Davis v. Holliday

• Decision Date: 04 June 1945
• Docket Number: 39328
• Parties: Harley Davis, Appellant, v. Robert Holliday et al
• Court: Missouri Supreme Court

188 S.W.2d 40

354 Mo. 10

Harley Davis, Appellant, v. Robert Holliday et al

No. 39328

Supreme Court of Missouri

June 4, 1945

Appeal from Carroll Circuit Court; Hon. James S. Rooney Judge.

Affirmed and remanded (with directions).

Roy D. Williams for appellant.

(1) The verdict was for the right party. The defendants produced no principle that could be sued. Ferris v. Thaw, 5 Mo.App. 279; Phoenix Ins. Co. v. Burkett, 72 Mo.App 1; Heath v. Goslin, 90 Mo. 310; Lapsley v McKinstry, 38 Mo. 245; Murphy v. Holliway, 16 S.W.2d 107; 4 Am. Jur., sec. 1; McIntyre v. Livestock Assn., 11 S.W.2d 77; Methodist Episcopal Church, South, v. Clifton, 78 S.W. 732; Devoss v. Gray, 22 Ohio St. 159; Trustees of Christian Church v. Cox, 78 Ill.App. 222. (2) The answer being a general denial and defendants standing upon a demurrer the court did not err in directing the verdict for the plaintiff, there being nothing to submit to the jury. Cowell v. Employers' Ins. Co., 34 S.W.2d 710; Prideaux v. Plymouth Securities Co., 84 S.W.2d l.c. 169; Tomnitz v. Employers' Liability Co., 121 S.W.2d l.c. 752; Ward v. Kurn, 132 S.W.2d 253. (3) The terms of the contract are not binding as the contract was not relied upon by the defendants, but was denied by them. Nelson v. K.C. Pub. Serv. Co., 30 S.W.2d l.c. 1048; Arnold v. Brotherhood, 101 S.W.2d l.c. 733.

F. A. Culmer, Charles L. Graham, Robert L. Hoy and W. T. Bellamy for respondents.

(1) Under the law in effect on February 23, 1928, the date of the contract, the Methodist Episcopal Church South of Fayette, Missouri, was a suable entity -- a principal that could be sued. Sec. 1186, R.S. 1919; Sec. 880, R.S. 1939; State ex rel. Great American Home Savs. Institution v. Lee, 233 S.W. 21, 288 Mo. l.c. 703; Mayes v. United Garment Workers, 6 S.W.2d 333, 332 Mo. 10; Hubbard v. Hubbard, 264 S.W. 422; Barker v. St. Louis County, 104 S.W.2d 371; Douglas v. Pike County, 25 L.Ed. 968; Van Hoffman v. Quincy, 4 Wall. 535, 18 L.Ed. 402; Gelpcke v. Dubuque, 1 Wall. 175, 17 L.Ed. 520. (2) Where a board in control of a voluntary association makes a contract by which it is agreed and understood that the members of the board will not be individually bound, then they will not be bound even though there is no responsible principal behind them. Heath v. Goslin, 80 Mo. 310; Riffe v. Proctor, 99 Mo.App. 601; Lorimer v. McGreevy, 84 S.W.2d 667, 229 Mo.App. 970; Taylor v. Davis, 28 L.Ed. 163, 110 U.S. 330; Davis & Rankin v. Hendrix, 59 Mo.App. 444; Michael v. Jones, 84 Mo. 578; Murphy v. Holliway, 16 S.W.2d 107, 223 Mo.App. 714; International Store Co. v. Barnes, 3 S.W.2d 1039; Farmers' & Merchants' Bank v. Ratliff's Estate, 297 S.W. 84, 222 Mo.App. 215; 126 A.L.R. 119 note; 2 Am. Jur. 248. (3) The evidence of plaintiff's having acquired any rights under the loan contract and as to his ownership of the notes being entirely oral, it was error for the court to give the jury the peremptory instruction to find for plaintiff. Gannon v. Laclede Gas Light Co., 145 Mo. 502; Cluck v. Abe, 40 S.W.2d 558, 328 Mo. 81; State ex rel. Brewing Co. v. Ellison, 226 S.W. 577, 286 Mo. 225; Foster v. Metropolitan Life Ins. Co., 233 S.W. 399; State ex rel. v. Trimble, 271 S.W. l.c. 47, 307 Mo. 536. The question of plaintiff's ownership of the notes is raised by general denial. Worrell v. Roberts, 58 Mo.App. 197. (4) Plaintiff pleaded all the facts, including the loan contract, which shows the defense of the defendants and an absence of any meritorious cause for plaintiff and it was not necessary for defendants to file other than a general denial. Sissel v. St. Louis & S.F.R. Co., 214 Mo. 515, 113 S.W. 1104; Iman v. Bread Co., 58 S.W.2d l.c. 480, 332 Mo. 467; Hardcastle v. Pullman Co., 10 S.W.2d 933, 320 Mo. 1239; Harris v. K.C. Southern Ry. Co., 250 Mo. 567, 157 S.W. 564; State ex rel. v. Hostetter, 131 S.W.2d 558, 345 Mo. 102; Kennedy v. Natl. Acc. & Health Ins. Co., 76 S.W.2d 748. (5) The plaintiff was not a holder in due course of the notes. Secs. 3046, 3064, R.S. 1939; Newton County Bank v. Holdeman, 9 S.W.2d 852, 223 Mo.App. 164; Carter v. Butler, 174 S.W. 399, 264 Mo. 306. (6) Contracts are to be construed as a whole and every part given effect to determine the true intent of the parties and two contemporaneous writings upon the same subject matter are to be construed as one contract. St. Louis Union Trust Co. v. McGovern Co., 249 S.W. 68, 297 Mo. 527; Swinney v. Continental Bldg. Co., 102 S.W.2d 111, 340 Mo. 511; Simpson v. Van Laningham, 267 Mo. 286, 183 S.W. 324; Trautmann v. Schroeder, 93 S.W.2d 303, 230 Mo.App. 985; Meyers v. Union Electric L. & P. Co., 66 S.W.2d 565, 334 Mo. 622; Thomas v. Utilities Bldg. Corp., 74 S.W.2d 578, 335 Mo. 900; Leesemann v. Schulte, 24 S.W.2d 1083; Williams v. Kessler, 295 S.W. 482. (7) The action for money lent is available only to the payee of the note and not the endorsee. 40 C.J. 3; Rockefeller v. Robinson, 17 Wend. 206.

