O'Day v. Sanford

• Decision Date: 02 November 1909
• Citation: 122 S.W. 3,138 Mo.App. 343
• Parties: JOHN O'DAY et al., Appellants, v. E. L. SANFORD et al., Respondents
• Court: Missouri Court of Appeals

122 S.W. 3

138 Mo.App. 343

JOHN O'DAY et al., Appellants, v. E. L. SANFORD et al., Respondents

Court of Appeals of Missouri, Springfield

November 2, 1909

Appeal from the Greene Circuit Court.--Hon. James T. Neville, Judge.

Reversed and remanded.

W. D Tatlow for appellants.

(1) The obligation, although in form a joint one, under the express provisions of the statutes of this State is several as well as joint. The statute provides: "All contracts which, by the common law, are joint only, shall be construed to be joint and several." Sec. 889, R. S. 1899. (2) It has been squarely held by the Supreme Court of this State that the plaintiffs, as legatees of John O'Day, deceased could maintain this action on this obligation. Willis v Barron, 143 Mo. 450; Faulkner v. Faulkner, 73 Mo. 327. (3) The plaintiffs acquired the note by assignment and transfer from the executors of John O'Day, deceased, as part of their distributive share of the estate. That they take by purchase and not by descent is elementary. It has been expressly held in this State that in order for there to be an assignment or transfer of an obligation, payable, as in this case, to one of the signers thereof, it was not necessary that the holder of the note by assignment or transfer should be a purchaser thereof for value, in the usual course, before maturity, and without notice of any equities, but that one who purchased after maturity, and who therefore took it subject to any equities, could maintain such action, as the legal effect of such transfer was to vest title to the note in him, subject to such equities as were connected with the note itself, and not such as grew out of an independent and distinct transaction between the original parties. Knaus v. Givens, 110 Mo. l. c. 66; Caldwell v. Dismukes, 111 Mo.App. 570. (4) The case of Willis v. Barron is the last previous ruling of the Supreme Court on the question of law involved in this case, and is controlling authority in this court, under section 6 of the amendment providing for Courts of Appeal. R. S. 1899, pages 93 and 94.

J. T. White for respondents.

(1) A note payable to the order of the maker is an incomplete instrument until negotiated by the payee who is also the maker. Other parties who have signed the note in any capacity are not bound by it until it is made a complete instrument. 1 Daniel on Negotiable Instruments (4 Ed.), sec. 130; Smalley v. Wright, 69 Am. Dec. 112, 44 Me. 442; O'Dell v. Clyde, 57 N.Y.S. 126; R. S. 1899, sec. 459; 4 Eng. and Am. Ency. Law, p. 120 and notes; Muhling v. Sattler, 77 Am. Dec. 172 (Mass.); Chicago Trust Co. v. Nordgren, 42 N. E. (Ill.) 148; Ewan v. Brooks Waterfield Co., 35 L.R.A. 786. (2) The note being incomplete, parties who sign it as comakers or indorsers are not bound by it until it is negotiated. Young v. Chew, 9 Mo.App. 387; First National Bank v. Payne, 111 Mo. l. c. 300; Pitcher v. Barrows, 28 Am. Dec. 306; Glenn v. Sims, 42 Am. Dec. 405; Lowry v. Zunkel, 49 Mo.App. 153; Knaus v. Givens, 110 Mo. l. c. 66. (3) The statutes of this State, copied literally from the New York statute on this subject, settles the proposition laid down under point 1. R. S. 1899, sec. 459; O'Dell v. Clyde, 57 N.Y.S. 126. (4) In order that the note may be negotiated as required by the section of the statute cited above, it must be indorsed and delivered by the payee. Distributing by the executor of the payee is not a negotiation within the meaning of the statute. Lowry v. Zunkel, 49 Mo.App. 153; O'Dell v. Clyde, 57 N.Y.S. 126; Glenn v. Sims, 42 Am. Dec. 405; 29 Cyc., p. 661.

OPINION

GRAY, J.

On August 27, 1908, the appellants filed in the circuit court of Greene county, Missouri, the following petition:

"Plaintiffs state that for value received the defendants executed and delivered to John O'Day the following note and obligation, to-wit: Springfield, Mo., Dec. 30, 1898. Three months after date we promise to pay to the order of John O'Day at Exchange Bank of Springfield, Mo., five hundred dollars. For value received, without defalcation or discount, with eight per cent interest after due until paid. For newspaper mail. John O'Day, E. L. Sanford, H. S. Jewell.

"Plaintiffs further state that on or about the day of August, 1901, the said John O'Day, the ancestor of the plaintiffs, departed this life testate and appointed by his last will and testament E. W. Bannister and Sue I. B. O'Day, the executors thereof, who, after his said will was duly probated in the probate court of this county, duly qualified as said executors.

"Plaintiffs further state that afterwards and under the terms of said will and the orders of said court the said note was duly assigned and transferred to these plaintiffs by said executors as a part of their distributive share of the said estate of John O'Day, deceased.

"Wherefore plaintiffs pray judgment against defendants on said note for five hundred dollars with interest from maturity at eight per cent per annum, and for cost of suit and for such other relief as the plaintiffs may be entitled to thereon."

In proper time the respondents answered admitting the signing of the note and alleging that the payee in said note, John O'Day, ancestor of the plaintiffs, signed said note as maker and as principal therein, and the respondents signed as sureties for him and that O'Day retained said note in his possession until his death, and did not at any time negotiate or transfer the same to any person. The answer further alleged that no consideration was received by the respondents for signing said note.

Appellants replied denying the allegations of the answer, except, it was admitted that John O'Day, the payee, was also one of the signers, and expressly denied that respondents signed said note for the accommodation of O'Day, and alleged said note was signed by all the signers thereof in furtherance of a joint enterprise in which they were all interested, and that said O'Day did not receive anything from such joint enterprise, which was the purchase of a newspaper afterwards turned over to defendant, Jewell, and whatever, if anything was received from the sale of such paper was received by the defendant Jewell.

After the filing of this reply the respondents filed a motion for judgment on the pleadings, which was sustained and judgment entered.

A motion for judgment on the pleadings partakes of the nature of a demurrer, in that, it admits all facts that are well pleaded, but if sustained, judgment goes at once, and in this it differs from a demurrer. If the demurrer as sustained, the order is not a final judgment, the party has a right to plead over. [Sternberg v. Levy, 159 Mo. 617, 60 S.W 1114.] The motion, like the demurrer, raises an issue of law only. [State ex rel. v. Simmons Hardware Co., 109 Mo. 118, 18 S.W. 1125] The motion for judgment is based upon the fact that John O'Day, the payee in the note, was also one of the makers thereof, and it is claimed that an action at law cannot be maintained on a note by the payee, if he is one of the...