Thomas v. State for Use of Thorp Finance Corp.

• Decision Date: 25 January 1965
• Docket Number: No. 43244,43244
• Citation: 171 So.2d 303,13 A.L.R.3d 1030,251 Miss. 648
• Parties: , 13 A.L.R.3d 1030 E. W. THOMAS and Fidelity & Casualty Company of New York v. STATE of Mississippi for the use of THORP FINANCE CORPORATION.
• Court: Mississippi Supreme Court

Page 303

171 So.2d 303

251 Miss. 648, 13 A.L.R.3d 1030

E. W. THOMAS and Fidelity & Casualty Company of New York v. STATE of Mississippi for the use of THORP FINANCE

CORPORATION.

No. 43244.

Supreme Court of Mississippi.

Jan. 25, 1965.

Semmes Luckett, W. H. Maynard, Clarksdale, for appellant.

Howard G. Woodward, Charles L. Brocato, Vincent J. Brocato, Clarksdale, for appellee.

KYLE, Presiding Justice:

This case is before us on appeal by E. W. Thomas, a notary public, and the Fidelity & Casualty Company of New York, surety on his official bond, defendants in the court below, from a judgment of the Circuit Court of Coahoma County rendered in favor of the plaintiff Thorp Finance Corporation against the defendants for damages alleged to have been sustained by Thorp Finance Corporation as a result of the improper false and negligent acknowledgment of the forged signature of F. R. Trainor on a conditional sales contract purportedly signed by Clyde Trainor and F. R. Trainor for the purchase of certain items of farm machinery purchased by Clyde Trainor from R. H. Trotter and C. D. Kelly, d/b/a Tractor Sales and Service Company, which contract was purchased in the ordinary course of business by Thorp Finance Corporation.

The record shows that in March 1961 R. H. Trotter and C. D. Kelly, d/b/a Tractor Sales and Service Company, undertook to sell to Clyde Trainor certain farm machinery, which had a cash sale price of $10,773 and a time price of $12,203, and on which there was to be a cash payment and trade-in allowance of $3,591. A Conditional Sales Contract for such sale was executed by Clyde Trainor as purchaser and assigned with recourse by Trotter and Kelly and submitted to Thorp in the hope that Thorp would purchase the contract. After examining the contract Thorp informed Trotter and Kelly by letter that it was unwilling to purchase the contract with Clyde Trainor as the only obligor, but it would purchase the contract if Clyde Trainor's son, F. R. Trainor, would sign the contract with his father. Thorp returned the contract to the sellers. Shortly thereafter Thorp purchased the Conditional Sales Contract which constitutes the subject matter of this litigation. The contract was dated March 27, 1961, and purported to bear the signatures of Clyde Trainor and F. R. Trainor. The contract had attached to it an acknowledgment certificate signed and sealed by E. W. Thomas, Notary Public, certifying that Clyde Trainor and F. R. Trainor had personally appeared before him and acknowledged the execution of the contract. The contract was sent to the Chancery Clerk of Quitman County for recordation. After recordation the contract was forwarded to Thorp as assignee by mail, and Thorp remitted $6816.50 to the sellers as their consideration for their assignment of the contract.

The plaintiff's proof also showed without dispute facts as follows: Default was made in the payment of the first installment due under the contract, being an installment for $2,585.20, due December 1, 1961; and Thorp, acting under the terms and provisions of the contract, took possession of the machinery and advertised and sold the same and applied the net proceeds of the sale, which amounted to $4,751.78, in partial satisfaction of the debt. The amount of money which Thorp had paid to the sellers for the contract was $6,816.50. The difference between that amount and the amount realized from the sale of the machinery was $2,064.72.

Thorp thereafter brought suit in the Circuit Court of Coahoma County against R. H. Trotter, C. D. Kelly, Clyde Trainor and F. R. Trainor for a deficiency judgment, and on July 17, 1962, recovered a judgment therein against Trotter, Kelly and Clyde Trainor, jointly and severally, for $4,583.29. Thorp lost its suit against F. R. Trainor, because of the fact that the proof therein showed that someone other than F. R. Trainor had signed F. R. Trainor's name to the contract, that the signing of F. R. Trainor's name to the contract was a forgery.

The plaintiff's proof in this case showed that Clyde Trainor, was, and is, judgment proof, with six unsatisfied judgments enrolled against him; and that Trotter and Kelly, in the interval between the rendition of the judgment against them and the institution of this action, had obtained discharges in bankruptcy.

Appellant E. W. Thomas testified that he was a merchant engaged in the operation of a Ben Franklin Store, known as a '5 and 10 cents store', in the vicinity of the 'Crossroads' in the City of Clarksdale; that he was a notary public on March 28, 1961, and that he examined the acknowledgment certificate dated March 28, 1961, which was shown in and constituted a part of the Conditional Sales Contract involved in this controversy. Thomas stated that he was well acquainted with C. D. Kelly and Bill Lee, one of his employees, that he had confidence in them and had taken acknowledgments of the execution of conditional sales contracts for Tractor Sales and Service Company before March 28, 1961; that Kelly or Lee would bring that Tractor Sales and Service contracts to him for notarization, and sometimes they would leave some loose change (never more than fifty cents) on the counter for him and sometimes they would not. Thomas stated that he had nothing to do with the sale of farm equipment, and he had no interest in the Tractor Sales and Service Company, and no connection, in a business way, with Clyde Trainor or his son F. R. Trainor. He was not sure that he had ever seen either of the Trainors.

Thomas admitted that he executed the acknowledgment certificate attached to the Conditional Sales Contract dated March 28, 1961, at the request of C. D. Kelly or Bill Lee. The acknowledgment certificate appears in the record as follows:

'STATE OF MISS.

COUNTY OF COAHOMA} SS

'Personally appeared Clyde & F. R. Trainor, known to me to be the person who signed the foregoing Retail Instalment Contract as Buyer, who, being first duly sworn, acknowledged that he signed the said contract, and that the signing of the said contract was his voluntary act and deed.

'Witness my hand and seal this 28 day of March, 1961.

'E. W. Thomas, Notary Public

'Coahoma County

(Seal of Notary)'

Thomas stated that he did not know at the time he executed the certificate of acknowledgment that the name 'F. R. Trainor' affixed to the Conditional Sales Contract was a forgery; that, if he had known that F. R. Trainor's signature on the instrument was a forgery, he would not have executed the acknowledgment certificate. Thomas stated that he was convinced that neither Clyde Trainor nor F. R. Trainor appeared before him at the time he executed the acknowledgment certificate.

At the conclusion of all of the evidence the trial judge sustained the plaintiff's motion for a directed verdict for the plaintiff against the defendants, E. W. Thomas and the Fidelity & Casualty Insurance Company, jointly and severally, for the sum of $2,000, and against E. W. Thomas, individually, for the additional sum of $64.72 and all proper interest from April 8, 1961 to February 8, 1964, amounting to $350.96. A judgment was therefore entered in favor of the plaintiff for the above stated amounts.

From that judgment the defendant E. W. Thomas and Fidelity & Casualty Insurance Company of New York have prosecuted this appeal.

The appellants' attorneys have assigned and argued four points as grounds for reversal of the judgment of the lower court.

It is first argued that the court erred in refusing to limit the appellee's recovery to nominal damages because of the appellee's failure to prove that it could have collected the promissory note from F. R. Trainor if F. R. Trainor had signed the contract. In support of their contention on that point the appellants' attorneys say that the appellee's proof was insufficient to show that the appellee could have collected from F. R. Trainor on ...