Court Opinion

ID: 7821067
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:54:56.925922+00
Date Added: 2024-06-11T16:30:44.402260
License: Public Domain

Ernie E. Wright, Chief Judge, dissenting. In my view the evidence was not sufficient to make a jury question on the liability of appellant, Lonoke Production Credit Association, for the debt of SCPP to appellee, and the trial court erred in failing to grant appellant’s motion for a judgment notwithstanding the verdict. To sustain the verdict there must be substantial evidence to support each of the following: (1) That PCA entered into an original promise to pay the debt SCPP incurred with appellee prior to March 12, 1977, the date of the alleged agreement or promise on the part of PCA. (2) Consideration flowing from SCPP to PCA to support the alleged agreement. (3) That the alleged promise or agreement on the part of PCA was within the scope of the authority of Henry Chambers, its Vice President. An examination of the record discloses no substantial evidence to support any of these requirements. The evidence as to any agreement on the part of PCA with appellee only reflects PCA would pay for future feed deliveries by appellee to SCPP provided SCPP authorized such loan disbursements. I find no evidence that PCA promised or agreed to pay to appellee the account accrued by SCPP prior to March 12, 1977. The strongest evidence relating to such alleged promise was the testimony of Mrs. Pfeifer that Mr. Chambers said, “The account is good and we should go ahead and send the feed.” As to the old account, this statement is nothing more than an expression of an opinion and falls short of constituting evidence of a promise or agreement on the part of PCA to pay the old debt of SCPP. There was no evidence of any consideration other than possible indirect benefits, flowing to PCA to support the alleged promise or agreement to pay the debt of SCPP. There was no evidence Henry Chambers had authority to obligate PCA to pay the debt of another; on the contrary, the evidence was that there was no such authority. In Hutson v. T. M. Doves Mercantile Co., 170 Ark. 984, 282 S.W. 371 (1926) it was held, A corporation, not expressly authorized to do so, cannot ordinarily contract to become a surety for, or lend its credit to another person or corporation. — It is ultra vires of a corporation to enter into contracts of guaranty or suretyship not in the furtherance of its business, unless given express authority to do so. The fact that the corporation may reap some indirect benefit from becoming a surety or guarantor for another does not confer upon it implied power to do so. The case of National Surety Corp. v. Inland Properties, 286 F. Supp. 173 (E.D. Ark. 1968), affirmed 416 F. 2d 457, is in accord with this rule. I would reverse. I am authorized to say Judge Hays joins in this dissent.