Board of Regents of Southwest Missouri State University v. Harriman

• Decision Date: 07 June 1990
• Docket Number: No. 16727,16727
• Citation: 792 S.W.2d 388
• Parties: 61 Ed. Law Rep. 1441 BOARD OF REGENTS OF SOUTHWEST MISSOURI STATE UNIVERSITY, Plaintiff-Appellant, v. George Daniel HARRIMAN, Defendant-Respondent, Belinda Harriman, Intervenor.
• Court: Missouri Court of Appeals

Page 388

792 S.W.2d 388

61 Ed. Law Rep. 1441

BOARD OF REGENTS OF SOUTHWEST MISSOURI STATE UNIVERSITY Plaintiff-Appellant, v. George Daniel HARRIMAN, Defendant-Respondent Belinda Harriman, Intervenor.

No. 16727.

Missouri Court of Appeals,

Southern District,

Division Two.

June 7, 1990.

Motion for Rehearing or Transfer

Denied June 22, 1990.

Lee Chestnut, Springfield, for plaintiff-appellant.

Glenn A. Burkart, Mann, Walter, Burkart, Weathers & Walter, Springfield, for defendant-respondent and intervenor.

SHRUM, Judge.

The Board of Regents of Southwest Missouri State University (hereinafter referred to as Board) appeals from an order setting aside a default judgment in favor of Southwest Missouri State University (hereinafter referred to as SMSU) against George Daniel Harriman (hereinafter referred to as respondent). The order appealed from also quashed an execution and garnishments in aid of execution issued in an effort to collect the default judgment.

SMSU filed a three-count petition against respondent in May 1985. Each count sought judgment against respondent on different student loan promissory notes alleged to have been signed by respondent. Copies of the notes attached to the petition show Southwest Missouri State University as payee. Respondent filed no responsive pleading. On July 31, 1985, default judgment on all counts was entered in favor of SMSU against respondent. The judgment in total (all three counts) was $11,159.05. In May 1988, SMSU requested garnishment in aid of execution be served on American National Insurance Company, as garnishee, by serving the law firm of Miller and Sanford of Springfield, Missouri. At the time, Miller and Sanford were acting as legal co-counsel for American National Insurance Company, the garnishee. An additional request was made by SMSU for service of garnishment on American National Insurance Company by directing service upon Lewis Crist, Director of the Division of Insurance for the State of Missouri. The legal file contains a third garnishment, issued at the request of SMSU, directed to American National Insurance Company and with instructions that it be served on the law firm of Ellis, King, Ellis and Black of Springfield, Missouri. That firm was also acting as legal co-counsel for the garnishee.

No sheriff's return or proof of service of the levy of execution, service of the notice to garnishee, or service of summons to garnishee is found in the legal file. The Miller law firm and the Ellis law firm filed garnishee interrogatory answers. The answers of the Miller and Sanford firm were as follows:

Law firm of Miller & Sanford, P.C., possess two settlement checks, each made payable to "Daniel Harriman, and his attorneys, Sherwood, Honecker & Bender". Check No. 10039837 from The Hartford is in the amount of $17,666.00. Check No. GX30250530 from CIGNA is in the amount of $8,834.00.

The Ellis law firm filed two sets of answers to the interrogatories. The pertinent part of the first set of interrogatory answers filed by the Ellis firm was as follows:

The law firm of Miller & Sanford, P.C., who is co-counsel for Defendants with the undersigned, possess two settlement checks, each made payable to "Daniel Harriman, and his attorneys, Sherwood, Honecker & Bender". Check No. 10039837 from The Hartford is in the amount of $17,666.00. Check No. GX30250530 from CIGNA is in the amount of $8,834.00. The undersigned has no property of the Defendant under his control or in his possession.

The pertinent part of the second set of interrogatory answers filed by the Ellis firm was as follows:

We have no property or money or effects of Defendant in our control or possession. However, the law firm of Miller & Sanford, P.C., which is co-counsel for Garnishee with the undersigned, possess two settlement checks, each made payable to "Daniel Harriman, and his attorneys, Sherwood, Honecker & Bender". Check No. 10039837 from The Hartford is in the amount of $17,666.00. Check No. GX30250530 from CIGNA is in the amount of $8,834.00. Said checks are issued as consideration for settlement of a lawsuit by Mr. Harriman against the Garnishee, but are not paid by the Garnishee and are not under its control.

