Public Finance Corp. of Kansas City, Mo., No. 1 v. Shemwell
| Decision Date | 03 April 1961 |
| Docket Number | No. 23242,23242 |
| Parties | PUBLIC FINANCE CORPORATION OF KANSAS CITY, MISSOURI, NO. 1, a Corporation, Respondent. v. Donald T. SHEMWELL, Appellant. |
| Court | Missouri Court of Appeals |
Robert L. Shirkey, Rogers, Field, Gentry & Jackson, Kansas City, for appellant.
Gene R. Martin, Ennis, Browne & Martin, Kansas City, for respondent.
Plaintiff Public Finance Corporation sues defendant Donald T. Shemwell for a claimed unpaid deficiency on a note secured by a chattel mortgage on an automobile remaining after the repossession and sale of the pledged chattel. The case was tried by the court without a jury. Defendant appeals from a judgment in favor of plaintiff in the sum of $455.84.
Defendant principally contends that the judgment should have been in his favor because the note was without consideration. He says the transaction was an attempted sale of the automobile and that the note was given primarily as the purchase price. He urges that since no certificate of title was ever delivered to him by plaintiff, the entire transaction is void and the note is unenforceable.
A prior transaction shown in evidence preceded the present controversy. Defendant was the owner of a 1953 Kaiser automobile. He sold it to one Robert Cupp in January 1956 for the price of $600. Cupp borrowed the $600 from plaintiff on a note for that amount which defendant co-signed. The note was secured by a chattel mortgage given by Cupp on the automobile. Defendant received the $600 as the purchase price and delivered to Cupp the title certificate for the vehicle.
After reducing the loan to $478.27, Cupp defaulted in payments. Plaintiff attempted to locate him but was unable to do so, although his last place of residence was traced to a trailer court in Riverside. Plaintiff's assistant manager Fridel went there in person and found the car sitting beside a trailer. The trailer was locked and a neighbor said Cupp had moved away. Fridel said the car was unlocked and the keys were in it. He got in the car and unsuccessfully tried to start it. The car was left at the trailer court. In an affidavit of repossession plaintiff submitted to the Motor Vehicle Registration Department, it was stated by plaintiff's attorney and agent, on oath, as follows: 'That Robert Cupp defaulted in payment of said indebtedness and Public Finance Corporation repossessed said motor vehicle by legal process or in accordance with the terms of said contract'. The foregoing undisputed evidence leads to these conclusions: Cupp, in default, had abandoned the car at Riverside; plaintiff there took possession of the car, as was its right to do under the terms of Cupp's chattel mortgage; plaintiff thereafter had sole right of possession or disposition of the car and its title; Cupp thereafter had no right of possession and no legal authority to convey the automobile or to assign its title. We are thus brought to the transaction involved in this appeal.
Plaintiff informed defendant of the incidents we have noted and demanded payment of Cupp's note under his liability as a co-signer. After looking for and failing to find Cupp, defendant went to plaintiff's office to discuss the matter. Plaintiff extended him the option of either paying the Cupp note or taking possession of the car and executing his own note for it as a primary obligor. The latter option was chosen by defendant. He had in mind taking the car to use as a second automobile.
On February 18, 1957 defendant executed his promissory note payable to plaintiff in the amount of $704.64, and a chattel mortgage on the automobile as security. The note represented the following items: balance on Cupp loan $478.27; additional loan $77.44; life insurance premium $14.09; chattel mortgage recording fee 20cents; precomputed interest $134.64. The additional loan of $77.44 was advanced to plaintiff, in cash, to repair and rehabilitate the automobile, which Fridel stated was in 'miserable condition'. The entire amount was used and spent on the automobile, together with additional sums of defendant's own money.
Defendant testified that he executed the note at plaintiff's request and on its promise to get and deliver to him a title for the car. He stated that he would not have signed the note except for that assurance. Defendant said that after executing the note he received the keys from plaintiff's employee and was told he could take possession of the car. Plaintiff's employees and officers denied that defendant had been promised a title, that plaintiff ever had possession of the car or its keys, that plaintiff ever sold the car to defendant, and that plaintiff delivered the car to defendant. It was plaintiff's claim that it only promised to help defendant procure a title. Defendant's right to take possession of the car was not disputed.
