Dennig v. Meckfessel

• Decision Date: 04 March 1924
• Docket Number: No. 23902.,No. 23901.,23901.,23902.
• Citation: 303 Mo. 525,261 S.W. 55
• Parties: DENNIG et al. v. MECKFESSEL et al. (2 cases).
• Court: Missouri Supreme Court

261 S.W. 55

303 Mo. 525

DENNIG et al. v. MECKFESSEL et al. (2 cases).

No. 23901.

No. 23902.

Supreme Court of Missouri, Division No. 2.

March 4, 1924.

Motion for Rehearing Overruled April 7, 1924.

Appeal from St. Louis Circuit Court; Robert W. Hall, Judge.

Two separate cases by Louis E. Dennig and others against F. B. Meckfessel and others. From judgments of dismissal, plaintiffs appeal. Affirmed.

Frank & Stamm, of St. Louis, for appellants.

McCarthy, Morris & Zachritz,, Nagel & Kirby, and Everett Paul Griffin, all of St. Louis, for respondents.

HIGBEE, C.

These are companion cases and were argued and submitted together. They are actions for contribution between coguarantors. The petitions were filed June 8, 1920. Plaintiff paid the common obligations in one case on April 14, 1913, and in the other on June 30, 1913. Prior to the trial formal demurrers to the petitions on the ground that each action, on the face of the petition, was barred by the five-year statute of limitations, were overruled. At the trial, however, a demurrer, ore tenus, was sustained in each case, the petition dismissed, and judgment rendered accordingly, from which plaintiffs appealed.

The petitions, which are very lengthy, may be summarized:

Louis Schaefer, Gustav Bischoff, Gustav Bischoff, Jr., Heinrich Bischoff, and Buettner, together with the defendants, F. B. Meckfessel, Theodore Crusius, and W. F. Eicks, were stockholders in the J. Buettner Furniture & Carpet Company, a corporation doing business in the city of St. Louis. The company being in financial straits, these stockholders in the year 1909 arranged for loans with the Manchester Bank and the National Bank of Commerce, both of said city, and executed to each bank a written obligation to repay all sums loaned, not to exceed $30,000 by the Manchester Bunk, and $150,000 by the Bank of Commerce. The Manchester Bank accordingly loaned the furniture company at various times $21,500, taking its five notes therefor. The Bank of Commerce also made loans totaling $145,000, taking 29 notes from the company, each for the sum of $5,000. Thereafter Louis Schaefer and Heinrich Bischoff died, and their representatives and Gustav Bischoff, on demand, paid the Bank of Commerce on April 14, 1913, the principal of the notes, $145,000, and the said representatives and Gustav Bischoff and Gustav Bischoff, Jr., on June 30, 1913, paid the Manchester Bank the principal of its notes, $21,500, all interest having been paid on both sets of note: to said dates. J. H. Buettner subsequently paid his share of these sums to the paying guarantors. Between July 10, 1913, and May 17, 1915, the furniture company made various payments on the Manchester Bank notes, totaling $2,221.55, and on the Bank of Commerce notes, $16,844.21.

In February, 1915, the furniture company made a general assignment of its assets to L. B. Dennig and Gustav Bischoff, trustees, for the benefit of all its creditors. Dividends were paid, $10,182.06 on the Manchester Bank loans and $68,669.49 on the Bank of Commerce loans. The last dividend was paid on March 22, 1920. Gustav Bischoff having died since the appeal was taken and his personal representatives having entered their appearance, the actions have been revived by consent. For brevity's sake the parties will be spoken of as plaintiffs and defendants.

1. Appellants assign error in the ruling of the court that the actions were barred by the five-year statute of limitations (section 1889, R. S. 1909). Their contention is that all of the guarantors were officers and stockholders of the corporation; that the paying guarantors, the plaintiffs, received all of the assets of their principal obligor, the corporation, as trustees for all of its creditors and as trustees for their coguarantors, and as such could not maintain an action for contribution against their coguarantors pending the trusteeship and until they could show that the property received by them was insufficient to satisfy the debt and until the net amount subject to contribution had been definitely ascertained; that is, on March 22, 1920, when the final dividend was paid. The plaintiffs paid the common debts or obligations of the guarantors, one on April 14, 1913, and the other on June 30, 1913.

The rule is that the right of action accrues when a surety pays the common debt or obligation or has paid more than his share of it. 13 C. J. 833; Petty v. Tucker, 166 Mo. App. 98, 101, 148 S. W. 142.

In Burrus v. Cook, 215 Mo. 496, 114 S. W. 1065 (adopting the dissenting opinion of Ellison, J.), it is said:

"So that, the general law and the statute taken together amount to this: That a surety, upon payment of the debt, has a right to the instrument upon which he is surety, with all the rights, securities, and liens, which attach to it, but he must assert those rights within five years after such payment. `Where a surety who has paid the debt does not act before his claim is barred at law by the statute of limitations, manifesting his intention to put himself in the place of the original creditor, and thereby subrogating himself to the creditor's rights, equity will not subrogate him to those rights.' 1 Brandt on Suretyship (3d Ed.) § 339."

2. The further convention is that plaintiff's cause of action did not arise until the assignees of the furniture company had administered the assets and the net amount subject to contribution had been ascertained. We might dismiss this contention at once for the reason the furniture company never turned over any assets or securities to the plaintiffs. Nearly two years after payment of the obligations the furniture company made a general assignment for the benefit of all its creditors. It is said all the stockholders agreed to this assignment and that the assets mainly consisted of notes and accounts. Assume this was an indemnity; does it follow that plaintiffs must delay their actions until it is ascertained what dividends the assets will pay? This theory is unreasonable; the plaintiffs were entitled to contribution the moment they paid the common obligations.

"Although there is a conflict of authority on the subject, the weight authority seems to be that the fact that the surety who pays the debt has in his hands an indemnity other than money, and more or less valuable, will not prevent him from suing a cosurety for contribution, and recovering such amount as he is then entitled to, irrespective of the sum that may afterwards be realized from the indemnity; but he will be accountable to the cosurety for a proper proportion of whatever sum he may afterwards realize from the indemnity." Brandt on Suretyship and Guaranty (3d Ed.) § 300.

In Friedman v. Maltinsky, 260 Pa. 312, 317, 103 Atl. 731, 733, it was said:

"Plaintiffs' claim in the present case is a simple one for contribution; but it is urged for defendant that it involves an accounting by plaintiffs for the receipts and expenditures of the property above referred to and that...