Fricke v. Belz

• Decision Date: 08 February 1944
• Docket Number: No. 26445.,26445.
• Citation: 177 S.W.2d 702
• Parties: ELIZABETH FRICKE, RESPONDENT, v. HENRY BELZ, APPELLANT.
• Court: Missouri Court of Appeals

177 S.W.2d 702

ELIZABETH FRICKE, RESPONDENT, v. HENRY BELZ, APPELLANT.

No. 26445.

St. Louis Court of Appeals, Missouri.

Opinion filed February 8, 1944.

Appeal from the Circuit Court of St. Louis County. — Hon. Julius R. Nolte, Judge.

REVERSED AND REMANDED (with directions).

Edward W. Tobin, George F. Heege and Edward A. Haid for appellant.

(1) The name "J.H. Belz Provision Company," typewritten on a note in the place provided for the signature of the maker, raises the inference that the transaction is a corporate one. Mechanics Bank v. Bank of Columbia, 5 Wheat. 327; Sparks v. Dispatch Transfer Co., 104 Mo. 531, 544, 15 S.W. 417, 420. (2) The corporate name typewritten above the written signature "Henry Belz" raises an implication of corporate liability. Reeve v. First Natl. Bk., 54 N.J. Eq. 203, 23 Atl. 853, 854. (3) Whether appellant is liable as maker of the note is to be determined by the intent of the parties thereto. Klostermann, Adm'r, v. Loos, 58 Mo. 290, 294. (4) Courts of equity will reform an instrument which, because of an omission of the scrivener, does not express the intention of the parties. Sicher v. Rambousek, 193 Mo. 113, 91 S.W. 68; Net Realty Co. v. Dubinsky, 93 S.W. (2d) 1108, 1117. (5) Where mistake or omission clearly appears, reformation will be decreed. Net Realty Co. v. Dubinsky, supra; Fisher v. Barnett, 56 Ill. App. 649; Lee v. Percivall, 85 Iowa, 639, 52 N.W. 543; Denver Brick & Mfg. Co. v. McAllister, 6 Colo. 231; Dunbar Box & Lbr. Co. v. Martin, 103 N.Y.S. 91; Myers v. Chesley, 190 Mo. App. 371, 177 S.W. 371. (6) Transactions between husband and wife will be closely scrutinized where rights of others may be affected. Zehnder v. Stark, 248 Mo. 39, 154 S.W. 92, 94; East St. Louis I. & C.S. Co. v. Kuhlman, 238 Mo. 697, 142 S.W. 253, 256. (7) Where the instrument contains words indicating signer of note signed as agent for principal, agent is not personally liable. R.S. Mo. 1939, sec. 3036. (8) This statute abrogates common law. 10 C.J.S., sec. 32, p. 445. (9) Respondent is bound by any knowledge she would have gained by inquiry which the facts in her possession made it her duty to pursue. Kidd v. Brewer, 317 Mo. 1047, 297 S.W. 960; Luker v. Moffett, 327 Mo. 929, 38 S.W. (2d) 1037; Mechanic's Am. Nat'l Bank v. Helmbacher, 199 Mo. App. 173, 201 S.W. 383; 10 C.J.S., sec. 324, p. 820; 10 C.J.S., sec. 334, p. 835. (10) The note being irregular on its face, respondent is not a holder in due course. Sec. 3067, R.S. Mo. 1939; 10 C.J.S., sec. 301, p. 784; 10 C.J.S., sec. 324, p. 820. (11) The note with the name "J.H. Belz Provision Company" typed in the space provided for the maker's signature, followed by the written signature of the president of the company not preceded by the word "by" or followed by the word "President," is ambiguous on its face and does not appear to be the note of Henry Belz. Dunbar Box & Lbr. Co. v. Martin, 103 N.Y.S. 91, 53 Misc. 312. (12) Courts of equity will reform an instrument not only between the original parties thereto, but also as to those claiming under them and in privity. Sicher v. Rambousek, supra; Kidd v. Brewer, supra. Reformation may be had against subsequent purchasers charged with notice. Hoxey Hotel Co. v. Farm & Home Savings Loan Assn., 163 S.W. (2d) 766. (13) It is not necessary for appellant to prove by direct and positive evidence that respondent had knowledge of the infirmity in said note or the circumstances under which it was executed. Citizens Bank v. Kriegeshauser, 211 Mo. App. 33, 244 S.W. 107, 111. Suspicious circumstances may be considered in determining whether a purchaser acquired a note in good faith. Kelly v. Industrial Operative Co., 329 Mo. 629, 46 S.W. (2d) 181; Bank of Polk v. Wood (Mo. App.), 186 S.W. 1186. (14) It was necessary that respondent prove the fact of endorsement of the payee before delivery, by evidence aliunde the endorsement. Credit Alliance Corp. v. Bryan, 27 S.W. (2d) 441, 444; Manheimer v. LeRoy, 28 S.W. (2d) 380, 382.

A.G. Jannopoulo for respondent.

