Stephens v. Bell

• Decision Date: 03 May 1937
• Docket Number: No. 18938.,18938.
• Citation: 106 S.W.2d 19
• Parties: STEPHENS v. BELL.
• Court: Missouri Court of Appeals

106 S.W.2d 19

STEPHENS v. BELL.

No. 18938.

Kansas City Court of Appeals. Missouri.

May 3, 1937.

Rehearing Denied May 24, 1937.

Appeal from Circuit Court, Clay County; Ralph Hughes, Judge.

"Not to be published in State Reports."

Suit by Roy Stephens against E. E. Bell. From a judgment granting defendant a new trial, the plaintiff appeals.

Reversed and cause remanded, with directions to reinstate verdict and enter judgment for plaintiff.

Lawson & Hale, of Liberty, for appellant.

Conn Withers and James S. Simrall, both of Liberty, for respondent.

SPERRY, Commissioner.

Appellant, Stephens, was plaintiff below, and respondent was defendant. They will be so designated in this court.

Plaintiff sued defendant as indorser with recourse, on a note wherein one Williams was payor and defendant was payee. The note sued on was in the principal sum of $1,606, with some accrued interest, and upon which payments had been made. Judgment was prayed in the sum of $1,069.40, and interest from October, 1931, at 8 per cent., and for attorney fees of 15 per cent., thereon. Defendant admitted the indorsement, but pleaded that he was induced to guarantee payment by reason of fraudulent representations made by plaintiff. He did not plead rescission nor tender back the money obtained, nor did he pray for damages on a counterclaim. Trial to a jury resulted in verdict for plaintiff in the amount of $584.50, and $50 for attorney fees. Motion for new trial was granted, and from the order granting new trial plaintiff has appealed.

Defendant assumed the burden of establishing the fraudulent representations which, it is claimed, justify his avoidance of the guaranty. He testified that he was, at the time of the transaction, engaged in the automobile sales business, and that one Williams desired to purchase a truck from defendant but lacked $1,300 having enough to pay the balance of the purchase price. Defendant had previously sold Williams trucks and he had previously "financed" automobile paper through plaintiff. Defendant and Williams went to plaintiff's place of business, and, after some negotiations, plaintiff agreed to finance this deal. Defendant and Williams then repaired to the garage where the note sued on and a chattel mortgage and certain statements of assignment and representations were made out. They came back to plaintiff's place of business and delivered the note and other papers to plaintiff, who refused to accept same unless defendant indorsed the note "with recourse," an absolute guaranty of payment. Defendant had, before coming to plaintiff's place of business, indorsed same "without recourse," and he demurred about guaranteeing payment. He then asked plaintiff, in Williams' presence, if Williams owed plaintiff any money. Plaintiff replied that Williams owed him less than $100. Defendant then indorsed the note "with recourse," and plaintiff delivered a check therefor in the sum of $1,300 which was used by defendant in paying the wholesale price of the truck sold to Williams. Defendant also received a used truck as part of the payment on the truck sold to Williams.

Williams was a witness for defendant, and testified to the above facts and also stated that, when plaintiff told defendant that he (Williams) owed him less than $100, he (Williams) said that he was "better off" than he thought he was. He also testified that a salesman for defendant first approached him in an effort to sell him a truck, and, pursuant to arrangements with the salesman, he went to see defendant; whereupon they went together to see plaintiff about financing the deal. Other evidence for defendant showed that at the time of this transaction Williams owed plaintiff in excess of $700 on a note secured by chattel on furniture sold to him by plaintiff.

Defendant asked and the court refused to give the following instruction:

"A. The Court instructs the jury that if you find and believe from the greater weight of the credible evidence in the case that shortly before the defendant, E. E. Bell, executed the written guarantee of the note executed by L. D. Williams, and which said guarantee is described in the evidence, the defendant asked the plaintiff, Roy Stephens, whether the said L. D. Williams owed to the plaintiff any other money, and that in answer to said question the plaintiff then stated to the defendant that the said L. D. Williams at that time owed to the plaintiff, Roy Stephens, less than $100.00, and that said statement made by plaintiff, if you find it was so made, was untrue, and that the plaintiff knew said statement was false and untrue, and that in fact at the time said statement was made, if it was made, the said L. D. Williams was then indebted to the plaintiff in a greater sum than $100.00, and that said statement of plaintiff, if so made, was for the purpose of deceiving and defrauding the defendant as to the indebtedness then owed by the said Williams to the plaintiff and for the purpose of inducing the defendant to execute the guarantee described in evidence of the said Williams' note, and that the defendant in the exercise of ordinary prudence believed the statement so made by the plaintiff, if you find it was so made, and relied upon the truthfulness of said statement and was deceived thereby, and was as a result of said statement induced to sign and execute said written guarantee, then your verdict will be for the defendant." (Italics ours.)

Plaintiff contends that instruction 1, given for defendant, is all and more than defendant is entitled to. It told the jury that, if they found the facts as set out in instruction "A" above, down to the portion italicized, "then the Defendant is entitled to an additional credit on the claim sued on in such sum as you find and believe from the evidence is the difference between the sum of $100.00, and the amount actually owed by Williams to Stephens at the time of...