Tri-State Lumber & Shingle Co. v. Proctor

• Decision Date: 29 May 1939
• Citation: 128 S.W.2d 1116,233 Mo.App. 1207
• Parties: TRI-STATE LUMBER & SHINGLE CO., APPELLANT, v. DAVID M. PROCTOR, RESPONDENT
• Court: Kansas Court of Appeals

128 S.W.2d 1116

233 Mo.App. 1207

TRI-STATE LUMBER & SHINGLE CO., APPELLANT, v. DAVID M. PROCTOR, RESPONDENT

Court of Appeals of Missouri, Kansas City

May 29, 1939

Appeal from the Circuit Court of Jackson County.--Hon. Darius A Brown, Judge.

Judgment affirmed.

W. F Wilkinson and W. Raleigh Gough for appellant.

(1) The burden of proving a lack of consideration for the guaranty is upon the defendant. Secs. 2657 and 2958, R. S. 1929; Smith v. Ohio Millers Mutual Fire Ins. Co., 330 Mo 236, 49 S.W.2d 42; Kugman v. Donnell (Mo. App.), 271 S.W. 535; Peoples State Bank v. Hunter (Mo. App.), 264 S.W. 54; May v. Brown (Mo. App.), 244 S.W. 89; Shawhan v. Shawhan, 195 Mo.App. 445, 197 S.W. 369; Home Bldg. & Loan Ass'n v. Barnett, 160 Mo.App. 164, 141 S.W. 723; Holmes v. Farris, 97 Mo.App. 305, 71 S.W. 116; Swife & Co. v. McFarland (Mo. App.), 231 S.W. 65. (2) The undisputed evidence shows that plaintiff required defendant's guaranty as a condition to its acceptance of the note and that defendant executed the guaranty in compliance with that requirement--the consideration plaintiff paid for the note was a sufficient consideration for defendant's guaranty. Adams v. Huggins, 78 Mo.App. 219, 222-223; Hill v. Coombs, 93 Mo.App. 264; General Motors Acceptance Corp. v. Holland (Mo. App.), 30 S.W.2d 1087 (8); Sec. 2654, R. S. 1929. (3) Under the pleadings and the evidence, defendant did not establish a defense that plaintiff had made a valid contract to accept the note without his guaranty. (a) Such a theory of defense is contrary to the allegations of defendant's answer. 8 C. J., 963-964; Sevier v. Harmon (Mo. App.), 261 S.W. 348; Krelitz v. Calcaterra (Mo.), 33 S.W.2d 909, 911 (6). (b) The evidence is insufficient to establish a contract to accept the note without a guaranty. 13 C. J., 263-265, 546-548, 287-288, and 289-290. (c) Even if the evidence showed such a contract, the contract was void under the Statute of Frauds. Sec. 2968, R. S. 1929; Arnest v. Messerly (Mo. App.), 17 S.W.2d 670; Wind v. Bank of Maplewood (Mo. App.), 58 S.W.2d 332. (4) There were no erroneous and prejudicial rulings against defendant in the admission or exclusion of evidence, or in any other matters connected with the trial. Adams v. Huggins, 78 Mo.App. 219.

David M. Proctor pro se.

(1) (a) Presumption in favor of ruling of trial court. Reissman v. Wells, 258 S.W. 43; Crocker v. MacCartney, 24 S.W.2d 649. (b) Presumption that motion for new trial was sustained on all named grounds. Inzerillo v. Chicago, etc., R. Co., 225 Mo.App. 1213, 35 S.W.2d 44. (2) Having assumed the burden of proving specific consideration plaintiff had the burden of proof thereof. Cahn v. Miller, 106 S.W.2d 495; Coons v. Bank of Commerce (Ky.), 26 S.W.2d 15, 18; Cobb v. Bank, 267 Ky. 744, 103 S.W.2d 264. (3) The court having erred in directing a verdict for the plaintiff was correct in sustaining defendant's motion for a new trial. 1 Houts, Mo. Pleading and Practice, p. 658; Bell v. Kansas City Life Ins. Co., 71 S.W.2d 135, 138; Howard v. Jones, 13 Mo.App. 595; Greenwood v. Lamson (Vt.), 168 A. 915, 916; McMahan v. Geiger, 73 Mo. 145, 39 Am. Rep. 439; Montgomery County v. Auchley, 92 Mo.App. 126, 4 S.W. 425; Eitel v. Farr, 178 Mo.App. 367, 165 S.W. 1191; Howard v. Jones, 10 Mo.App. 81. (4) The trial court erred originally in admitting hearsay testimony of the witness, Brink, concerning a conversation between him and H. B. McCray. Adams v. Huggins, 78 Mo.App. 219; Landau v. Travelers Ins. Co., 305 Mo. 563, 573, 267 S.W. 370, 378; German Evangelical B. Church of Concordia v. Reith, 39 S.W.2d 1057, 1065, 327 Mo. 1098, 76 A. L. R. 604; White v. McCoy Land Co., 229 Mo.App. 1019, 87 S.W.2d 672, 688. (5) Conclusion. Ladd v. Williams, 104 Mo.App. 390, 397, 79 S.W. 511.

