Bankers' Mortg. Co. v. Lessley
| Decision Date | 13 October 1930 |
| Docket Number | 28886 |
| Citation | 31 S.W.2d 1055 |
| Parties | BANKERS' MORTGAGE CO. v. LESSLEY |
| Court | Missouri Supreme Court |
Kirshner, Remley & Stroheker, of Kansas City, and Lionel Davis, of Fayette, for appellant.
Sam C Major, of Fayette, and J. H. Denny, of Glasgow, for respondent.
Plaintiff, a corporation, sued defendant in the Howard county circuit court upon three promissory notes, all dated April 30, 1924, executed by defendant and payable to plaintiff, two being for $ 1,000 each and one for $ 2,000. Defendant filed answer and counterclaim. At the close of the evidence the court directed a verdict for plaintiff upon the counterclaim. Defendant did not appeal. The jury returned a verdict for defendant in plaintiff's action on the notes, from the judgment on which plaintiff appeals.
Plaintiff's petition in three counts, one for each note, is an ordinary petition for recovery upon the notes. Defendant's answer sets up two defenses. One was in substance that defendant was induced by false representations of plaintiff's agents to subscribe for one hundred shares of the capital stock of plaintiff corporation of the par value of $ 100 each at $ 130 a share and to execute to plaintiff his notes therefor in the aggregate sum of $ 13,000, and that plaintiff agreed that, in consideration for said notes, it would at once issue to him said one hundred shares of stock; that the stock, though demanded by him, was never delivered to him; that the notes sued on were renewals of part of the original notes and therefore by reason of the facts alleged were without consideration. The other defense was that plaintiff agreed to accept the original notes in payment for the stock, and that such agreement 'was contrary to the Constitution, article 12, section 8, and the laws of this state, section 9740, R. S. 1919,' wherefore the original notes and the renewal notes were without consideration and void.
By reply plaintiff avers that it was at all times willing 'to deliver to defendant all stock subscribed for by him upon payment being made for the stock'; denies that the notes sued on were renewals of notes previously given, and alleges that they 'were given and accepted under an agreement for compromise and settlement of a claim of this plaintiff against defendant,' which is thus stated: 'Plaintiff further says that the defendant did on April 23rd, 1920, execute and deliver to plaintiff his promissory note in the principal amount of $ 4,750.00 and did on and about May 26, 1920, execute and deliver to plaintiff his promissory note in the amount of $ 4,750.00, both of said notes being due six months after date; that in response to the demand of plaintiff, made in good faith, that said notes be paid, defendant did on November 22d, 1920, execute and deliver to plaintiff in payment for said two notes the sum of $ 289.40, and one note in the principal amount of $ 9,500.00, due six months after date; that thereafter, this plaintiff in good faith demanded of defendant the payment of said note for $ 9,500.00, and defendant thereupon on April 30, 1924, entered into a new agreement with plaintiff for the compromise and settlement of its said demand for the payment of said note of $ 9,500.00, and in pursuance of and in accordance with said compromise and settlement agreement defendant surrendered to plaintiff his rights under a certain stock subscription contract, off-set a payment of $ 100.00 made by him on said note and two dividends on stock credited on said $ 9,500.00 note, against the accrued interest due on said note, and gave to plaintiff the three notes herein sued on as part consideration for the settlement and compromise of the said demand of plaintiff, and said $ 9,500.00 note was surrendered to and accepted by defendant in pursuance of and accordance with said new agreement for compromise and settlement, and said new agreement was entered into and carried out by both plaintiff and defendant in good faith and under the honest belief by both parties that the said demand of plaintiff for payment of said $ 9500.00 note was valid and maintainable.'
There is a further plea of estoppel in the reply, which issue appears to have been abandoned by plaintiff and need not be noticed. The pleadings and evidence relative to the counterclaim may likewise be disregarded, since there was no appeal from the judgment on the counterclaim.
