Welfare Investment Co. v. Stowell

STEPHENS, P. J. This is an action on a promissory note for the sum of $130,000 interest, attorney fees and costs. The trial was before a jury and after introduction of the note and evidence given as to the value of attorney fees, the plaintiff rested. The defendant thereupon introduced testimony upon the issue of payment and upon the issue of fraud in the assignment of the note to plaintiff and respondent. The court thereafter granted plaintiff’s motion for a directed verdict in its favor. This appeal is from the judgment made and entered upon such verdict. There is also an attempted appeal from an order denying [446]the motion for new trial but as this right no longer exists, this part of the appeal is dismissed.

Appellant contends that the evidence shows that the note was paid or at least that the evidence upon that issue was such as to entitle the cause to be submitted to the jury. Although there is very little conflict of evidence in the case, there is sharp conflict between counsel as to the factual and legal conclusions to be drawn from the evidence.

On May 12, 1931, N. W. Stowell, appellant and sole defendant in the trial court, together with William Lacy, F. V. Gordon and F. B. Chapin signed a promissory note as makers in favor of Security-First National Bank as payee. It appears that after a time the bank experienced difficulty in collecting the interest and, according. to the deposition of Wm. Lacy (he had died before the trial) Mr. Jack Kerr, vice-president of the bank, had discussed this with him and had said “Well, Bill (Mr. Lacy) we look to you for the payment of that note.” Mr. Lacy replied, “Well, I guess if you sue me you could collect it.”

Mr. Stowell (defendant-appellant) testified that he had a conversation with Mr. Wm. Lacy about the note and that he gave Lacy a check for his proportion of interest (one-quarter thereof) and offered to pay one-fourth of the principal but Mr. Lacy wanted him to pay one-half and Lacy would pay one-half (his and his brother-in-law’s portion). This Stowell declined to do.

It will be well at this juncture to examine into the relation of the plaintiff and respondent and its connection with this action. Welfare Investment Company was a family corporation of which Mr. Wm. Lacy was a director and president, and his sons Wm. G. Lacy, Walter P. Lacy, Roy Lacy and Gordon Lacy were directors. It is contended by appellant that the evidence introduced and hereinafter alluded to tends to prove that this company was not only the agent of but was in fact the alter ego of Wm. Lacy. This is disputed by respondent who refers to the undenied testimony that the other directors had invested their own funds in the corporation; that Mr. Roy Lacy was its general manager and Mr. Wm. Lacy was a minority stockholder.