Case Name: The LUCE COMPANY v. Herbert G. HOEFLER et al.
Court: Maine Supreme Judicial Court
Jurisdiction: Maine
Decision Date: 1983-08-22
Citations: 464 A.2d 213
Docket Number: 
Parties: The LUCE COMPANY v. Herbert G. HOEFLER et al.
Judges: Before McKUSICK, C.J., and NICHOLS, ROBERTS, VIOLETTE and WATHEN, JJ., and DUFRESNE, A.R.J.
Reporter: West's Atlantic Reporter, Second Series
Volume: 464
Pages: 213–221

Head Matter:
The LUCE COMPANY v. Herbert G. HOEFLER et al.
Supreme Judicial Court of Maine.
Argued June 17, 1983.
Decided Aug. 22, 1983.
Luce & Beach, P.A. by Christopher Beach (orally), Farmington, for plaintiff.
Mark S. Kierstead (orally), Waterville, for defendants.-
Before McKUSICK, C.J., and NICHOLS, ROBERTS, VIOLETTE and WATHEN, JJ., and DUFRESNE, A.R.J.
. The Luce Company is a family partnership and as such may lack the capacity to sue in Maine. See 1 Field, McKusick & Wroth, Maine Civil Practice § 4.4, at 65 (2d ed. 1970). However, the defense of lack of capacity, which defendants here have not asserted, is waivable. M.R.Civ.P. 9(a); Gulick v. Board of Environmental Protection, 452 A.2d 1202, 1203 n. 1 (Me.1982). In Gulick, we deleted from the caption of the case the name of an unincorporated association that lacked capacity to sue and substituted in the caption the name of another plaintiff who suffered no such disability. We cannot perform a similar substitution in this case because The Luce Company appeared below as the sole named plaintiff.

Opinion:
McKUSICK, Chief Justice.
Herbert and Elizabeth Hoefler, makers of the two promissory notes here sued upon, appeal from a judgment of the Superior Court (Franklin County) awarding plaintiff The Luce Company ("the Luces") a total of $72,971.47 plus post-judgment interest and costs. On the record of this case, we cannot overturn the Superior Court's decision.
At trial, the Hoeflers' only defense to the Luces' suit upon the notes was based on a subordination agreement entered into in December, 1979, by the Luces, Maine National Bank, the Small Business Administration, and Oliver Oil Company, a Maine corporation whose only shareholders are Herbert and Elizabeth Hoefler. That agreement included the Luces' promise not to "sue or collect or receive payment of" any and all of Oliver Oil Company's debts to it until Oliver Oil Company had finished paying off certain debts to the bank and the Small Business Administration. Those latter debts were still partially outstanding at the time of trial. The Hoeflers introduced evidence in the Superior Court in an attempt to show that the December, 1979, subordination agreement had been intended to protect them individually from suit, as well as their corporation. The trial justice, however, sitting without a jury, found that the Hoeflers
had not met their burden of convincing the Court that the agreement, to which [the Hoeflers] were not parties, prohibited [the Luces] from pursuing any debt to it other than a debt from the Oliver Oil Company.
In order to prevail on their affirmative defense, defendants had to prove by a fair preponderance of the evidence that the subordination agreement extended beyond the terms of the written document to protect the Hoeflers also from suit by the Luces. The trial justice's ultimate decision need not have been based on a finding that the parties to the agreement intended that it should not bar the instant suit against the Hoeflers. The party who bears the burden of proving the factual basis for a claim or affirmative defense will suffer an adverse judgment if the factfinder is merely not persuaded by that party's evidence. See Baker's Case, 143 Me. 103, 108, 55 A.2d 780, 782-83 (1947).
The trial court in this case based its decision on a determination that the Hoe-flers failed to establish the facts necessary to support their affirmative defense. Such a determination may be reversed on appeal only if the evidence in support of the defense was of such a nature that the fact-finder was compelled to believe it and to draw therefrohi the requested inference to the exclusion of any other.
The evidence adduced by the Hoe-flers consisted first of an earlier subordination letter (dated November 1, 1979) in which the Luces had agreed to subordinate their $55,000 notes to "a seasonal line of credit 90% guaranteed by SBA in the amount of $45,000." That subordination expressly ran for the benefit of the Hoe-flers as well as Oliver Oil Company; it, however, subordinated the Luce loan to a smaller debt than the open-ended amount covered by the December, 1979, subordination agreement and was limited in time to eleven months. An earlier willingness to refrain from suing the Hoeflers under limited circumstances does not inevitably translate into a mandated conclusion that the Luces accepted the subordination handicap under more burdensome conditions.
Other evidence adduced at trial consisted of conflicting oral testimony by persons involved in negotiating and drafting the December, 1979, subordination agreement. One of the Luce partners, himself a lawyer, testified that he was aware that Oliver Oil Company was a corporation and that he signed the December, 1979, subordination agreement on the understanding that by its plain terms it did not bar the Luces from suing the Hoeflers individually. He testified that the Luce partners had "believed, as we discussed [the proposed December, 1979, subordination agreement] that [the Hoeflers] might have assigned the liability under that debt to their corporation for the purpose of payment from the corporation income as it was received."
Even if oral testimony is uncontra-dicted, an appellate court must accept the trial court's evaluation of it, "save where the physical evidence and the written record rationally forbid his conclusion on the credibility issue, 'no matter what the unknown factors'." Qualey v. Fulton, 422 A.2d 773, 776 (Me.1980). As we said in an analogous case involving a motion for a directed verdict by the party bearing the burden of proof,
There is no law that can compel a human mind to believe . oral testimony. It may be inherently improbable. It may be impossible. It may be exaggerated. The silent facts and circumstances may raise doubts. It may not "ring true." The appearance, manner, or interest of a witness makes a vast difference to the mind of him who hears testimony and who must decide as to truth or value.
Pease v. Shapiro, 144 Me. 195, 199, 67 A.2d 17, 20 (1949). See also Service Auto Supply Co. of Puerto Rico v. Harte & Co., Inc., 533 F.2d 23, 25 (1st Cir.1976) (directed verdict in favor of party with burden of proof is rare, and permitted only where that party "has established his case by testimony that the jury is not at liberty to disbelieve"); 9 C. Wright & A. Miller, Federal Practice and Procedure § 2535 (1971 & Supp.1983).
In sum, we cannot say that the evidence before the factfinder mandated a conclusion that the December, 1979, subordination agreement, which did not mention the Hoeflers, nonetheless represented a mutual meeting of the minds that the Hoeflers individually, as well as the named corporate debtor, Oliver Oil Company, were to be protected from suit by the Luces.
The entry is:
Judgment affirmed.
NICHOLS, ROBERTS and WATHEN, JJ., concurring.
. One note was signed by Herbert Hoefler alone; the second was signed by both Herbert and Elizabeth.