West Virginia Mack Sales Co. v. Brown

• Decision Date: 30 March 1954
• Docket Number: No. 10604,10604
• Court: West Virginia Supreme Court
• Parties: WEST VIRGINIA MACK SALES CO. v. BROWN et al.

Page 103

81 S.E.2d 103

139 W.Va. 667

WEST VIRGINIA MACK SALES CO. v. BROWN et al.

No. 10604.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 26, 1954.

Decided March 30, 1954.

Syllabus by the Court.

1. When the time of payment is stated in an unambiguous promissory note a contemporaneous oral agreement which fixes a different time or extends the time or imposes any other condition inconsistent with the terms of the note is inadmissible.

2. The seller of goods under a conditional sales agreement, who is the holder of a note which is not included in such agreement but which was given by the buyer and accepted by the seller as the equivalent of cash for a preliminary payment, may recover the proceeds of the note after the seller has repossessed the property and retained and sold it as his own; and the buyer or other person who signs the note is not discharged from liability to pay it by the provisions of Section 23, Article 3, Chapter 40, Code 1931.

Robinson & Stump, Howard L. Robinson, James E. McNeer, Clarksburg, for plaintiff in error.

Philip J. Graziani, Bonn Brown, Elkins, for defendants in error.

HAYMOND, Judge.

This action by notice of motion for judgment was instituted by the plaintiff West Virginia Mack Sales Company, a corporation, in the Circuit Court of Randolph County, in January, 1951, to recover from the defendants Bonn Brown and Russell H. Henderson the sum of $2712.13 represented by a negotiable promissory note for that amount dated August 23, 1948, payable to the plaintiff on demand with interest, and signed by the defendants as makers. The claim of the plaintiff, including principal and interest to December 30, 1950, amounted to $3094.98.

The notice, returnable February 20, 1951, with an affidavit attached, was filed in the office of the clerk on January 30, 1951. On February 20, 1951, the proceeding was placed upon the docket of the court and counter affidavits of the defendants denying the claim of the plaintiff and their plea of non assumpsit were filed. On March 15, 1951, the defendants also filed a written statement of defense. Evidence consisting of the testimony of some witnesses given in court and the testimony of other witnesses in the form of depositions was introduced in behalf of the respective parties who, by agreement, waived a jury, and all questions of fact presented by the evidence were submitted to the court in lieu of a jury. The court found and entered judgment in favor of the defendants and awarded costs against the plaintiff. To that judgment this Court granted this writ of error upon the petition of the plaintiff.

On August 23, 1948, at Clarksburg, the plaintiff as the owner of a 1948 Model LFT Mack Truck sold the truck to the defendant Henderson. The entire purchase price, including insurance premiums and finance charges was the sum of $8619.37. In negotiating the sale James C. Randolph, as president, and Eugene Watkins, as vice president, represented the plaintiff, West Virginia Mack Sales Company, and Watkins told Henderson that a cash or down payment of one third of the purchase price would be required. Henderson was unable to make the required payment and Watkins agreed to accept a note signed by a responsible person as such payment. Henderson suggested the defendant Brown, an attorney of Elkins, West Virginia, as a party to the note. He was called by telephone and gave his consent. The note was then prepared, sent to Brown, signed by him and Henderson and delivered to the plaintiff and is in this form: '$2712.13 Clarksburg, W. Va., August 23, 1948,--On Demand--After Date We Promise to Pay to the Order of West Virginia Mack Sales Company without offset and for value received--Two Thousand Seven Hundred Twelve and 13/100 Dollars Negotiable and Payable at The Lowndes Savings Bank & Trust Company, Clarksburg, W. Va. With interest from date. 6% Russell H. Henderson Bonn Brown.'

Simultaneously with the execution and the delivery of the foregoing note, the defendant Henderson executed and delivered to the plaintiff, in connection with the sale of the truck, conditional sales agreement and note, also dated August 23, 1948, for $5907.24, representing the residue of the purchase price, payable to the order of the plaintiff at the office of Dealers Credit Corporation, at Parkersburg, West Virginia, due in eighteen monthly installments of $328.18 each. The agreement also provided that title to the truck should remain in the plaintiff until the note incorporated in the agreement should be fully paid. Immediately after execution and delibery of the agreement it was assigned by the plaintiff to Dealers Credit Corporation.

