Springfield Television, Inc. v. Gary, 12364

• Decision Date: 27 January 1982
• Docket Number: No. 12364,12364
• Citation: 628 S.W.2d 398
• Parties: SPRINGFIELD TELEVISION, INC., A Missouri Corporation, Plaintiff-Respondent, v. W. A. GARY and Linda Sue Gary, Individually and engaged in d/b/a Casa Grande Mobile Homes, Defendants-Appellants.
• Court: Missouri Court of Appeals

Page 398

628 S.W.2d 398

SPRINGFIELD TELEVISION, INC., A Missouri Corporation, Plaintiff-Respondent, v. W. A. GARY and Linda Sue Gary, Individually and engaged in d/b/a Casa Grande Mobile Homes, Defendants-Appellants.

No. 12364.

Missouri Court of Appeals, Southern District, Division Two.

Jan. 27, 1982.

Douglas W. Greene, III, Hamra, Greene, Johnson & Sweeney, Springfield, for defendants-appellants.

Dee Wampler, Wampler & Wampler, Lester Barry Cox, Springfield, for plaintiff-respondent.

BILLINGS, Judge.

Plaintiff television broadcasting company brought this suit for monies due for television advertising for Casa Grande Mobile Homes. Defendants were a Texas married couple, W. A. Gary and Sue Gary, "Individually and engaged in d/b/a Casa Grande Mobile Homes," and a Texas corporation, Texana Casa Grande, Inc. ¹ Trial was to the court and judgment entered against the Garys. Because we have concluded that critical factual determinations are unsupported by substantial evidence and the court erred in its application of the law to the facts (Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976) ) we reverse and remand.

Defendants W. A. and Sue Gary are residents of the State of Texas. The Garys and a Ted Endicott caused a Texas corporation to be formed in early 1977 known as Texana Casa Grande, Inc. Endicott was president, W. A. Gary was vice president and Mrs. Gary was named as secretary and treasurer. The three constituted the board of directors and apparently were the only shareholders. Pursuant to a plan to conduct a mobile home sales business in Springfield, Missouri, the corporation was granted a Missouri Certificate of Authority to do business on May 23, 1977. There is no evidence the corporation ever registered any name for the doing of business in Missouri other than the true name of the corporation shown in the Certificate of Authority.

The evidence indicates the Garys loaned large amounts of money to the ill-destined corporation, with Endicott acting as manager for the daily operation of the business. W. A. Gary testified he first came to Springfield in connection with the anticipated business in January or February, 1977, the first of a half dozen or so trips he made. The totality of the evidence concerning Mrs. Gary's involvement with the Springfield operation was that she came to Missouri twice and signed a guaranty agreement to Commerce Bank.

A sign was erected at the business address in Springfield advising the presence of "Casa Grande Mobile Homes." The evidence associates no person but Endicott with the sign. During the approximately seven months' duration of the business, Endicott engaged in customary managerial activities, including the initiation of television advertising for the firm. The advertising arrangements with plaintiff commenced with an agreement between Endicott and Guy Akins, plaintiff's sales manager. These commercials started in May of 1977, and were eventually paid for by the business. Other orders, the subject of this litigation, were placed under dates of June 9, July 1, July 25 and August 11, 1977, the last advertisement airing on September 22, 1977.

It is clear that plaintiff's representatives never ascertained the status of the entity with which it was doing business. The exhibits before us show the advertiser as "Casa Grande Mbl Home." There was some indication Gary's name came up during the initial meeting of Endicott and Akins, but there was no evidence Gary knew or approved of the various agreements until some time after the fact. As a result of his contacts with Endicott, however, Akins was left with the impression that Endicott and Gary "were in it together," and that Gary was "the head" meaning "the president, or what have you, or owner of the company."

At some point after the scheduling of the final, and largest, sale of advertising to Casa Grande, Endicott "disappeared" and Akins became worried. This concern resulted in a face-to-face meeting between Akins and Gary, during which the latter purportedly assured Akins "he would get it all straightened out, and take care of the bill." Although the precise time of this exchange is not fixed by the record, Gary testified he did not learn of the television advertising debts made by Endicott until late September or early October, 1977. He also denied telling anyone he would be personally liable for the debt.

It is obvious that the willingness of plaintiff to extend credit, and to make assumptions about the Garys' involvement with the mobile home operation, were based on Endicott's statements and his references to certain matters on file at the Commerce Bank of Springfield. Akins, in fact, testified the decision for approval of credit for the advertising was on the strength of a credit check at the Commerce Bank and a financial statement of the Garys located there.

