Berne v. Stevens

• Decision Date: 12 May 1923
• Docket Number: 5153.
• Citation: 215 P. 803,67 Mont. 254
• Parties: BERNE v. STEVENS.
• Court: Montana Supreme Court

215 P. 803

67 Mont. 254

BERNE v. STEVENS.

No. 5153.

Supreme Court of Montana

May 12, 1923

Appeal from District Court, Flathead County; C. W. Pomeroy, Judge.

Action by W. C. Berne, trustee, against J. H. Stevens. Judgment for plaintiff, and defendant appeals. Affirmed.

C. S Baldwin and J. H. Stevens, both of Kalispell, for appellant.

B. F Maiden, of Libby, for respondent.

HOLLOWAY J.

This action was brought upon a promissory note for $100, dated September 21, 1920, and due January 1, 1921. In the amended answer it is alleged that the note was executed and delivered under and in pursuance of an alleged trust agreement, dated August 7, 1920, and not otherwise; that the trust agreement never became operative; and that the note is without consideration. In an amended reply plaintiff denied that the note was executed and delivered solely in pursuance of the terms of the trust agreement, and further pleaded facts by which it was sought to avoid the special defense interposed. The trial of the cause resulted in a verdict for plaintiff. A new trial was denied, and defendant appealed from the judgment.

The only errors assigned are predicated upon the refusal of the trial court to give five instructions tendered by the defendant. In each of the first four of these offered instructions the court was requested to charge that it was admitted that the note was executed and delivered under and in pursuance of the trust agreement. In an attempted justification of these requests, counsel for defendant refer to the original reply, in which such an admission appears. It is elementary, however, that when an amended pleading is filed it supersedes the original and the latter at once becomes functus officio (Gettings v. Buchanan, 17 Mont. 584, 44 P. 77; Ben Kress Nursery Co. v. Oregon Nursery Co., 45 Mont. 494, 124 P. 475), and that the party is not bound by the admissions in the pleading which has thus been superseded (Mahoney v. Butte Hardware Co., 19 Mont. 377, 48 P. 545).

If the trial court had given these instructions, or any of them, it would have assumed as a fact a matter which was in issue and for that reason would have erred. Ferris v. McNally, 45 Mont. 20, 121 P. 889. Furthermore, in each of the five requests the court was asked to adopt defendant's construction of the trust agreement, and whether that construction should have been adopted is the principal ground in controversy.

The agreement reads as follows:

"Know all men by these presents, that we, the undersigned stockholders in the Co-operative Publishing Company of Kalispell, Montana, which said company are the owners of that certain newspaper known and designated as the Kalispell Bee, which said paper is at this time a weekly newspaper published in Kalispell, Montana, being aware of the fact that it takes money to operate a newspaper plant and being desirous of making a success of said newspaper, and also being cognizant of the fact that the income from said newspaper plant may not be sufficient at times to take care of and pay any and all debts that might accrue against said business hereby guarantee the sum of $3,000 for the operating of said newspaper from the date hereof until the first day of January, 1921, said sum to be paid at once by cash or bankable note into the hands of W. C. Berne, Trustee, who has been named and designated by the directors of said Co-operative Publishing Company and which said sum or any portion thereof shall be at any and all times between the date hereof and the said first day of January, 1921, at the disposal and use of the said manager of said newspaper, with the approval of said trustee, for the use and benefit and for operating said newspaper plant to at any time draw upon said trustee for such sum or sums of the said $3,000 as he may deem necessary for said purposes and we hereby direct and authorize said trustee to honor and pay over to said manager such sum or sums of said $3,000 as he may from time to time require for the successful operating of said newspaper and plant between the date hereof and the first day of January, 1921. It is further understood that any portion of said sum of $3,000 remaining in the hands of said trustee on the first day of January, 1921, shall be returned to the parties hereto advancing the same prorated. Stock to be issued for any part of this fund used. This contract and agreement to be in full force and effect when thirty or more signatures have been obtained.

Dated this 7th day of August, 1920."

Defendant insists that the agreement never became effective: (1) Because each subscriber did not at once deliver to plaintiff the amount of his subscription in cash or its equivalent, a bankable note; and (2) because the agreement was not signed by 30 persons, each of whom was a stockholder of the Co-operative Publishing Company at the time the subscription was made.

1. While it is true that the agreement provides that every subscriber shall at once deliver to plaintiff the amount of his subscription in cash or bankable note, it does not provide that a failure in this respect shall avoid the agreement or postpone the time when it shall take effect; on the contrary, it is provided specifically that the agreement should become operative as soon as 30 or more signatures have been obtained. The designation of this single contingency upon the happening of which the agreement should be in full force and effect excludes every other consideration. The maxim, "Expressio unius exclusio alterius," applies to the interpretation of contracts as well as to the interpretation of statutes. 13 C.J. 537.

2. Defendant contends that the agreement was to become effective only when signed by 30 persons, each of whom was a stockholder at the time he attached his signature. For the purpose of illustrating this contention, the agreement may be paraphrased as follows: The undersigned stockholders of the Co-operative Publishing Company guarantee the sum of $3,000 for the use and benefit of and for operating said newspaper plant,...