Bank of Moberly v. Meals

• Decision Date: 11 April 1927
• Docket Number: 25473
• Parties: Bank of Moberly, Appellant, v. Roswald Meals, Logan Meals, May Meals, Otto Meals, J. Marvin Meals and Ernest Cottingham
• Court: Missouri Supreme Court

295 S.W. 73

316 Mo. 1158

Bank of Moberly, Appellant, v. Roswald Meals, Logan Meals, May Meals, Otto Meals, J. Marvin Meals and Ernest Cottingham

No. 25473

Supreme Court of Missouri

April 11, 1927

Motion for Rehearing Overruled May 24, 1927.

Appeal from Audrain Circuit Court; Hon. Ernest S. Gantt Judge.

Affirmed as to Sureties; Reversed and remanded (with directions) as to other defendants.

Willard P. Cave, M. J. Lilly, W. W. Fry, Jr., and Perry S Rader for appellant.

(1) The great weight of evidence is that the four makers and two indorsers of the note all signed it before its delivery. Plaintiff's evidence is clear, positive, direct and consistent that the six of them signed the note at the same place, and at the same time, one right after the other, in the order in which their names appear on the note. The evidence for the defendants that Otto Meals did not sign it at that time, but signed it six days later, is contradictory unreasonable and inconsistent with the other established facts of the case. (2) The burden was upon defendants to show by the greater weight of the credible evidence that Otto Meals signed the note as a maker after its indorsement and delivery. Secs. 798, 811, 2160, R. S. 1919; Stillwell v. Patton, 108 Mo. 363; Kilpatrick v. Wiley, 197 Mo. 164; Paramore v. Lindsey, 63 Mo. 66; La Belle Savings Bank v. Taylor, 69 Mo.App. 105; Roettger v. Rothermel, 251 S.W. 428; First Natl. Bank v. Ford, 216 P. 692 (Wyo.) ; Harris v. Bank, 22 Fla. 512; Kalteyer v. Mitchell, 102 Tex. 392; Barcliff v. Treece, 77 Ala. 532; Graham v. Rush, 73 Iowa 451; Insurance Co. v. Brim, 111 Ind. 283; Conable v. Keeney, 16 N.Y.S. 719; Pullen v. Hutchinson, 25 Me. 253; Davis v. Jenney, 1 Metc. (42 Mass.) 221; Cosgrove v. Fanebust, 10 S.W. 214; Crews v. Farmers Bank, 31 Gratt. (Va.) 353; Sturm v. Baker, 150 U.S. 318, 340; Towles v. Tanner, 21 App. (D. C.) 542, 547; Teske v. Baumgart, 99 Nebr. 479; Cavitt v. Robertson, 42 Okla. 619. (3) In law there was no material alteration even if it were a fact that Otto Meals was permitted by the bank to sign the note as a maker six days after its indorsement by the two sureties. The evidence conclusively shows that the note was given for an existing partnership indebtedness, and that it was signed by at least two of the partners as makers before it was indorsed by either of the two indorsers, and even though Otto Meals, the third member of the partnership, signed it after its delivery his signature did not work a change in the number or relation of the parties, or increase or decrease the legal obligations of the indorsers or of the other makers or of himself. It became a binding and legal obligation for the partnership debt as soon as Roswald Meals and Logan Meals signed it, and the signature of Otto Meals, whether he signed it at the same time they did or subsequently, was not a change or addition which altered the effect of the instrument in any respect. Sec. 911, R. S. 1919; Meador v. Malcolm, 75 Mo. 550; Ault v. Bradley, 191 Mo. 709; Dreyfus & Co. v. Union Natl. Bank, 164 Ill. 83; 1 Greenleaf on Evidence, sec. 567; Smith v. Crooker, 5 Mass. 537; Taylor v. Taylor, 12 Lea (Tenn.) 714; Mace v. Heath, 30 Nebr. 620; Howell v. Adams, 68 N.Y. 314; Pahlman v. Taylor, 75 Ill. 629; Continental Bank & Trust Co. v. Sacks, 152 La. 103; Ensign v. Fogg, 177 Mich. 317; Arnold, Barbour & Hartshorn v. Jones, 2 R. I. 345; Blair v. Bank, 11 Hump. (30 Tenn.) 84. (4) A change in the number of signers is not necessarily a change in "the number of the parties." If the name of Otto Meals was signed to the note as maker six days after it was signed by the other three makers and indorsed by the two indorsers, that was not a change in the number of the parties. He was already a party. The law had placed his name on the note. The law implied that, being a member of the firm of Logan Meals & Sons, and the note being for a partnership indebtedness, and two of the partners having signed it before its indorsement, Otto was just as much a party to the note without his name as with it; and his subsequent signature was not a change in the parties, or a change in the relation of the parties, or a change or addition which altered the effect of the instrument in any respect. He, and all the makers and both the indorsers remained liable on the note in exactly the same way and to the same extent after he added his signature as they were before he added it. See, exactly in point Dreyfus & Co. v. Union Natl. Bank, 164 Ill. 83. (5) Plaintiff was entitled to a judgment against Otto Meals. Even if it is affirmed as to all the other defendants is cannot be affirmed as to him. The statute relating to material alterations does not avoid the note as to him, since he made the alteration. Sec. 910, R. S. 1919; Handsaker v. Pedersen, 71 Wash. 218.

