Buckman v. Bankers' Mortgage Co.

• Decision Date: 05 February 1924
• Docket Number: Mo. 18008.
• Citation: 263 S.W. 1046
• Parties: BUCKMAN v. BANKERS' MORTGAGE CO.
• Court: Missouri Court of Appeals

263 S.W. 1046

BUCKMAN v. BANKERS' MORTGAGE CO.

Mo. 18008.

St. Louis Court of Appeals. Missouri.

February 5, 1924.

Rehearing Denied June 24, 1924.

Appeal from Circuit Court, Shelby County; V. L. Drain, Judge.

"Not to be officially published."

Action by William Omer Buckman against the Bankers' Mortgage Company, a corporation. Judgment for plaintiff, and defendant appeals. Affirmed.

Walter C. Goodson, of Macon, and Beardsley & Beardsley, of Kansas City, for appellant.

Abbott, Fauntleroy, Cullen & Edwards, of St. Louis, for respondent.

DAVIS, C.

The petition contains three counts, all of which are the same in form, and, as respondent contends, are actions for money had and received. The cause being tried before the court without a jury, plaintiff was awarded judgment on the first count for $927, on the second for $2,781, and on the third for $1,854; the three judgments aggregating $5,562. Defendant (Bankers' Mortgage Company) appeals.

The testimony tends to establish: That Albert S. White, Ira J. Hoover, and others were organizers and later incorporators of the Bankers' Mortgage Company, which was granted a charter by the state of Missouri on December 16, 1919. During the promotion period, however, as early as October 28th previous, the minute book of defendant company produced by it tends to show that, at a meeting of the subscribers to the stock, Ira J. Hoover was elected chairman of the meeting, and that, with fourteen others, Ira J. Hoover and Albert S. White were chosen as directors of the proposed company. At the first stockholders' meeting held December 19, 1919, Ira J. Hoover was elected chairman and Albert S. White, secretary, and at the first directors' meeting held on the same day, said Hoover was elected president, and said White secretary. At a meeting of the board of directors, held on December 26, 1919, the officers were authorized and directed to enter into a contract with said White to act as its fiscal agent, which was accordingly done, the recited consideration being the services heretofore rendered and to be hereafter rendered by White.

The testimony further tends to show that the promoters, before the incorporation of defendant, solicited stock subscriptions, and that on November 24, 1919, plaintiff signed a subscription blank for 25 shares of said stock, for which he gave two notes; note No. 1 being for $875, and note No. 2 being for $2,375. On December 1, 1919, plaintiff signed a second subscription order for 75 shares of stock, and on said date gave two notes, note No. 1 being for $2,625, and note No. 2 for $6,125. On December 9, 1919, plaintiff gave his third subscription order for 50 shares of stock, signing two notes; No. 1 being for 1,750, and No. 2 for $4,750.

The notes for $875, $2,625, and $1,750 were sold to the Commercial Bank at Shelbina, the bank paying for them by giving Albert S. White, secretary, drafts, which were indorsed by Albert S. White, secretary, and the New England National Bank. On January 5, 1920, the defendant receipted White for cash in the sum of $20,446.40 in the New England National Bank, and also receipted for pass books or duplicate deposit slips, showing $10,000 deposit in the Commercial Bank of Shelbina, Mo.

Plaintiff offered Exhibit No. 4. This was a book produced by defendant and in its possession, and the testimony shows that it was a book kept by the defendant company and used by the certified public accountant in his examination of defendant's books. Exhibit No. 4 tends to show that an account was kept with plaintiff, and that he was charged with the number of shares subscribed, and credited with the amounts paid in the sum of $875, $2,625, and $1,750. The record shows that the notes, not discounter by the agent, to wit, notes for $2,375, $7,125, and $4,750, were turned over to defendant and in its possession, and in each instance, about the time the note fell due, defendant notified plaintiff that it held the note, that it was due, demanded payment, and stated that, upon the receipt of a draft for the full amount, a certificate of stock would be issued and mailed to plaintiff.

On February 11, 1920, White, who was then a director and member of the executive committee of defendant, wrote, stating that the notes were held by the defendant. Albert S. White, secretary, acknowledged the subscription in writing. The officers of the company used the notes of plaintiff as collateral security to obtain a loan of $96,000 to complete the necessary amount as paid-in capital to obtain a charter.