After the sale was concluded Henderson issued a check dated September 7, 1948, for the first installment of the deferred purchase money represented by the note for $5907.24. Payment of the check was refused by the bank on which it was drawn for lack of sufficient funds to his credit. Henderson also removed the truck from this State without the knowledge of the plaintiff. About eight months after the sale was completed the truck was located in his possession in Albany, Georgia. At that time some of its tires and other equipment were missing. It was brought back to Clarksburg by an employee of the plaintiff where it was repaired and remained for several months. Henderson was arrested upon a warrant charging him with the offense of issuing and delivering a worthless check and after his arrest the check dated September 7, 1948, was paid. Henderson made no other payment on the conditional sales note and neither he nor Brown has paid any part of the note for $2712.13.

The president of the plaintiff testified that in repossessing the truck when it was located in Georgia he acted for and represented Dealers Credit Corporation and assignee of the conditional sales agreement. After the truck had been repaired or reconditioned and had remained in the custody of the plaintiff for several months it was sold by the plaintiff at private sale to an individual purchaser on March 1, 1950, for $4000.00 and the proceeds of the sale in that amount were paid to Dealers Credit Corporation. Before it was sold in that manner Brown on more than one occasion verbally notified the plaintiff to sell it at public sale but no written notice demanding a resale of the truck was given by him or Henderson to the plaintiff at any time.

The note for $2712.13 signed by Henderson and Brown as makers does not mention or refer to the conditional sales agreement, which was also dated August 23, 1948, signed by Henderson, or the note for $5907.24 incorporated in that agreement; and the conditional sales agreement and the note incorporated in it likewise contain no reference to the note for $2712.13. Randolph, the president of the plaintiff, Watkins, its vice president, who was called as a witness by the defendants, and the defendant Henderson, all testified that at the time the sale was made and the note for $2712.13 was executed it was given by the defendants and accepted by the plaintiff as a down payment in lieu of cash. Henderson, however, also testified 'My understanding with Mr. Watkins was that I could keep payments up and pay some on note and if I hadn't the note all paid off when truck was paid for I could finance this note and run it through and handle it as payments on payment plan.' In testifying concerning the note, when asked if he considered it as a cash payment, the defendant Brown gave this answer: 'I can't say whether it was considered cash payment or not by West Virginia Mack, I only know what was told me when I talked with them at the time this transaction was made, and the fact that the note was given because it was necessary that they have something for down payment, and that note was to be paid by Henderson as he worked and it was my understanding to be covered by conditional sales contract so I would be protected, and in addition to be refinanced after enough payments were made for it to be refinanced and extended.' The plaintiff concedes that it has no claim against either Henderson or Brown for the difference between the unpaid balance of the note incorporated in the conditional sales agreement and the sum of $4000.00 realized by the sale of the truck to an individual purchaser on March 1, 1950.

The plaintiff contends that the note for $2712.13, on which this action is based, is not a part of and is not covered by the conditional sales agreement and note, and that the provisions of the agreement and of Article 3, Chapter 40, Code, 1931, generally referred to as the Uniform Conditional Sales Act, do not apply to the note which was considered by the parties to it as a cash payment in connection with the sale of the truck.

On the contrary the defendants contend, in substance, that the note for $2712.13 is included in and covered by the conditional sales agreement as part of the purchase price for the truck; that at the time it was executed and delivered the defendants understood that it was to be paid in installments and any unpaid balance remaining after the conditional sales note was paid would be refinanced on some deferred payment plan; that the provisions of the Uniform Conditional Sales Act apply to it; and that the plaintiff, by repossessing the truck, retaining possession of it for many months as its own property, and selling it at private sale, discharged the defendants of any obligation to pay the note under Section 23 of that statute.

The note on which this action is based is clear and free from ambiguity and its terms and provisions contain no reference to the conditional sales agreement or the note incorporated in it, or to any other written instrument. The evidence of the persons present and participating when it was negotiated shows clearly that it was made and accepted as a down payment in lieu of cash in connection with the sale of the truck. The testimony of the defendants to the effect that there was some verbal...