Community Federal Savings & Loan Ass'n v. Fields

• Decision Date: 30 June 1942
• Docket Number: No. 12156.,12156.
• Citation: 128 F.2d 705
• Parties: COMMUNITY FEDERAL SAVINGS & LOAN ASS'N OF INDEPENDENCE, MO., et al. v. FIELDS.
• Court: U.S. Court of Appeals — Eighth Circuit

128 F.2d 705 (1942)

COMMUNITY FEDERAL SAVINGS & LOAN ASS'N OF INDEPENDENCE, MO., et al. v. FIELDS.

No. 12156.

Circuit Court of Appeals, Eighth Circuit.

June 5, 1942.

Rehearing Denied June 30, 1942.

Charles M. Miller, of Kansas City, Mo., for appellants.

Ben W. Swofford, of Kansas City, Mo. (M. J. Henderson, M. J. Henderson, Jr., and Herbert Jacob, all of Kansas City, Mo., on the brief), for appellee.

Before SANBORN and WOODROUGH, Circuit Judges, and TRIMBLE, District Judge.

TRIMBLE, District Judge.

The appellee here, Miller Fields, plaintiff in the court below, brought his action in the circuit court of Jackson County, Missouri, to recover $15,000 for alleged breach of a contract of employment. In that action he named as sole defendant the appellant Community Federal Savings and Loan Association, of Independence, Missouri, hereinafter referred to as Community. By an amendment he brought in as party defendant the Federal Savings and Loan Insurance Corporation, receiver of the Community, hereinafter referred to as the receiver. The suit was removed to the federal court by the defendants, motion to remand was overruled, and the case tried to a jury, resulting in a verdict for the plaintiff for $3,500 on which judgment was entered. The overruling of the motion for remand is not assigned as error and is not an issue on this appeal.

Miller Fields was a charter member of the Lee's Summit Building and Loan Association, which was organized under the laws of Missouri, and became secretary and a director thereof, and, according to his own testimony, controlled a very large per cent of the voting power of the stock. On October 27, 1939, he entered into the contract which is the subject of this action with the Community, which acted through Spencer Salsbury, its president. In that contract it was provided that Miller Fields was to be employed by the Community to manage its Lee's Summit branch office for a period of five years, the Community to pay Fields a salary of $100 per month with other considerations flowing to Fields. This contract set out the duties Fields was to perform. The last paragraph contained the provision that: "This contract is made in contemplation of first party (Community) buying the assets of Lee's Summit Savings and Loan Association," and in the event the sale was not consummated the contract was null and void.

Under date of September 11, 1939, Community had made an offer or proposal to the Lee's Summit Association, under which it was to take over the assets and liabilities of the Lee's Summit Association. The proposal contained the following paragraph: "To continue the maintenance of an office at Lee's Summit, with Mr. Miller Fields in charge, for a period of five years from the date of actual transfer." Nothing was said in this proposal about the salary or consideration to Fields. In addition the proposal provided that it was "made subject to the tentative approval given Community by the Federal Home Loan Bank, of Des Moines, Iowa, in its letter of September 1st, 1939, and the resolution of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation, both of Washington, D. C., of which you have been furnished copies by the bank." Neither in the letter mentioned nor the resolution is there any mention of maintaining a branch at Lee's Summit, nor of entering into a contract with Miller Fields for five years, at any salary.

On October 31, 1939, Community acquired by purchase the assets of Lee's Summit Building and Loan Association and continued the office at Lee's Summit, with Miller Fields in charge, from that date until June 11, 1940, at which time a Temporary Conservator, appointed by the Federal Home Loan Bank Board, took charge and closed the office at Lee's Summit, the operation thereof not being profitable in his opinion. The closing of the office ended the services of Miller Fields who up to and including that time had drawn the salary provided in the contract. On June 26, 1940, the receiver, as such, took charge and proceeded to the liquidation of Community in accordance with the rules and regulations and the law.

The separate answer of defendant Community, among other things, denied that the written contract was executed by this defendant, and asserted that if Spencer Salsbury did execute the alleged contract, he was not duly authorized by the Board of Directors duly convened, as required by the charter and by-laws, and the Board of Directors was without power or authority to authorize its execution, and that the contract was ultra vires. It further asserted in its answer that on June 26, 1940, the receiver, as such, took charge of its assets and was liquidating the assets of Community for the benefit of the shareholders and creditors, and that if plaintiff had any just claim against the Community, the same should have been filed with the receiver. It pleaded the failure to file the claim with the receiver in bar of the maintenance and prosecution of the suit here on appeal.

The separate answer of the defendant receiver, among other things, denied the execution of the alleged contract by Community, asserted that Spencer Salsbury was without authority to execute the contract, and that the execution thereof was not authorized by the Board of Directors, duly convened; that the Board of Directors was without authority to authorize the execution of the contract; that the same was contrary to the charter and by-laws of Community, was ultra vires and was without a valid consideration, and was not a valid contract or subsisting obligation of Community. It further denied that R. L. Nagle, as Temporary Conservator of Community, wrongfully discharged Miller Fields, or breached the contract, if it was a valid and binding contract. It then set up that the receiver had duly taken charge on June 26, 1940, as such receiver, and was liquidating the same under the law for the benefit of the shareholders and creditors, and that Miller Fields had not filed with the receiver his claim in accordance with notice to all creditors, duly published, and that the failure to do so barred the maintenance and prosecution of this action which is now here on appeal.

Plaintiff below, Miller Fields, filed a reply and among other things alleged that Spencer Salsbury had authority as President to execute the contract on behalf of Community, and if he did not have such authority his action was ratified by the Board of Directors of Community by payment to Miller Fields of the salary provided until the Temporary Conservator took charge and closed the office at Lee's Summit on June 11, 1940. He also alleged that the Federal Home Loan Bank of Des Moines, Iowa, acting as agent of receiver and as agent of the Federal Home Loan Bank Board, of Washington, had notice of the alleged contract, and defendants were estopped to assert its invalidity. Also with respect to not having filed his claim with the receiver, he alleged that before filing the suit the agent of the receiver, R. L. Nagle, had orally denied the validity of the alleged claim to plaintiff, and that this oral denial estopped the defendants from asserting the failure to file the claim with the receiver in bar of the prosecution of the suit.

The purported contract of...