Plaintiff testified that the representatives of White, the promoter, said to him that the stock would pay from 18 per cent. to 25 per cent., and that they were selling the stock for him at $130, and that they knew where they could place the stock at $175 in Kansas City or Kansas to a group of men who would buy it as soon as it was all sold, and introduced one Vollmer, and then Groskins, to plaintiff and his brother; that Mockel introduced Vollmer to them as one of the head men of the company. He said that the stock was about all sold, and that at any time we wanted it sold they would resell it—the stuff would be sold. They prepared a contract, handed it to plaintiff, and he read it over. They kept it, saying they would mail it to him, but never did. In a general way the contract was to resell this stock for $175. Plaintiff believed everything they said to him.

Ruth Buckman testified that the representatives of White said that they did not have to take any of the stock if they did not want to; that they could sell it at any time.

Joe Buckman testified that the representatives of White said that it was a good investment, and that the biggest men in the country were subscribing to the stock, and that if he had any money he would make a good investment, and that if he did not want the stock he could dispose of it any time at $175.

The testimony shows that the stock at the time this suit was brought was selling for $75 a share, and since that time has gone as low as $59. Defendant's officers admitted on cross-examination that the stock never was worth $175 per share. As early as February, 1920, plaintiff complained to the company and demanded relief, but was unable to obtain it.

Such other facts as we deem important will be later noted.

Plaintiff's petition is hereinafter briefly set forth. Defendant filed its answer admitting its incorporation, and, after denying every other allegation in each count of the petition, it alleges that a written subscription for stock was, in each case, given, which subscription contained an agreement that 20 per cent. of the subscription price might be used for organization and promotion expenses; and that the balance by them paid, if they failed to pay in full, might be retained as liquidated damages; that if any contracts of resale were made with plaintiffs they were the individual contracts of the promoters of the proposed defendant corporation; that plaintiff did not carry out his contract nor pay the subscription price, and that, if any . contract was made, attempting to bind defendant, when organized, to resell the stock, such contract was ultra vires and void.

I. We are asked to review the action of the trial court in overruling defendant's motions to strike out, to make more definite and certain and to elect, as well as its adverse ruling on the demurrer to the petition. This we may not do, save as to the failure of the petition to state a cause of action. Having answered over, the case stands as if no motions or demurrers had been filed. McManama v. Railroad, 175 Mo. App. 43, loc. cit. 52, 158 S. W. 442, cases cited. In Hanson v. Neal, 215 Mo. 256, 114 S. W. 1073, relative to a motion to elect, the court say:

"Any error in overruling the motion to elect was waived by answering over to the merits. The gist of the motion was the joinder of two separate causes of action. * * * Having joined issue on the merits, invoked a trial and taken chances on such joinder and trial, it is now too late to cut behind and open the closed question of misjoinder."

In Jackson v. Johnson, 248 Mo. 680, loc. cit. 692, 154 S. W. 759, our Supreme Court has ruled that, with the exception of the two vital defects of failure to state a cause of action and dearth of jurisdiction in the court, joinder of issue on the facts waives all defects in the petition. Says the defendant, however, the overruling of the demurrer is brought before this court by the motion in arrest of judgment. The motion in arrest attacks the petition for the cardinal defect of failing to state a cause of action only. But the argument of defendant, in addition to said cardinal defect, which we later discuss, runs to the joinder in the petition of a cause of action ex contractu with a cause of action ex delicto. But, even so, we are not authorized to review it, for a motion in arrest does not bring up for review a demurrable petition, unless it fails to state a cause of action or there is a want of jurisdiction in the court. La Crosse Lumber Company v. Railroad, 197 Mo. App. 546, loc. cit. 552, 196 S. W. 1015.

II. We herewith set forth a synopsis of the petition. Each count covers, briefly stated, the following points:

(1) That Albert S. White and his associates solicited subscriptions to the capital stock (before its organization) of the proposed corporation (appellant herein) at $130 per share.

(2) That, intending to cheat and defraud plaintiff (or plaintiffs), White and his associates stated to each proposed stock subscriber: (a) The stock they were selling at $130 per share was worth $175 per share. (b) The proposed company was being organized on a plan which would enable it to earn 18 per cent. to 20 per cent. dividends per annum. (c) All but a few shares had been sold. (d) The remainder of said stock was being sought by numerous investors at $175 per share. (e) Shares in the proposed company could be readily sold at and for $175 per share.

(3) That...