The only credit check described in the testimony, however, was conducted by Don Garwitz, credit manager for a business corporation separate from plaintiff. ² Garwitz personally went to the bank and was given ready access to certain documents relating to the Garys and Texana Casa Grande, Inc. ³ This action, by Garwitz's accounts, took place after the credit had in fact been extended to Casa Grande Mobile Homes, and by his recollection occurred in late summer or early fall of 1977.

In any event, Garwitz knew the bank was "floor-planning" the mobile home business and buying retail sales contracts on units sold to customers. He apparently never ascertained, however, that the bank was doing business with Texana Casa Grande, Inc. d/b/a Casa Grande Mobile Homes, to be distinguished from the Garys in their personal capacities. Garwitz concentrated on the financial statement of W. A. Gary, and not the "other papers in the file." He understood "W. A. Gary was Casa Grande," but if he had known that Gary's involvement had been limited to the securing of bank credit for a corporate entity, it would "very definitely" have affected the credit decision of plaintiff.

In fact, all the testimonial and documentary evidence presented supports just that and no other conclusion with respect to the role of one or both of the Garys. The particular personal financial statement of the Garys was not produced in evidence, but various other documents from the bank file are before us, along with the testimony of the officer in charge of the bank's loan department. Both the documents and testimony indicate that the Texas corporation was extended a line of credit by the bank, and was the entity doing business as Casa Grande Mobile Homes.

No personal loans were ever made to the Garys. The presence of the Garys' personal financial statement is explained by the fact that a customary personal guaranty was executed by Endicott and by W. A. and Sue Gary in order for the bank "to give, and continue to give Texana Casa Grande Inc. d/b/a Casa Grande Mobile Homes ... financial accommodations and credit ...." This guaranty makes no purport to apply to anything except transactions between the bank and Texana Casa Grande, Inc.

One other incident deserves mention. On October 3, 1977, an attorney's demand letter was sent to W. A. Gary regarding the advertising debt. A few days later, Gary telephoned Garwitz. According to Garwitz, Gary said he would be coming to Springfield, "and he would personally get it all taken care of." He acknowledged, again by Garwitz's account, "that he was the man behind Casa Grande, and that he would see that the bills were paid." Gary denied ever feeling personally obligated, and testified he refused Garwitz's request to sign a note so "we won't push any further."

On this evidence, the trial court made the following findings of fact:

"1. That Plaintiff is a corporation organized and existing under the laws of the State of Missouri with its principal place of business at 999 West Sunshine, Springfield, Greene County, Missouri.

2. That Defendants W. A. GARY and SUE GARY are residents of the State of Texas.

3. That a contract was entered into by and between the Plaintiff and Defeddants (sic) W. A. and SUE GARY, sometime during the early summer of 1977.

4. The aforesaid contract was negotiated by Giy (sic) Akins on behalf of the Plaintiff, and largely by Ted Endicott on behalf of the advertiser.

5. At the time the contract was entered into, Plaintiff and Plaintiff's officers and agents had considered W. A. GARY and his wife, SUE GARY, as affiliated and sole owners of CASA GRANDE MOBILE HOMES, a private business, not incorporated.

6. Plaintiff was aware that the GARYS were doing business in Greene County and did request financial committment (sic) or guarantee from Mr. and Mrs. Gary.

7. Mrs. Gary was doing business and personally present in Greene County.

8. That the said W. A. and SUE GARY did, in fact, carry on business in Springfield, Missouri, and did carry on business and contract with the Plaintiff.

9. That the Defendants W. A. GARY and SUE GARY, exhibited their intention to carry on business personally in the State of Missouri and to be personally liable for debts, and also to personally guarantee a separate corporate loan at the Commerce Bank of Springfield, Missouri.

10. That Mr. W. A. GARY did carry on business personally with the Plaintiff.

11. That Mr. W. A. GARY committed himself to pay the Plaintiff's bills.

12. That Mr. W. A. Gary requested advertising from the Plaintiff.

13. That although W. A. and SUE GARY furnished the financial backing for CASA GRANDE MOBILE HOMES, they employed and allowed Ted Endicott as their agent to be in full charge of day to day operations.

14. That W. A. and SUE GARY caused their personal financial statement to be given as a reference in business transactions.

15. That Plaintiff did supply television advertising, performed reasonable (sic) and satisfactorily and that the charges prayed for in their Petition are fair, just and reasonable.

16. That demand has duly been made upon Defendants W. A. and SUE GARY by Plaint...