OPINION

BLAND, J.

This is an action, in two counts, upon a written guaranty of two promissory notes. The case was tried before a jury, resulting in a directed verdict in favor of plaintiff in the sum of $ 855.21 on count one and a directed verdict for defendant on count two of the petition. Judgment was entered accordingly. Defendant filed a motion for a new trial on count one and plaintiff filed a motion for a new trial on count two. Both motions were sustained. Plaintiff has appealed from the judgment granting defendant a new trial but no appeal has been taken by the defendant.

Count one involves an alleged guaranty by defendant of a note referred to in the evidence as the "Hale note" and count two his guaranty of the "Clough note."

The facts show that plaintiff is a corporation engaged in the wholesale lumber business in Kansas City; that prior to the fall of 1927, plaintiff had sold a large amount of lumber to the H. B. McCray Lumber Company, a corporation of Kansas City; that the latter owed plaintiff a substantial amount of money therefor on an open account which, in the fall of 1927, was due and payable; that plaintiff's president, Mr. Arthur T. Brink, made demand upon the H. B. McCray Lumber Company, through its president, Mr. H. B. McCray, for the payment of the account; that McCray told Brink that his company could not make payment in cash. However, McCray stated to Brink that the Becker Building Company owed the McCray Lumber Company a balance of $ 5000 for lumber that the Becker Building Company had purchased from it for the building of certain houses in Kansas City; that the Becker Building Company had sold a number of these houses and had taken second mortgage notes back from the purchasers and McCray suggested to Brink that the McCray Company would procure from the Becker Company some of these second mortgage notes and deliver them over to plaintiff to be applied on plaintiff's bill against the McCray Company. Shortly after McCray made this suggestion, he took up the matter with defendant, who owned one-half of the stock of the Becker Company and looked after its financial affairs, and it was finally agreed that the Becker Company would deliver over to the McCray Company two second mortgage notes (the Hale and Clough notes), which Brink had theretofore indicated he was willing to take in plaintiff's behalf at a discount of 20 per cent on their face value. There was an agreement between defendant and the McCray Company that the Becker Company should have credit on the books of the McCray Company for a like amount.

A meeting was then arranged at plaintiff's office, which meeting was had on or about January 13, 1928, where defendant and the McCray Lumber Company, through H. B. McCray, signed a written guaranty on the back of the so-called Hale note, which is the subject matter of count one of the petition in this case.

Plaintiff made some collections of the principal and interest of this note, but thereafter default was made in the payments thereon and plaintiff foreclosed under its second mortgage, buying the property in for $ 800. Later, there was a foreclosure under the first mortgage and plaintiff lost the property. The McCray Lumber Company afterwards went into receivership and plaintiff, on account of the McCray Company's guaranty, collected certain dividends in that proceeding. Demand was then made upon defendant for the balance on account of his guaranty. Defendant refused to pay and this suit followed. At the trial the parties stipulated that the balance due on the Hale note, including interest to the date of the trial, was the sum of $ 855.21.

It is insisted by the defendant that there was no consideration for his guaranty of the note. This contention will require a careful consideration and a more detailed statement of the testimony.

Mr. Brink testified that in the fall of 1927 he had his first conversation with McCray relative to the McCray Company paying plaintiff's account, at which time McCray suggested that plaintiff take some of the second mortgage notes owned by the Becker Company. However, Brink testified that McCray did not mention the Becker Company to him but told him that the second mortgage notes were owned by the defendant. Brink testified:

"Q. What did you tell him (McCray)? A. First I told him 'no.' I didn't see how we could use them, and finally, the account remained open such a great length of time we thought something should be done about it, because we could not continue to extend to McCray credit without the account being in better shape. Finally, I told him if he would get Mr. Proctor (defendant) to give us some suitable second mortgages somewhat in line with the amount of the account, and if Mr. Proctor and Mr. McCray would both guarantee the account, these mortgages, I would take them and apply them on the account.

"Q. Subsequent to that, Mr. Brink, did you have a meeting with McCray and Mr. Proctor? A. We had several meetings. The final one, in which Mr. McCray and Mr. Proctor both came in the office with these notes.

"Q. Now, was the matter discussed between you and Mr. McCray and Mr. Proctor all there together? A. Yes, we were there in my office. Q. And what was said, tell what was said and who said it in those conversations? A. I told Mr. McCray what we really wanted was the money, but in as much as he didn't have the money and Mr. Proctor was not able to pay him and he consequently was not able to pay me, that I was doing the next best thing by taking those guaranteed notes. Q. What was said about the guaranty of the notes? What was said about the requirement that the notes be guaranteed? A. Well, there were four of us in the office. Mr. Proctor, Mr. McCray, Mr Wilkinson (plaintiff's attorney) and myself. Q. Who is Mr. Wilkinson? A. Mr. W. F. Wilkinson. Q. He was there as your attorney, was he? A. Yes, sir. Q. All right. A. And Mr. Proctor and Mr. McCray came in. Mr. Wilkinson knew they would be there. The four of us were there, and we placed--we wrote a...