Central Trust Company of Mobile v. D'Arcy
| Decision Date | 23 December 1911 |
| Citation | 142 S.W. 294,238 Mo. 676 |
| Parties | CENTRAL TRUST COMPANY OF MOBILE v. EDWARD D'ARCY, Trustee of F. H. SMITH LUMBER COMPANY, Appellant |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court -- Hon. Geo. H. Shields Judge.
Affirmed.
G. L Edwards and Edward D'Arcy for appellant.
(1) The judgment in the case against the F. H. Smith Lumber Company was obtained without a hearing of the only party entitled to be heard, and is, therefore, void. Keele v. Keele, 118 Mo.App. 262; Windsor v. McVeigh, 93 U.S. 274; Hovey v. Elliott, 145 N.Y. 126; S. C., 167 U.S. 409 42 L.Ed. 215; Pennoyer v. Neff, 95 U.S. 673, 24 L.Ed. 565; Dartmouth College Case, 17 U.S. 581. (2) The petition in the suit against the F. H. Smith Lumber Company is fatally defective, for the reason that it fails to show a valid contract of guaranty by the F. H. Smith Lumber Company to the Central Trust Company. It shows on its face that the offer was never accepted as made. Potter v. Gronbeck, 117 Ill. 404; 20 Cyc. 1404, n. 45, and 1411, n. 86; 15 Laws of England, 449, n. k.; 7 Id., 350; Morten v. Marshall, 2 H. & C. 305. (3) Unless the pleadings state a cause of action, a judgment founded thereon is void. Weil v. Green County, 69 Mo. 286; Roden v. Helm, 192 Mo. 71; Campbell v. Greer, 197 Mo. 463; Dunlap v. Kelly, 105 Mo.App. 1; Clem v. Meserole, 44 Fla. 234. (4) The judgment is founded on the pleadings, and the points decided must be within the issues raised by them, or the judgment is void. State ex rel. v. Muench, 217 Mo. 124; Charles v. White, 214 Mo. 204; Hope v. Blair, 105 Mo. 93; Munday v. Vail, 34 N. J. L. 418.
Alexander Young for respondent.
(1) The judgment by default against the F. H. Smith Lumber Company, which is the basis of this suit, was regular and according to law, by reason of said defendant's failure to answer or demur. Sec. 1799, R. S. 1911. (2) The petition in that case states a meritorious cause of action against F. H. Smith Lumber Company, defendant therein, and shows a valid contract of guaranty; the guarantor having knowledge of its acceptance it is bound by it. Notice of the acceptance may be proved by circumstances. Childs v. Rankin, 9 Mo. 673; Tolman v. Means, 52 Mo.App. 385; Manufacturing Co. v. Shreve, 94 Mo.App. 518.
The respondent, the plaintiff below, brought this suit against the appellant, to compel him, as trustee of the assets of F. H. Smith Lumber Company, to allow, and pay out of the trust funds in his hands, a certain judgment obtained by the former against the latter.
The facts of the case are practically undisputed, and are as follows:
The respondent was a banking and trust company, organized and doing business under the laws of the State of Alabama, with its place of business at Mobile, in that State.
The F. H. Smith Lumber Company was incorporated and doing business under the laws of Missouri, with its chief office in the city of St. Louis, where it had extensive lumber yards, for the storage of lumber, bought by and shipped to it from various States of the Union, and from which it made sales of lumber and shipped the same to its numerous customers throughout this country and Europe.
The Hardwood Export Company was incorporated under the laws of Illinois, with its chief office at the city of Cairo. This company also had and maintained an office in the city of St. Louis, and another at Mt. Vernon, Alabama, at or near which place it owned many thousands of acres of timber lands, also extensive sawmills, drying houses, kilns, sheds and other appliances and machinery used in manufacturing its timber into lumber and preparing it for sale.
The business relations that existed between these two lumber companies were very close, and apparently they were financially interested in each other. At any rate, the dealings and transactions between them were numerous and extensive, the latter sawing its timber into lumber and preparing it for market, and the former purchasing much if not all of it, and selling it to its own customers throughout the United States and Europe.
In furtherance of that relation and the dealings between them, on August 10, 1903, the F. H. Smith Lumber Company made and delivered to the respondent, the Trust Company, the following written guaranty, viz.:
The Trust Company, with this guaranty in its possession, and relying upon it, thereafter, on November 11th, 1903, lent to said Hardwood Export Company $ 5,000, taking its note therefor, executed as provided for in said guaranty, and due ninety days after date. On December 12, 1903, while still holding and relying upon said guaranty, the Trust Company loaned to the said Hardwood Export Company a further sum of $ 5,000, evidenced by a note of that date, due in sixty days thereafter, also executed as provided by said guaranty. These loans were made in the due course of business; and, under the laws of Alabama, said notes bore eight per cent interest.
On December 24, 1903, the Hardwood Export Company became insolvent and was unable to pay its debts. According to due process of law, all its property and effects were sold, and the proceeds thereof were legally distributed among its creditors, $ 599.48 of which was paid to the Trust Company on said notes, leaving a balance due thereon of $ 9400.52, with interest.
On December 24, 1903, the F. H. Smith Lumber Company, by its deed of that date, conveyed all its property of every kind to a trustee, in trust for the following purposes, viz.:
1. To pay the reasonable attorneys' fees for services rendered in the preparation of this conveyance, to pay all costs and expenses, including reasonable counsel and attorneys' fees, incurred in executing the trust herein, including compensation to the said trustees, the survivor and successor thereof, for executing the said trust, as is referred to and stated hereinafter, the amount of premiums for the bonds required of said trustees hereinafter provided for, all taxes on the trust property due and payable at any time, all premiums for insurance on said property, all claims and demands for work and labor done or material furnished, which by the statutes of any State or States are made a lien upon any of the property held under said trust, and which by virtue of said statutes are entitled to priority of payment over other debts and to pay all indebtedness of every kind and nature incurred or created by said parties of the second part, their survivor or successors, in executing this trust.
2. To pay from time to time from the cash on hand, to the present creditors of said party of the first part, pro rata according to the indebtedness of said party of the first part to them owing, such sums as said parties of the second part may deem safe and convenient to pay, taking into consideration the condition of said trust estate, and after all debts, demands, claims and liabilities incurred and created by said parties of the second part, their survivor or successors, in executing this trust shall have been paid, and all debts, claims and demands and liabilities of the said party of the first part now existing, with interest thereon at the rate of six per centum per annum shall have been paid, then the said parties of the second part, their survivor or successors, shall reconvey to said party of the first part all the property, of every kind and nature whatsoever, in their hands or to them belonging under this conveyance.
The trustee of the latter company has been collecting up the assets thereof and applying the same to the payment of its debts, as provided for by said deed of conveyance, excepting said debts of the Trust Company, which he refused and still refuses to pay, or any part thereof, out of the assets of said company, although having in his hands sufficient assets to pay the same percentage of its debt, that he has paid to all the other creditors.
Upon that state of facts the Trust...
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