Bradley, C. Dalton and Van Osdol, CC., concur.

OPINION

BRADLEY

Action to recover on two renewal notes, one for $ 7,000 and the other for $ 7,500. At the close of the case the court directed a verdict for plaintiff and the jury returned a verdict for $ 20,355, which included interest. Motion for a new trial was sustained and plaintiff appealed.

The cause was commenced in Howard County, but the venue was changed to Carroll County. The notes were dated April 22, 1936; were due one year after date, and were payable to the Fayette Bank. They were signed, "Methodist Episcopal Church South of Fayette, Missouri, by D. C. Rogers, president, Rowland Ricketts, Sec. & Treas., Board of Stewards." Hereinafter we refer to the Fayette Bank as the Bank, and to the Methodist Episcopal Church, South, of Fayette, as the Church. Defendants are members of the board of stewards of the Church, and plaintiff contends that the defendants as such members are personally liable on the notes.

The amount of the two notes is the balance due on three notes aggregating, when executed, $ 30,000, and dated February 23, 1928. The original notes were for $ 15,000, $ 10,000, and $ 5,000, and were signed in the same manner, as we understand, as the two notes sued on. The execution of the three original notes came about in this way. In 1928, Central College, a Methodist school located in Fayette, hereinafter referred to as the College, embarked upon an expansion program and put on a money raising campaign. The Church wanted to contribute $ 30,000 to the expansion program of the College, and the $ 30,000 was obtained from the Bank by the Church and turned over to the College. In the money raising campaign the College obtained a number of pledges and these, to the extent of more than $ 30,000, were put up with the Bank as collateral to secure the loan of $ 30,000 to the Church. Also, in connection with the loan, the Church executed a fourth note to the Bank for $ 8,000 and secured this note with deed of trust on the Church parsonage, and this note was put up as additional collateral to secure the $ 30,000 loan. We might say here that the grantors in the deed conveying the parsonage lot to the Church in 1872, inserted a clause limiting use to that of a Methodist parsonage, and that the Bank closed November 3, 1935, before the execution of the notes sued on.

February 23, 1928, when the three original notes were executed and the loan of $ 30,000 made, plaintiff and his father were livestock dealers and farmers, and depositors of the Bank. At that time plaintiff had "an individual box of his own" in the Bank, and in 1932 became a director of the Bank. The cashier of the Bank testified that plaintiff "took up", purchased, the $ 15,000 note in March, 1928; that $ 3,000, collected from the pledges to the College, was paid on the notes and that in September or October, 1928, plaintiff "took up" $ 12,000, that is, purchased the other two notes. The three original notes were not endorsed by the Bank when purchased by plaintiff, but were placed in his box. The Bank retained possession of the pledges, collected on them, and turned the collections over to plaintiff, so that on April 22, 1936, when the two renewal notes were executed, there was a balance of $ 14,500 due on the three original notes. The unpaid pledges were turned over to plaintiff "in November or December, 1935, after the Bank closed"; plaintiff delivered these to his attorney, Judge Williams, who "deposited them with the clerk of the circuit court of Howard County when the petition was filed", and it was agreed that these pledges, at the time of the trial, were lost. The only reason given for making the renewal notes payable to the Bank (then closed) instead of making them payable to plaintiff was because "the contract was made to the Fayette Bank."

The contract referred to was executed along with the three original notes on February 23, 1928. This contract was pleaded by plaintiff and introduced in evidence by him, and defendants rely on it to establish that they are not personally liable on the renewal notes. Plaintiff, however, contends that the defendants are precluded from relying on the contract because they answered by general denial only, which plaintiff says is the same as saying the contract "did not exist." No authority is cited which would support this contention, and we do not think that the situation is such as to justify depriving defendants of whatever there is in the contract helpful to them.

The contract was termed a "contract and agreement for loan security and repayment thereof." The Bank was the first party, the Church was the second party, and the College was the third party. It was signed, "The Fayette Bank, by J. F. Denneny, its president, party of the first part; The Methodist Episcopal Church, South, of Fayette, Missouri, by its board of...