Next morning defendant picked up the car at Riverside and took it to Stevenson's garage for repairs. He had 'cleaned it all out, and had the fenders and floor and glass fixed, and had all new valves in it, new plugs and points and everything', and installed a rebuilt battery. It was then in 'a lot better condition'. He took the car from Stevenson's garage to his home and never again drove it. He stated 'I never moved that car one inch'. While it was in his possession he washed it and periodically started the motor to charge the battery.
Defendant made the first five note payments in March through July, 1957, each in the sum of $29.36, and the additional sum of $2. He stated that during those five months plaintiff continued to represent to him 'they' were going to get him the title--'about three or four times a month'. Defendant testified he called plaintiff on an average of twice a week about the car title; his wife called them; 'I called them from work, and at home both, I even called Mr. Meier at his home'. Defendant made no further monthly payments after July 1957, but continued to call plaintiff and demand the title certificate. Three employees of plaintiff admitted receiving such calls from defendant. Defendant informed plaintiff he wasn't going to pay any more until he got a title. Plaintiff continued to demand the payments. Finally defendant informed plaintiff that unless the certificate was delivered by a certain date (27 days thence) he wasn't going to pay any more on the automobile. He called plaintiff's office on the designated day, which appears to have been in November 1957, nine months after signing the note and chattel mortgage, and was informed that the certificate still was not available. About ten days later plaintiff tendered the title but defendant refused to accept it. He testified, . Defendant surrendered the car and keys into plaintiff's possession. Plaintiff sold the car seven months later.
The official records of the Motor Registration Department show that on June 28, 1958 plaintiff assigned to one Nathaniel Mosby, as purchaser, the repossessed certificate of title No. 8065533 that was tendered to defendant in November, 1957. Those records also show that on the same day, June 28, 1958, Mosby executed his application for a title to the automobile in which he stated that the sale price was $495. The application showed the source of Mosby's title to be the repossessed Certificate No. 8065533.
Notwithstanding the official records, plaintiff's employees testified verbally, with no corroboration by the alleged vendees, that there were two intervening sales of the automobile prior to the sale to Mosby--all on the same day. The testimony was that (1) Public Finance first sold the car for the price of $100 to Ray DeAtley Motor Sales Company, purchaser number one; (2) DeAtley sold it to Enterprise Motors, purchaser number two; (3) Enterprise Motors sold it to Nathaniel Mosby, purchaser number three, for $495. Plaintiff credited the note in suit with the sum of $100 and brought this suit for the claimed balance due.
Although plaintiff made a prima facie case by introducing the note in evidence, we believe that defendant has sustained the burden of proof to establish his affirmative defense that the note is without consideration. From the evidence we are convinced that the transaction between the parties was the intended sale of an automobile as defendant testified. Plaintiff's manager Meier, who negotiated with defendant, testified that the reason for the execution of the note was because Shemwell had been told: 'either he could pay the amount that he was liable for as a co-maker, or he could take possession of the car, and execute a new note for that and have the automobile.' At that time and during all negotiations with defendant plaintiff was in legal possession of the car and was able to confer both its possession and title certificate to defendant.
In our opinion the statement to defendant that he could 'take possession of the car' and 'have the car' if he would 'execute a new note' amounts to an offer of sale That proposal included two significant essentials of the sale of a chattel: (1) transfer of possession and (2) a price. When Shemwell accepted the offer and agreed to sign the new note a sales agreement was effected. The term 'sale' has been defined in Freund Motor Co. v. Alma Realty & Investment Co., 235 Mo.App. 587, 142 S.W.2d 793, 795, as '* * * a contract to give and to pass rights of property for money, which the buyer pays or promises to pay to the seller for the thing bought or sold * * *'. In this case the consideration for the sale is defendant's promise to pay plaintiff the sum of $478.27 as evidenced by the note and an...
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