Wilson Industries, Inc. v. Newton County Bank

• Decision Date: 01 March 1971
• Docket Number: No. 46089,46089
• Citation: 245 So.2d 27
• Parties: WILSON INDUSTRIES, INC. v. NEWTON COUNTY BANK.
• Court: Mississippi Supreme Court

Page 27

245 So.2d 27

WILSON INDUSTRIES, INC. v. NEWTON COUNTY BANK.

No. 46089.

Supreme Court of Mississippi.

March 1, 1971,

D. M. Anderson, A. B. Amis, Jr., Newton, for appellant.

James B. Everett, Decatur, O. B. Triplett, Jr., Forest, for appellee.

SMITH, Justice:

Wilson Industries has appealed from a final judgment of the Circuit Court of Newton County, dismissing its suit brought by it as plaintiff against Newton County Bank. The gravamen of the action as stated in the declaration was that, at a time when plaintiff's debt to Newton County Bank had been less than $60,000 the bank had usuriously demanded of it, and as a consequence it had paid to the bank $90,000, all of which sum the plaintiff alleged it was entitled to recover under the provisions of Mississippi Code 1942 Annotated section 36 (1956).

The substance of the bank's defense, as reflected by the pleadings, was that Wilson Industries had been indebted to it in 'an undetermined' sum which was, however, 'in excess of' $110,000, that Wilson Industries was in 'desperate' financial circumstances and that the sum of $90,000 in question had been paid and received by mutual agreement in compromise or settlement of this indebtedness.

Such facts as are disclosed by the meager record are limited to those stated in a stipulation and such as appear from several documents introduced by agreement. From these it appears that Wilson Industries desired to 'sell out' its physical assets and that a conditional offer to purchase for $100,000 had been received from Newton Industries Corporation. This offer was made expressly contingent upon the success of the prospective purchaser in borrowing the purchase money. In an agreement executed by all parties, Newton County Bank agreed with both seller and purchaser to make the loan to the latter, provided 90 per cent of it were guaranteed by the Small Business Administration, a Federal agency.

On March 20, 1969, all of the parties met together and the several documents which appear in the record were executed. The stipulation states that all of these documents were executed 'simultaneously' at this meeting. By contract duly executed by all parties, Wilson Industries agreed to sell its physical assets to Newton Industries Corporation for $100,000, provided Church Industries (whose interest are not involved here) would pay to it an additional $4,000; the bank agreed to lend the purchaser, Newton Industries Corporation, the necessary $100,000 provided that Small Business Administration would guarantee 90 per cent of the loan. Wilson Industries, and the other parties agreed that out of the proceeds of the sale, if the sale should go through, Wilson Industries would pay to Newton County Bank $90,000 in complete settlement of the bank's 'disputed' claim against it.

At the same time and on the same occasion Newton Industries executed its promissory note, payable to Newton County Bank in installments, in the principal sum of $61,130.61, in return for which, and 'other good consideration,' the bank executed and delivered to Newton Industries a release.

It appears from the stipulation that between March 20, when this composite contract was entered into, and July 14, the date on which Wilson, Industries made payment to the bank of the $90,000 'settlement,' no further sums were advanced by the bank to Wilson Industries. In the interim, two $700 installments of the $61,130.61 note had been paid. Meanwhile, the claim of the bank against Wilson Industries referred to in the agreement appears to have remained unaffected and this debt to the bank was listed in an affidavit executed by the president of Wilson Industries and filed in compliance with the provisions of the Mississippi Bulk Sales Law.

The contention of appellant is to the effect that the avove facts, in the light of the release executed by the bank, compel a conclusion that the $60,130.61 note was the entire and only debt of Wilson Industries to Newton County Bank. Moreover, it is argued that the difference between the face of the note and the $90,000 paid to the bank represented usurious interest and that Wilson Industries was entitled to recover the entire sum under Mississippi Code 1942 Annotated Section 39 (1956). The trial court found, however, from the stipulated facts and considering all of the instruments together, that Wilson Industries' note for $61,130.61 and the release were executed 'simultaneously' with the agreement of Wilson Industries acknowledging that it was indebted to Newton County Bank in 'an undetermined sum' and agreeing to pay $90,000 'in settlement' of the bank's 'disputed claim' against it, if Wilson Industries should succeed in selling out for $100,000 to Newton Industrial Corporation. Furthermore, the only reasonable construction of the settlement is that it was made on an 'unless' or contingent basis, that it to say, if Wilson Industries did not succeed in its efforts to sell out to Newton Industries Corporation for $100,000 under the 'agreement' executed by the parties, the bank would be relegated to collecting the '61,130.61 evidenced by the note. This view finds support in the consideration for the release, stated on its face, that it was given by the bank for the note and 'other good consideration,' the agreement being the only other 'good consideration' suggested by anything appearing in the record. Under the provisions of the 'sell out' proposal it was provided that Wilson Industries promise to pay $90,000 in settlement should be void if the sale actually should not take place, in which eventuality 'nothing herein (in the agreement) shall be considered as an admission of liability in any amount' (on the part of Wilson Industries to Newton County Bank).

In 17 Am.Jur.2d Contracts section 264 (1964) the following statement appears:

The general rule is that in the absence of anything to indicate a contrary intention, instruments executed at the same time, by the same contracting parties, for the same purpose, and in the course of the same transaction will be considered and...