mileage?

A. Yes. There would be no deficit mileage, just the 10 percent cancellation.

Q. If cancelled prior to the end of the year?

A. Yes."

Defendant elicited the following testimony from its witness Robert Sawyer:

"Q. Were you present during the meeting which Mr. Warren Davis just talked about when that was signed on February 13, 1974?

A. Yes, sir, I was.

Q. What did Don Boyer say regarding the obligation of the Davis Tire Company if the lease was terminated prior to one year?

A. It would be a 10 percent penalty of all monies paid prior to that date.

Q. What, if anything, did Mr. Boyer say regarding the deficit mileage if it was terminated prior to one year?

A. If we terminated prior to one year then the 10 percent would apply; that we could pay 10 percent of the fees we had paid for rental of the truck to that date and that would terminate our contract.

Q. My question was, did he say whether or not you would be obligated to pay deficit mileage?

A. No, sir, he didn't.

Q. He didn't say one way or the other?

A. He said if we cancelled the contract prior to one year that we would be obligated only 10 percent, you know, of the monies paid in on rentals to that point. If we retained the unit the full year then, in turn, we would be billed for the deficit mileage.

Q. If you kept it for one year?

A. If we kept it for one year or the full contract."

Two other witnesses of defendant claimed to have knowledge of what Boyer had told Davis. They were present while Davis and Sawyer testified. These two witnesses testified simply that they had heard the testimony of Sawyer and Davis and that "the testimony of Warren and Bob as to the conversation was what the conversation was with Boyer."

Warren Davis testified, as a witness for the defendant, that his negotiations with From the foregoing it will be seen that the statements allegedly made by Boyer to Warren Davis, upon which defendant relies as its defense, consist of the opinion of a layman with regard to the legal effect of the written agreement in the event defendant, in the future, exercised its cancellation privilege.

Boyer took place over a period of 30 to 60 days before the agreement was signed. Davis knew that the agreement reached with plaintiff had to be submitted to plaintiff's St. Louis office for approval. Davis admitted that he read all three parts of the agreement, signed all three parts, and did not make any changes or deletions.

"One cannot defeat the enforcement of a provision of a deed or contract by a mere showing that the other party Misrepresented its legal effect or gave...