The garnishee interrogatory answers were filed May 27 and June 7, 1988, respectively. On June 21, 1988, a motion was filed by respondent George Daniel Harriman and his wife Belinda Harriman seeking to intervene in the garnishment proceeding on the basis that they had an interest in the funds as tenants by the entirety. The motion to intervene was sustained on July 7, 1988. Other post judgment motions were filed, ¹ including Intervenors' (respondent George Harriman and his wife Belinda) Motion to Quash the Writs of Execution and Garnishment and to Set Aside Judgment and to Dismiss. The motion was based in part upon the assertion by intervenor that SMSU had no "standing" to sue at the time of the institution of the lawsuit and that only the Board of Regents of Southwest Missouri State University had "standing" to sue. Intervenor asserted that the lack of "standing" by SMSU left the trial court without jurisdiction to enter the default judgment. Intervenor's motion also asserted there was no proper service of summons and no proper notice of garnishment served upon American National Insurance Company. The trial court sustained intervenor's motion and set aside the default judgment as void ² and quashed the execution and garnishments. It is from that order that this appeal is taken.

The Board and SMSU acknowledge that SMSU is not a legal entity separate from its Board of Regents. The brief filed on behalf of SMSU ³ states:

The appellant agrees with the respondent that the underlying suit should have been brought in the name of the Board of Regents.

... There is no separate entity, by the legal name of "Southwest Missouri State University." The university itself had and has no legal capacity to sue or be sued as "Southwest Missouri State University".

Their position is correct and is grounded in the various provisions of Chapter 174, RSMo 1986, ⁴ which clearly evidences an intention and direction that the control and management of Southwest Missouri State University be vested in the Board of Regents not in SMSU itself as a separate legal entity. The courts of this state have long recognized that the quasi corporate entity in which the legislature has vested sole authority and responsibility for governing and managing state schools of higher learning are the Boards of Regents and Boards of Curators of the respective schools.

The several educational institutions ... are under the control and management of a Board of Curators or of a Board of Regents.... Mo.R.S.A. §§ 10753, 10760; Head v. Curators of the University of Mo., 47 Mo. 220, 224.

Board of Regents v. Palmer, 356 Mo. 946, 951, 204 S.W.2d 291, 294 (1947). See also Todd v. Curators of University of Missouri, 347 Mo. 460, 465, 147 S.W.2d 1063, 1065 (1941); State ex rel. Bd. of Regents v. Bonacker, 765 S.W.2d 341, 348-49 (Mo.App.1989). Clearly, there is no separate legal entity known as Southwest Missouri State University. It is equally clear, however, that the real party in interest in this case, namely the Board of Regents of Southwest Missouri State University, was designated in this lawsuit by a name it has adopted and become known by (SMSU). The Board of Regents operate and conduct the business of a major university by a name commonly known as Southwest Missouri State University. The use of such "fictitious" name is expressly sanctioned by the legislature in § 174.020 and by § 174.030 the legislature authorized the Board of Regents to change that "fictitious" name. ⁵ Where the real party is designated by a name it has adopted and become known by, no reason can be perceived for setting aside a judgment for lack of a legal plaintiff. Bowen v. Buckner, 171 Mo.App. 384, 387-88, 157 S.W. 829, 830 (1913). This is especially true in this case where respondent was doing business with SMSU. This court has held that:

As between the parties, for purposes of litigation, there may be an estoppel to deny corporate existence. 18 C.J.S. Corporations § 108. It is a well-settled principle that where one contracts with a body assuming to act as a corporation or by a name distinctly implying corporate existence, both parties in a suit upon contract are usually estopped from denying corporate existence. (Emphasis added.)

Berkel & Co. Contractors v. JEM Dev., 740 S.W.2d 683, 686 (Mo.App.1987). Also, see Bader Automotive & Indus. Supply Co. v. Green, 533 S.W.2d 695, 699 (Mo.App.1976).

By not filing responsive pleadings, respondent admitted entering into a contract with SMSU. He admitted executing the notes made payable to SMSU. He also admitted there was consideration and that he accepted benefits under the contract. That is a tacit admission by respondent that a legal entity exists. There is no showing that the use of the name of SMSU in dealing with respondent affected the performance of SMSU or the performance of the Board of Regents, the real party in interest. SMSU did what it was obligated to do by the contract or note terms, i.e., loan money to respondent.

It is a well settled principle that "(w)here one contracts with a body assuming to act as a corporation or by a name distinctly implying a corporate existence, both parties in a suit upon the contract are usually estopped from denying such corporate existence ". White v. Bellafontaine Lodge, I.O.O.F., 30 Mo.App. 682, 684; Bradley v. Reppell, 133 Mo. 545, 32 S.W. 645, 647; School Consolidated Dist. No. 10 of Arbyrd v. Wilson, 345 Mo. 598, 135 S.W.2d 349, 354; Farmers' and Merchants' Ins. Co. v. Needles, 52 Mo. 17, 19; 18 C.J.S. Corporations § 111(a). (Emphasis added.)

Schneider v. Best Truck Lines, Inc., 472 S.W.2d 655, 659 (Mo.App.1971). Had respondent filed an answer or other responsive pleading and successfully raised, as a defense, lack of execution of the notes or lack of...