The notes sued on came into existence in this wise: The plaintiff, Bankers' Mortgage Company, is a Missouri corporation. By contract with one Albert S. White, dated December 26, 1919, it appointed White its 'fiscal agent' and authorized him to sell the then remaining unissued and unsold portion of its $ 800,000 authorized capital stock and also an additional $ 200,000, 'over and above the present capitalization of said company.' Presumably authority to issue the additional $ 200,000 was to be obtained. By the contract white was made 'sole and exclusive fiscal agent' for the company with the exclusive right to sell and dispose of said stock for a period of six months, and with the right to employ such 'sub-agents and assistants' as he deemed necessary, and was authorized to accept in payment for capital stock sold, 'cash, * * * negotiable notes. * * * or other good, valid and binding evidences of indebtedness,' negotiable instruments when taken to be made payable to the Bankers' Mortgage Company. The stock was to be sold at $ 130 per share, of which White was to get 20 per cent. on stock sold in Missouri and 17 per cent. on stock sold in Kansas. White appointed, among others, two salesmen named Okey and Carson who, about April, 1920, called upon defendant and persuaded him, as he claims by alluring promises and false representations, to buy stock. He made two purchases, each of fifty shares, at $ 130 per share,the second subscription or purchase being a few weeks after the first. On each occasion he signed and delivered to plaintiff's agents two notes, one for $ 1,750, payable to his own order and indorsed by him without naming an indorsee, and one for $ 4,750, payable to the Bankers' Mortgage Company. The two $ 1,750 notes later appeared in the hands of one Reynolds who had accompanied Okey and Carson and helped persuade defendant to buy the stock. Reynolds, claiming to be an innocent purchaser, later sued and recovered on those notes, and it was the money paid to Reynolds on those notes that defendant sought to recover from plaintiff by his counterclaim.
The two notes of $ 4,750 each were delivered to plaintiff. When these notes matured defendant paid plaintiff the interest due, $ 289.40, and executed to it a new note of $ 9,500, which it is admitted in the evidence was a renewal of the two $ 4,750 notes without any new consideration. The $ 9,500 note was given about November, 1920. There seems to have been some interest payment made upon it, but nothing was paid on the principal until the transaction presently to be noted in April, 1924.
The certificates for the stock purchased by defendant were not actually delivered to him. He testified that the salesmen, Okey and Carson, assured him at the time of each purchase that the stock certificate would be sent to him within a week or so, but, though he had later asked the officers of the company for them, they did not give the certificates to him nor give him any explanation of why they did not deliver them. It appears from plaintiff's evidence that a certificate showing defendant to be the owner of one hundred shares was made out, signed, and sealed, but that it was not detached from the stock book. There had been some kind of written instrument, referred to as a subscription contract, executed by defendant when he bought or subscribed for the stock, but it was not offered in evidence. Plaintiff said at the trial it had been surrendered to defendant when the notes sued on were taken, which defendant did not deny.
The $ 9,500 note was not paid when due. After its maturity plaintiff was demanding payment, and after some correspondence between the parties, and, as defendant says, several visits by him at plaintiff's Kansas City office where he had conferences with plaintiff's officers, he called at plaintiff's office on April 30, 1924, when an agreement was reached and the notes sued on in this case were given.
For our present purpose it is unnecessary to summarize the evidence further than to say that on plaintiff's part it tended to show that plaintiff had been demanding of defendant payment of his note, and that on April 30, 1924, there was some discussion between defendant and plaintiff's vice president, Mr. Duncan, acting for plaintiff, in which defendant said he was unable to pay and wanted to make a settlement and get it off the books and out of the way, and that Okey and Carson had misrepresented the stock, and that Duncan finally agreed to make certain deductions from the amount of interest due, to allow defendant $ 5,500 for his stock and cancel it and take defendant's notes for $ 4,000, all in settlement of his $ 9,500 note and his subscription contract, to which defendant agreed. Defendant's testimony as to what occurred April 30 is rather rambling and indefinite. He did not deny Duncan's testimony, except that he said: 'No, I didn't make any settlement with him, they had everything in their hand,' and said he turned the stock over to Duncan 'there was nothing else to do.' He admitted executing an assignment which reads as follows: ...
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