Case Title: GULF NAT. BANK v. Wallace

Citation: 394 So. 2d 864

Docket Number: 

State: mississippi

Court: Mississippi Supreme Court

Date: 1980-12-10T00:00:00Z

Document:
394 So. 2d 864 (1980) GULF NATIONAL BANK v. Rosemary Evans WALLACE. No. 52217. Supreme Court of Mississippi. December 10, 1980. Rehearing Denied March 18, 1981. John C. Ellis, W. Joel Blass, Mize, Thompson & Blass, Gulfport, for appellant. Joe Sam Owen, Gulfport, for appellee. Before PATTERSON, C.J., and BROOM and BOWLING, JJ. BROOM, Justice for the Court: Fraud related to execution of documents securing a bank loan is the gist of the action of Rosemary Evans Wallace[1] (hereinafter Mrs. Wallace) against Gulf National Bank (GNB). Trial in the Circuit Court of Harrison County, First Judicial District, resulted in a verdict of $250,000 actual and $350,000 punitive damages in favor of Mrs. Wallace. Remittitur of $250,000 was ordered below leaving Mrs. Wallace with a judgment for $250,000 actual plus $100,000 punitive damages. GNB argues on its direct appeal that (1) Mrs. Wallace failed to meet her burden of proof to establish fraud, and (2) the lower court erred in instructing the jury. On her cross appeal, Mrs. Wallace contends that punitive damages should have been remitted by only $100,000. We reverse. Testimony presented was that Mr. Evans and his partner applied for a large loan from GNB. Security offered by the borrowers was inadequate unless Mrs. Wallace's land was included in the deeds of trust securing the loan. The deeds of trust, which included her property, were prepared at GNB by a Mrs. Holley, secretary of Mr. Sneed, GNB's president. Mr. Evans brought the deeds of trust home and called Mrs. Holley, their nearby neighbor, to come by and notarize them. She came to the Evans residence where, after Mrs. Wallace signed them, Mrs. Holley took her acknowledgement. These events transpired February 22, 1974, and the deeds of trust were delivered in due course to GNB. Subsequently, on April 3, 1974, Mrs. Wallace executed an assignment of her $23,626.28 certificate of deposit to GNB. Then on July 29, 1974, again in her living room, Mrs. Wallace signed a loan extension document under much the same circumstances as existed when she signed on February *865 22nd. After Mr. Evans and his partner defaulted in payment of the loan, GNB foreclosed on the property resulting in sale of the security collateral including Mrs. Wallace's land in Harrison County. Other facts will be stated as appropriate to disposition of the appeal. Decisive is the following query: Was the testimony presented at the trial sufficient to establish fraud on the part of GNB? Our decision must adhere to the rule requiring establishment of fraud by clear and convincing proof. Aponaug Mfg. Co. v. Collins, 207 Miss. 460, 42 So. 2d 431 (1949); Martin v. Gill, 182 Miss. 810, 814-815, 181 So. 849, 850 (1938); Christian v. Green, 45 So. 425, 425-426 (Miss. 1908). In her brief, Mrs. Wallace contends: Regarding the assignment of her savings account to GNB, Mrs. Wallace states in her brief: Concerning the July 1974 deed of trust which Mrs. Wallace executed, she states in her brief that she Neither side presented testimony of Mrs. Holley, GNB's secretary, thereby leaving Mrs. Wallace's case largely dependent upon her own testimony. GNB's president Sneed testified, and there is no denial, that Mrs. Holley prepared the documents which Mrs. Wallace signed in her living room. Mr. Evans testified that he had to pledge Mrs. Wallace's property as security for the GNB loans. As to the extent of Mrs. Wallace's damages, she presented Dr. Seastrunk who testified that she had suffered severe emotional damage and would, in terms of medical probability, later require in-patient psychiatric care. She also presented lay testimony concerning her depression and hysteria. In response to GNB's contention that she failed to establish fraud by clear and convincing proof, Mrs. Wallace's position is set forth in the following language excerpted from her brief: Our analysis of the testimony reveals that Mrs. Wallace was less than clear in her recollection of who told her that signing the papers "was a routine business matter." During cross examination of Mrs. Wallace, appellant's attorney recounted her testimony when she was deposed: Immediately thereafter the following colloquy occurred in the courtroom between Mrs. Wallace and appellant's attorney: Careful examination of the record shows that in her testimony at trial, Mrs. Wallace conceded that in her earlier deposition testimony she noted that it was Mr. Evans who stated that it was a routine matter. As to her version that she was led to believe her signature was needed because the documents "pertained to the property in Pearl River County" such a conclusion is unsupported by the record. Actually the record of Mrs. Wallace's testimony refutes that GNB's secretary, Mrs. Holley, made any fraudulent representation. The brief of Mrs. Wallace states that GNB's testimony as to the representations made by Chunn Sneed that he would secure for her a profitable rate of interest if she would sign the Assignment of Savings Account remains uncontradicted. This assertion is without merit because she testified at trial that there were no communications from Mr. Sneed prior to her signing the two deeds of trust and the assignment. Testimony contained in the record presents no indication that Mrs. Wallace was in the category of an illiterate person or one of low mentality. To the contrary, she is an experienced school teacher, a college graduate, and a licensed real estate saleswoman. There is no question that she could read and understand the English language. No testimony was introduced to the effect that anyone suggested that she not read or examine the loan documents. Nor did anyone keep her from scrutinizing them. At the time she executed the deeds of trust, she did not ask any questions and did not call the bank about them which in bold print (at the top of the page) showed what they were. After the deeds of trust were executed, with GNB's consent, Mrs. Wallace sold one of the parcels of land. Then it was that the proceeds of the sale were placed in a savings account (certificate of deposit) in her name and assigned to GNB as collateral substituted for the land. After stating that the case might be weak, the lower court overruled GNB's motions for a directed verdict and peremptory instruction. The proof introduced by Mrs. Wallace, an adult person of no disability, considered most favorably to her along with all reasonable inferences drawn therefrom in her favor, failed to make out a case sufficient to go to the jury on the theory of fraud. Her testimony leaves the inescapable conclusion that she was not sure who told her that her signing the documents in question was a routine matter. We are unable to conclude that there was any clear and convincing evidence before the jury from which it might reasonably find that Mrs. Wallace signed either of the *867 loan documents as a result of any fraud, misrepresentation or deceit on the part of GNB. Failure of GNB to thereafter give her details, when requested by her, about the loans made to her then husband and his partner cannot be a proper basis for finding that her signature was fraudulently obtained. It follows that the decision appealed from must be reversed, and judgment for GNB entered here. In view of our holding, we do not reach other assignments of error. REVERSED AND RENDERED. PATTERSON, C.J., SMITH and ROBERTSON, P.JJ., and LEE, BOWLING and COFER, JJ., concur. SUGG and WALKER, JJ., take no part. [1] It was not until March 1975 that Mrs. Wallace obtained a divorce from Allen Evans. Several months prior to the Red Gate Farm venture negotiations with Gulf National Bank, the Evanses were living apart. At the time of the loan, however, in February 1974, they were reconciled and living together.