Babler v. Rhea

• Decision Date: 20 April 1918
• Docket Number: No. 2183.,2183.
• Parties: BABLER v. RHEA.
• Court: Missouri Court of Appeals

202 S.W. 604

BABLER v. RHEA.

No. 2183.

Springfield Court of Appeals. Missouri.

April 20, 1918.

Appeal from Circuit Court, Jasper County; J. D. Perkins, Judge.

Action by J. L. Babler against W. A. Rhea. Judgment for defendant, and plaintiff appeals. Affirmed.

Frank L. Forlow, of Webb City, for appellant. Thos. Hackney, of Kansas City, for respondent.

BRADLEY, J.

July 30, 1915, plaintiff filed suit in two counts on these instruments of writing. The first count is based on this instrument:

"St. Louis, Mo., December 22, 1908. In consideration of $820 to me in hand paid, the receipt of which is hereby acknowledged, I assign to J. L. Babler two thousand shares of Meadville Mining Company's stock, and hereby authorized the said company issued to said J. L. Babler the said number of shares of my stock in said company. W. A. Rhea. Fred E. Fisher, Witness."

The second count is based on this instrument:

"Received of J. L. Babler, $90 same being payment in advance, on account of assessment to be made by the Meadville Mining Company on two thousand shares of stock this day purchased by Mr. Babler from me. W. Rhea."

The answer was a general denial, and a plea of the five-year statute of limitations. Plaintiff never received his stock, and some six years and seven months after he paid out the money as above he brought this suit to recover back his money, with interast. The cause was tried before the court without a jury, and judgment went for defendant, and plaintiff appealed.

On the date of the two above instruments plaintiff paid to defendant the amount of money mentioned therein, and for the purposes stated therein. At the time of the sale of stock by defendant to plaintiff defendant had only a contract which entitled him to about 20,000 shares of the face value of $1 each in the Meadville Mining Company. October 27, 1908, the Meadville Mining Company, with a capital stock of $50,000, and others, including the defendant, entered into a contract whereby defendant et al. were to have 49 per cent. of the stock. December 10, 1908, a supplemental contract was entered into whereby the capital stock of the mining company was to be increased to $100,000, and defendant was to receive some 20,000 shares of the face value of $1 each. The first contract provided that the expenses of installing the machinery and putting the mine in operation would be paid by the parties thereto according to their respective interests, and that the stock would be issued to defendant and his associates when the mine being operated began to pay dividends. The supplemental contract providing for the increase of the capital stock provided that the increase should be made "as soon as legal and practicable, * * * and said stock shall be distributed as follows." Then follows the respective interests upon which the issuing of stock would be based; but here is no definite time fixed for the issuing of the stock, and no contingency mentioned upon which the issue of the stock was conditioned. The stock which defendant was to have was fully paid for by him by conveying to the mining company or turning over to the mining concern certain mining properties.

Defendant claims that there were frequent assessments in an effort to keep the Meadville Mining Company going, and `hat plaintiff failed to put up the assessments on his stock subsequent to the $90 assessment evidenced by the above receipt, and that he (defendant) put up for these assessments. Later the defendant sold his remaining interest in the Meadville Mining Company, and claims to have lost several thousand dollars. The mining venture proved a failure; the stock became worthless, and no stock was issued to defendant, or any of his associates, and plaintiff at no time demanded of the Meadville Mining Company the issue of the stock he bought.

Plaintiff sets out in his petition that defendant at the time he (plaintiff) bought the stock and paid the assessment did not own any stock in said company; and plaintiff says in his evidence that he did not discover this alleged fact until 1913, and makes the statement in his brief that his cause of action did not accrue until this discovery. The record, however, shows that defendant did own or had a contract whereby he would get about 20,000 shares of the Meadville Mining Company stock, and this contract was in force when defendant sold plaintiff the 2,000 shares. Neither did the plaintiff below ask any declaration of law presenting the issue that his cause of action did not accrue until his alleged discovery, nor does he brief that question here; merely states in the concluding paragraph of his brief under "Points and Authorities" that his cause of action did not accrue until he discovered that defendant did not own any stock at the time plaintiff bought. However, if it be conceded that defendant did not own any stock, and had nothing to sell, plaintiff's cause of action would accrue in a reasonable time thereafter; regard being had for his opportunity to discover the fraud. He had ample opportunity, but made no effort to discover anything or to learn anything about the concern in which he had invested.

That plaintiff's cause of action accrued more than five years before he commenced his suit we have no doubt, and will address ourselves solely to the only question briefed here by appellant, to wit: Is plaintiff's cause governed by the five or ten year statute? If by the five-year statute, the judgment should be affirmed; if by the ten-year statute, the cause should be reversed and remanded. The solution of the question is determined by the construction of the two instruments of writing of December 22, 1908. Do these instruments or either of them constitute a promise for the payment of money or property? If so, then the first clause of the ten-year statute (section 1888, R. S. 1909) governs; if not, the five-year statute (section 1889, R. S. 1909) governs.

The test laid down by our courts to determine which statute governs is that the instrument itself must, either expressly or impliedly, contain the promise to pay; and, if evidence aliunde is necessary in order to establish the promise, then the ten-year statute cannot be invoked. Parker-Washington Co. v. Dennison, 267 Mo. 199, 183 S. W. 1041;, Curtis v. Sexton, 201 Mo. loc. cit. 230, 100 S. W. 17; Ball v. Cotton Press Co., 141 Mo. App. 26, 121 S. W. 798. It is not claimed that either instrument sued on contains an express promise to pay anything; and therefore plaintiff must stand, if he stands at all, upon an implied promise embraced in the instruments to pay back his money in the event the stock was not delivered.

The instrument set out in the first count of the petition is no more than an assignment of so many shares of stock, with direction to the mining company to issue said stock to plaintiff. The record shows that at the time of the execution of this assignment defendant was the owner of some 20,000 shares of this stock, not at the time issued, but the fact that the stock was not issued nor delivered to plaintiff could not militate against defendant's ownership, or the title he passed by the assignment, especially as between plaintiff and defendant. Dain Mfg. Co. v. Trumbull Seed Co., 95 Mo. App. 144, 68 S. W. 951; 35 Cyc. 36; Williams v. Gray, Adm'r, 39 Mo. 201.

As...