Cooper County Bank v. Bank of Bunceton

• Decision Date: 06 October 1925
• Docket Number: 24685
• Parties: COOPER COUNTY BANK, Appellant, v. BANK OF BUNCETON
• Court: Missouri Supreme Court

276 S.W. 622

310 Mo. 519

COOPER COUNTY BANK, Appellant, v. BANK OF BUNCETON

No. 24685

Supreme Court of Missouri

October 6, 1925

Appeal from Cooper Circuit Court; Hon. John G. Slate Judge.

Transferred to Kansas City Court of Appeals.

Montgomery & Rucker for appellant.

Roy D Williams for respondent.

OPINION

Blair J.

Action to rescind a contract for the sale of a promissory note and deed of trust. Judgment below was for defendant, and plaintiff has appealed. The appeal was granted to this court because a constitutional question was raised by defendant below. The petition is in two counts. The first count was based upon mutual mistake of the parties. The second count charged fraudulent misrepresentation.

Plaintiff and defendant are corporations organized under the laws of Missouri and both were engaged in the banking business at Bunceton, Missouri. The Bunceton Ice, Light & Fuel Company was a Missouri corporation, and operated an electric light plant at Bunceton in connection with its ice and fuel business.

On March 30, 1921, the defendant owned a note of the light company for $ 5500, dated July 1, 1920, and payable in ninety days, with interest at eight per cent. Defendant then held what it deemed and what purported to be a valid deed of trust upon all of the property of the light company securing said note.

On said March 30, 1921, plaintiff was the owner of a note of said light company for $ 5000, secured by what it deemed to be a valid second deed of trust upon the same property. At and prior to said date the defendant had advertised for sale under its deed of trust the property of the light company, which included its plant and machinery for generating electricity and the real estate upon which the same were located. On said date plaintiff approached defendant for the purchase of said note for $ 5500, secured by said first deed of trust, and did purchase the same, in order to protect its second deed of trust. The price paid was the face of the note with accrued interest and certain expenses paid by defendant, amounting to $ 5819.69, and defendant indorsed said note to plaintiff without recourse. On May 20, 1921, the Bunceton Ice, Light & Fuel Company was adjudged a bankrupt.

Said light company was engaged in furnishing electricity for light and power to the citizens at Bunceton and vicinity and was a public utility at the time both of the above-mentioned deeds of trust were executed and delivered. Such execution and delivery were not authorized by the Public Service Commission of Missouri, as required by Section 10483, Revised Statutes 1919.

It is conceded that both plaintiff and defendant were unaware of the said statutory requirement at the time they took their first and second deeds of trust, and that neither of them was advised of such requirement on March 30, 1921, when defendant sold and assigned its note and deed of trust to the plaintiff. The petition alleges and the proof shows that plaintiff first learned of the requirement, and the failure of the light company to secure the authorization of the Public Service Commission, after it purchased said note and after the light company had been adjudged a bankrupt. Plaintiff then notified defendant that it elected to rescind the contract for the purchase of said note and deed of trust, tendered them to defendant and demanded of defendant repayment of the purchase money. Defendant refused to accept such tender or to repay to plaintiff the purchase price. Thereafter this action was instituted.

The foregoing sufficiently outlines the facts for a preliminary understanding of the case.

The first question for determination is that of our jurisdiction. The parties have not challenged such jurisdiction, but it is our duty to inquire into and determine that question for ourselves. [In re Letcher, 269 Mo. l. c. 147; In re Bennett's Estate, 243 S.W. 769.]

The amount in dispute does not exceed $ 7500. The supposed presence of a constitutional question forms the only basis for retention by us of jurisdiction. In its answer defendant alleged that said Section 10483 is unconstitutional and void on the ground that it violates Section 53, Subsection 32, of Article IV of the Missouri Constitution, because it attempts to legislate as to corporations and does not include individuals, and is therefore a special law where a general law could be made applicable, and that the distinction is purely arbitrary and not founded in reason or sound public policy. It was further alleged that said section, in discriminating between corporations and individuals engaged in the same business, violates the Constitution of the United States, in that it denies the equal protection of the law to corporations and individuals engaged in the same business.

Judgment below was for defendant. Plaintiff appealed. There is nothing in the record to show upon which of the several defenses pleaded in the answer the trial court decided the case. That court did not indicate that it decided the case upon grounds other than the alleged unconstitutionality of said Section 10483. For aught appearing in the record such alleged unconstitutionality of said statute may have been one of the grounds, or indeed the sole ground, upon which the trial court found for defendant.

In its brief in this court respondent makes the following statement:

"The constitutional question was not presented to the trial court, and was only raised in the answer as to the second count. There was no evidence tending to support the second count, and the constitutional question was not presented and is not now contended for." (Italics ours).

In this statement respondent is not entirely borne out by the record, because in paragraph XIV of its answer the unconstitutionality of said statute was pleaded as a defense to both counts. It was therefore presented as a defense to the first count, as well as to the second. However, the important thing is that respondent now solemnly advises this court that it is no longer contending for the unconstitutionality of said statute.

In this situation it must be held that the appeal was properly granted to this court in the first instance; but it does not necessarily follow that, because the case was properly sent here, this court must retain jurisdiction. It has been...