(1) Negotiable promissory note signed by the name of a corporation with the name of appellant below that of the corporation, but without any additional showing his office, appellant is personally liable. Rudolph Wurlitzer Co. v. Rossmann, 196 Mo. App. 78, 190 S.W. 636, 639; Sec. 3040, R.S. Mo. 1939; Herman v. Metropolitan Petroleum Co., 253 Ill. (A) 536; 10 C.J.S., sec. 508, pp. 1118, 1119. (2) This note is regular on its face and not ambiguous. Rudolph Wurlitzer Co. v. Rossmann, supra; Meyers v. Chesley, 190 Mo. App. 371, 177 S.W. 326. (3) After respondent proved she was holder in due course, the burden to disprove this rested on appellant. Downs v. Horton, 287 Mo. 414, 230 S.W. 103, 105 to 110; C.I.T. Corporation v. Byrnes (Mo. App.), 38 S.W. (2d) 750; Sec. 3067, R.S. Mo. 1939; Wilson v. Riddler, 92 Mo. App. 335, 339; State ex rel. v. Cox et al., 325 Mo. 901, 30 S.W. (2d) 462, 464; Farmers Bank of Trenton v. Ray & Son, 148 S.W. (2d) 120, 124. (4) Respondent, being a holder in due course, does not have burden of proving that she had no knowledge of any infirmity in negotiable note. Tower Grove Bank & Trust Co. v. Duing et al., 346 Mo. 896, 144 S.W. (2d) 69, 72; Stevens v. Arnold, 326 Mo. 32, 30 S.W. (2d) 1015, 1018; Strohfeld v. Cox, 325 Mo. 901, 30 S.W. (2d) 462; Downs v. Horton, 287 Mo. 414, 230 S.W. 103, 105, 106, 107, 109 and 110. (5) There was no "mutual mistake" between appellant and original payee, appellant having executed several other notes at the same time in like manner. Hood v. Owens et al., 293 S.W. 774, 778; Peters et al. v. Schachner et al., 312 Mo. 609, 280 S.W. 424, 429; Berger Mfg. Co. v. Phillips Hotel Operating Co., 228 Mo. App. 341, 67 S.W. (2d) 997, 999; Sweet v. Owens, 109 Mo. 1, 18 S.W. 928. (6) Original payee not being a party to this action, court of equity will not reform the promissory note. 21 C.J., sec. 253, pp. 258, 259 and 260; 53 C.J., sec. 156, p. 1003; Scott v. Gordon, 109 Mo. App. 695, 83 S.W. 550; Haley v. Bagley, 37 Mo. 363. (7) Courts of equity will not set aside negotiable promissory notes by reformation, in hands of holder in due course. General Refractories Co. v. Sebek, 328 Mo. 1143, 44 S.W. (2d) 60, 64; Cities Service Oil Co. v. Berenice Holding Co., 90 S.W. (2d) 131, 137. (8) Respondent proved endorsement of original payee, even though appellant could not question such endorsement. Martin v. Martin et al., 219 Mo. App. 51, 266 S.W. 750, 753; Hamlin v. Hawkins, 61 S.W. (2d) 348, 351. (9) Appellant failed to show authority of corporation to borrow money from or execute note to original payee, Fred Fricke. Integrity Mining & Milling Co. v. Moore, 130 Mo. App. 627, 633, 634, 109 S.W. 1057; 19 C.J.S., sec. 1059, p. 581. (10) Appellant is barred from relief by way of reformation in that he is guilty of laches. Hudler v. Guerdan et al. (Mo. App.), 113 S.W. (2d) 1039, 1041; Lustenberger et al. v. Hutchinson et al., 119 S.W. (2d) 921, 926. (11) Appellate courts, in equity cases, will accord due deference to chancellor's findings and will not disturb the same where there was substantial evidence to support the decree. Owens v. Owens, 146 S.W. (2d) 569, 575; Galloway et al. v. Galloway, 169 S.W. (2d) 883, 889; Coleman v. Crescent Insulated Wire & Cable Co., 168 S.W. (2d) 1060, 1067; Manahan et al. v. Manahan et al., 52 S.W. (2d) 825.

HUGHES, P.J.

The suit was prosecuted by respondent-plaintiff seeking to recover from appellant-defendant the principal and interest on a promissory note in words and figures as follows:

                "$1000.00                 June 24th 1939
                

Eighteen months after date we promise to pay to the order of Fred H. Fricke

BELZ $1000 and 00 cts Dollars

Payable at St. Louis, Missouri

For value received negotiable and payable without defalcation or discount and with interest from 6/24/39 at the rate of 6 per cent per annum.

                No 1 Due 12/24/40
                            J.H. BELZ PROVISION COMPANY
                                           HENRY BELZ."
                

The words "BELZ $1000 and 00 cts Dollars" are impressed on the note by means of a protectograph machine used in the office of J.H. Belz Provision Company. The words or signature "J.H. BELZ PROVISION COMPANY", at the bottom of the note is typewritten in capital letters. The inscription or signature "HENRY BELZ" is in the hand writing of Henry Belz, who was President of the J.H. Belz Provision Company.

The petition is in conventional form. The answer is in substance that the note was intended to be and was in fact the obligation of J.H. Belz Provision Company; that the defendant intended to sign the same as President of the J.H. Belz Provision Company and not as a co-maker; that the payee of said note so understood; that plaintiff is not a holder in due course of said note, but acquired the same with full knowledge of the facts and circumstances surrounding the execution thereof and therefore prayed that said note be reformed so as to comport with the real intention of the parties, and for other proper relief. The reply is a general denial, followed by a statement that plaintiff is a bona-fide holder in due course of the note, and a plea of laches and estoppel is invoked. It will thus be seen that the answer prays for equitable relief; this appears to us to have been unnecessary. Where a mistake in the written instrument sued on is set up as a defense and the reformation of the instrument is not necessary in order to place the defendant in statut quo or to give back some title or position surrendered by him, full relief may be had without resorting to equity. [Short v. Thomas, 178 Mo. App. 400, l.c. 417, 163 S.W. 252; McNeill v. Wabash R. Co., 207 Mo. App. 161, l.c. 172, 231 S.W. 649; Buhler Mill & Elevator Co. v. Jolly, 217 Mo. App. 240, l.c. 245, 261 S.W. 353.] Nevertheless the answer did ask for affirmative relief in equity, and both sides tried the case as one in equity, and we are therefore authorized in so treating it, and disposing of the case on appeal on the same theory on...