Floyd Plant Food Co. v. Moore

• Decision Date: 05 December 1938
• Docket Number: 4-5288
• Citation: 122 S.W.2d 463,197 Ark. 259
• Parties: FLOYD PLANT FOOD CO. v. MOORE
• Court: Arkansas Supreme Court

122 S.W.2d 463

197 Ark. 259

FLOYD PLANT FOOD CO. v. MOORE

4-5288

Supreme Court of Arkansas

December 5, 1938

Appeal from Grant Circuit Court; H. B. Means, Judge; affirmed.

Judgment affirmed.

A R. Cooper, Viola Castleberry Stewart, for appellant.

Isaac McClellan and W. H. McClellan, for appellee.

OPINION

BAKER, J.

The Floyd Plant Food Company was a corporation organized under the laws of Illinois, was engaged in the manufacture and sale of fertilizer and in the course of its business R. L. Moore the appellee, became indebted to it for which he executed two notes, one in the sum of $ 176.85 and the other for $ 1,516.30. The smaller one of these notes was already barred at the time the first suit was filed and does not enter into the controversy. The larger note was dated April 16, 1930 and it matured on November 1, 1930. It was indorsed with the credit of $ 160.67. This indorsement, however, was a correction made in the settlement and not a payment made after the maturity date.

The complaint was filed in the name of the Floyd Plant Food Company on October 29, 1935, three or four days before the date upon which the note would have been barred by the statute of limitations of five years.

On August 17, 1936, a little more than nine months after the filing of the original complaint, the Federal Chemical Company filed what it designated as an amendment to the original complaint of the Floyd Plant Food Company, alleging that it came into the possession of the notes sued on by the first plaintiff by an outright purchase and that the said Federal Chemical Company is now the owner and holder of the promissory note executed by the defendant, and it prayed that it be made a party plaintiff and have judgment against the defendant. To this pleading defendant Moore filed a demurrer, a motion to dismiss and pleaded the statute of limitations. As a response to the defendant's motion to dismiss the Federal Chemical Company pleaded further that in 1934 the Floyd Plant Food Company was dissolved and the Federal Chemical Company took over all its assets, including all cash, accounts and notes, of which the notes sued on were a part. Later an additional amendment was filed and upon the filing of this amendment proof was taken by deposition of Mr. W. Q. Harned, treasurer of the Federal Chemical Company. Mr. Harned, in response to a question asked in the taking of his deposition, in describing the nature of the transaction whereby the Federal Chemical Company became the owner and possessor of the notes, said: "The notes are now owned by the Federal Chemical Company, due to the fact that in 1934 the Floyd Plant Food Company, which was owned by the Federal Chemical Company, was dissolved, and the Federal Chemical Company took over all of its assets, including all cash, accounts and notes, of which these two notes were a part."

The trial court, upon hearing the issues involved in this case, held that the amendment to the complaint, wherein Federal Chemical Company asked that it be made a party plaintiff, was an effort to substitute one plaintiff for another and that such substitution did not become effective and that inasmuch as the two corporations are not identical, the filing of the suit by the one that had no cause of action did not serve to toll the statute of limitations in favor of the one that owned the note and had the right to sue and collect the same, and that the action filed by the Federal Chemical Company was barred by the statute of limitations. The resulting judgment was for defendant.

There is but one matter to be determined upon this appeal; was the action sued upon by the Federal Chemical Company barred by the statute of limitations?

If the Floyd Plant Food Company had such an interest in this note, the subject of the litigation, that entitled it to file and maintain a suit for the use and benefit of the Federal Chemical Company, then certainly the filing of its complaint would serve to toll the statute of limitations and any pleadings filed thereafter by way of amendment to the original complaint and which were not in effect a substitution of parties plaintiff would relate back to the date of the institution of the original action; but, on the other hand, if the Floyd Plant Food Company did not in fact have a cause of action at the time it instituted this suit, which it had the right to prosecute, then the Federal Chemical Company was possessed of this cause of action and it alone had the right to prosecute the same, then certainly the amendment filed to the pleadings amounted only to an effort to substitute the actual party in interest for one who had no cause of action, and such substitution cannot be permitted.

Upon the presentation of these numerous pleadings mentioned and the deposition taken on behalf of the appellant, counsel for appellant presented an array of requests for findings of fact and for declarations of law to be made thereon. The court declined to make these findings of fact or the declarations of law as requested, but held that plaintiff's cause of action was barred by the statute and "all of the facts and the law in favor of the defendant." The rule recognized so long as to be almost proverbial is that we shall consider whatever facts there are in this record in the light most favorable to sustain the judgment rendered. Proceeding upon this theory we take the pleadings first as evidencing the appellant's theory. A material part of such matters has already been stated. It remains to give effect to what the pleader himself has alleged.

The first allegation that we notice is to the effect that "the Federal Chemical Company came in possession of the note sued on from its co-plaintiff, the Floyd Plant Food Company, by outright purchase. Said Federal Chemical Company is now the owner and holder of said note." This was the first pleading filed by the Federal Chemical Company on August 17, 1936, more than five years after the maturity date of the notes sued on, which were barred at that time unless the statute had been tolled by the institution of the prior suit by the Floyd Plant Company. If we take this pleading for what it says, then there were two corporations, the Federal Chemical. Company and the Floyd Plant Food Company, and the Floyd Plant Food Company had disposed of all the interest it had in said note two years prior to that date by a sale or "outright purchase," by its co-plaintiff. By that purchase, Federal Chemical Company "came into possession of the notes two years before the Floyd Company sued on them." If that allegation is true then there are two corporations. They were not the same because they dealt with each other, one sold the notes and the other purchased them. When the Floyd Plant Food Company disposed of these notes it had no kind of interest remaining in them. The pleading could not have any other meaning.

Again this plaintiff pleads that "in 1934 Floyd Plant Food Company, which was a corporation owned by Federal Chemical Company, was dissolved and the Federal Chemical Co. took over all its assets, including cash, accounts and notes, of which these two notes were a part." Now certainly the Federal Chemical Company may not be heard to insist that the Floyd Plant Food Company and the Federal Chemical Company were identical when one...