A. R. Hammett and Rodgers & Buffington for respondents.

(1) Plaintiff's witnesses, the three bank officials, testified that Otto Meals was in the bank on the afternoon of April 30, 1921, so as to make it possible that he signed the note then and there, whereas defendants witnesses, Otto Meals, Logan Meals, May Meals and Sarah Cottingham, four in number, and manifestly as equally credible as plaintiff's three witnesses, and with no greater if as much interest to subserve in the case as the bank officers, showed that Otto Meals was on the farm, six miles from Moberly during all of said day and accordingly was not in the bank and couldn't have signed the note on the afternoon of said April 30th. In addition, the defendant endorsers both testified that Otto Meals' name was not on the note when they endorsed it. (2) Appellant urges that it makes no difference from a legal standpoint whether or not Otto Meals signed the note because he was a member of the so-called firm of Logan Meals & Sons. The evidence in the case conclusively shows that all of the loans made by the bank were transactions between the bank and Roswald Meals. Appellant urges three decisions of this court as substantiating its view that it didn't make any difference when Otto Meals signed the note or whether he signed at all. Neither of the three cases are in point. In the case of Leabo v. Goode the suit was not upon the note but was upon the original debt of the partnership which had been paid by one of the sureties. In the case of Meader v. Malcolm the suit was upon a note signed in the partnership name. In the case of Aull v. Bradley the suit was upon a claim in the probate court evidenced in writing, to-wit, by notes, and the only issue involved in the case was the character of the original debt so as to determine whether it should be charged against the partnership or the individual or both. We will concede for the sake of argument in the case at bar that the character of the original debt was a partnership liability, yet the plaintiff saw fit to take a note which upon its face shows only individual liability, and choose to bring suit on this note. Under the same and identical circumstances this court has held in Farmers' Bank of Mo. v. Bayless, 35 Mo. 439, that where one or more of several partners execute a note in their own name for money borrowed, no action on the note can be maintained against a partner not signing although the money may have been borrowed for the firm and applied to partnership purposes. Hence this court's decision aforesaid puts at rest appellant's contention that Otto Meals would have been liable on the note as of April 30th even though he didn't sign it then. (3) Section 911, R. S. 1919, says in clear words that any alteration which changes the number or relation of the parties is a material alteration. Manifestly the addition of Otto Meals's name increases the number of the parties, furthermore it changes the liability of the endorsers in that they are made sureties of Otto Meals. (4) "The signing of a name as a maker to a note is an alteration that will discharge all the original parties not consenting thereto." Allen v. Dorman, 57 Mo.App. 291; Lant v. Silver, 5 Mo.App. 186; Farmers Bank v. Meyers, 50 Mo.App. 157.

Ragland, J. All concur, except Gantt, J., not sitting.

OPINION

RAGLAND

This case comes to the writer for opinion on reassignment. It is a suit on a promissory note. The note was dated April 30, 1921. According to its purport, the defendants, Roswald Meals, Logan Meals, May Meals and Otto Meals, as makers, promised to pay to the order of plaintiff bank, one year after date, $ 15,200, with six per cent per annum interest thereon from date, payable annually. Prior to its delivery it was endorsed in blank by defendants, J. Marvin Meals and Ernest Cottingham, for the accommodation of the makers, the endorsers waiving notice of demand and protest.

The petition is in the usual form. Defendant Roswald Meals by his answer pleads release from liability by reason of a discharge in bankruptcy. Defendant Otto Meals by verified answer denies that on the 30th day of April, 1921, he made and executed the note sued on; he further alleges a total failure of consideration. Defendant May Meals in her separate answer alleges in general terms a failure of consideration. Defendants J. Marvin Meals and Ernest Cottingham in a joint and separate answer set up two defenses: (1) That defendant Otto Meals signed the note sued on long after its execution and delivery by the other parties thereto, by reason of which there has been a material alteration of the note; and (2) that they were compelled to endorse the note through duress in that the officers of plaintiff bank were threatening unless they did so to institute a criminal prosecution against Roswald Meals, their near relative. Defendant Logan Meals has filed no answer. The new matter in all of the answers, except that of defendant Roswald Meals, is put in issue by...