Title: Chiles v. Mann & Mann, Inc.

State: arkansas

Issuer: Arkansas Supreme Court

Document:

400 S.W.2d 667 (1966) E. B. CHILES, Jr., Appellant, v. MANN & MANN, INC., Appellee. No. 5-3791. Supreme Court of Arkansas. March 28, 1966. N. M. Norton, Forrest City, for appellant. Mitchell D. Moore, Osceola, for appellee. *668 McFADDIN, Justice. Appellee sued appellant on a promissory note. The answer was a general denial.[1] The original note was introduced in evidence and appellant admitted his signature, but sought to show that he signed as president of a corporation. The Trial Court refused to allow the appellant to present such evidence under the general denial and instructed a verdict for the appellee. From judgment on the verdict, appellant prosecutes this appeal, and urges two points: The original note sued on was introduced in evidence, and the germane portion reads: Appellee offered evidence that the note was for value received, was signed by the appellant, was past due, and had not been paid; and then appellee rested. Appellant admitted that he signed his name, "E. B. Chiles, Jr.", on the note, but sought to show that Chiles Planting Company was the name of a corporation of which he was president and majority stockholder; and that he signed the note in such capacity. The Trial Court held that since a general denial was the only pleading filed by the defendant, he could not offer testimony as to the corporation and as to his intentions in signing the note. There are several reasons why the Court was correct in this ruling. The first relates to the rules of pleading: i. e., under a general denial testimony of confession and avoidance cannot be heard such as here: the defendant confesses his act of signing the note but seeks to avoid the effect by claiming he signed as an officer of a corporation. Some of our cases showing the limited evidence that may be offered under a general denial are: Grier v. Yutterman, 102 Ark. 433, 145 S.W. 194; and Shirk v. Williamson, 50 Ark. 562, 9 S.W. 307. Our cases are in accord with the general rules as regards pleadings. In 41 Am. Jur. 396, "Pleadings" § 149, the text reads: "Like the general issue, the general denial operates as a denial of every material allegation of the complaint as fully as if it had been specifically and separately denied. * * * It covers defenses which go to destroy the plaintiff's cause of action, but not those which are grounded on new matter or matters in avoidance or other defense that must be specially pleaded." (Emphasis supplied.) And in § 155 of the same text the general holdings are summarized: "Since the plaintiff must apprise the defendant in the beginning as to what he relies upon for a recovery, it is only right that the defendant should be required also to inform the plaintiff of any special or affirmative defenses he expects to make by pleading the facts constituting such defenses. * * *" An enlightening case on both of the points in this appeal is that of Bluff City Lbr. Co. v. Hilson, 85 Ark. 39, 107 S.W. 161. Hilson sued Bluff City Lumber Company for the *669 claimed balance due on a purchase contract which was for "all the lumber of said firm, mill run * * * at the price of $10.50 per thousand feet." The defendant denied any such contract. After the plaintiff had concluded his evidence, the defendant offered the witness Ritchie to testify as to the grades of the lumber shipped. The Trial Court refused to allow such evidence as being outside the issue tendered by the defendant's answer. In affirming the ruling of the Trial Court on this point, we said: A second reason showing the correctness of the ruling of the Trial Court is found in our own holdings. In First National Bank of Jonesboro v. J. H. Snyder Manufacturing Company, 175 Ark. 1134, 1 S.W.2d 817, the note was signed, "J. H. Snyder Mfg. Co., W. H. Snyder." When sued on the note W. H. Snyder sought to show: that J. H. Snyder Manufacturing Company was a corporation; that W. H. Snyder was its president and manager; that W. H. Snyder signed the note as an officer of the corporation and did not intend to become personally liable. This Court, in an Opinion by Chief Justice Hart, held that such testimony by W. H. Snyder was not to be heard as it was an attempt to vary by parol evidence the terms of the written note. He said: Here, the appellant, E. B. Chiles, Jr., did not show on the note that he was signing in any capacity as officer of anything. The only signature"Chiles Planting Company by E. B. Chiles, Jr."meant that Chiles Planting Company was the trade name of E. B. Chiles, Jr., and he could not offer parol testimony to vary that meaning.[2] Appellant insists that, even if the Arkansas cases are as above stated, nevertheless such cases have been changed by the adoption of the Uniform Commercial Code, which is Act No. 185 of 1961; and appellant particularly refers us to Ark. Stat.Ann. § 85-3-403 (Add.1961), the germane portion of which reads: Particularly, the appellant insists on this language: "An authorized representative who signs his own name to an instrument * * * (b) except as otherwise established between the immediate parties, is personally obligated if the instrument names the person represented but does not show that the representative signed in a representative capacity, * * *" (Emphasis supplied.) Appellant insists that under the expression, "except as otherwise established between the immediate parties," he had the right to show that the plaintiff knew that he had signed the note only as president of the corporation. If the appellant had entered a plea to such effect instead of merely a plea of general denial, then the point that he raises now might be important. But when he made only a general denial, he could not thereafter claim that he signed the note in a representative capacity. So, even conceding without deciding that the language, "except as otherwise established between the immediate parties," has the effect that the appellant says, nevertheless the appellant's failure to plead anything but a general denial foreclosed any claimed right that he might have to show the status under which he signed the note. The appellant's second point is that he should have been allowed to amend his answer so as to plead more than a general denial. When E. B. Chiles, Jr. attempted to testify that Chiles Planting Company was a corporation and that he signed the note as president of the corporation, the Court held such evidence to be improper, saying: The appellant insists that the Trial Court abused its discretion in refusing to permit an amendment to the answer so that the proffered testimony as to corporate existence and signature intention could be presented to the jury. The appellant relies on Ark.Stat.Ann. § 27-1160 (Repl.1962), which reads in part: The complaint in the case at bar had been filed on December 30, 1964; the answer had been filed on January 30, 1965; and the cause was tried on May 27, 1965. The cause was tried to a jury. The plaintiff had offered its evidence and rested; and while the defendant was on the witness stand he moved to be allowed to amend the pleadings. The Court refused. Did the Court abuse its discretion? We have repeatedly held that the Trial Court has wide discretion in such a situation. We revert to Bluff City Lbr. Co. v. Hilson, 85 Ark. 39, 107 S.W. 161, previously mentioned under Point I supra. In that case, after the Court had refused to allow the proffered evidence because it was outside the issues tendered by the answer, the defendant prayed that it be allowed to amend its answer; the Trial Court refused to allow an *671 amendment at such a late late; and, in affirming the ruling of the Trial Court, we said: In Union Motor Co. v. Tait, 224 Ark. 807, 276 S.W.2d 690, Chief Justice Griffin Smith used this language: So, in the case at bar, we cannot say that the Trial Court abused its discretion in refusing to allow an amendment which would have presented an entirely new defense while the case was in progress and after the plaintiff had rested. Affirmed. [1] The defendant's answer was: "The defendant, E. B. Chiles, Jr., for answer to the complaint of the plaintiff, Mann & Mann, Inc., denies each and every allegation thereof." [2] In 82 A.L.R.2d 424, there is an annotation: "Personal liability of one who signs or endorses without qualification commercial paper of a corporation."