Hackett v. Van Frank

• Decision Date: 22 May 1906
• Citation: 96 S.W. 247,119 Mo. App. 648
• Parties: HACKETT et al. v. VAN FRANK.
• Court: Missouri Court of Appeals

96 S.W. 247

119 Mo. App. 648

HACKETT et al. v. VAN FRANK.

St. Louis Court of Appeals. Missouri.

May 22, 1906.

Rehearing Denied June 5, 1906.

1. PARTIES—PLEADING—AMENDMENT.

Where suit on a cause of action in favor of a corporation was commenced in the names of the owners of all the corporate stock, an amendment substituting the corporation as party plaintiff should have been allowed, and was not objectionable as changing the cause of action, within Rev. St. 1899, § 657.

2. APPEAL—DISCRETION OF TRIAL COURT— AMENDMENTS.

By mistake of the attorneys for the plaintiff, suit on a cause of action in favor of a corporation was commenced in the names of the holders of all the corporate stock, and immediately after plaintiff's attorneys discovered the mistake, a motion to amend by substituting the corporation as party plaintiff was made after due notice. If the action had been abated and a new action commenced, the cause of action would have been barred by limitation. Held that, while the trial court generally has discretion as to the allowance of amendments, nevertheless under the circumstances it was proper for the appellate court to reverse a judgment refusing to permit the amendment and remand the case, with directions to allow it.

Appeal from Circuit Court, Ste. Genevieve County; Chas. A. Killian, Judge.

Action by James L. Hackett and others against Philip R. Van Frank. From a judgment for defendant, plaintiffs appeal. Reversed and remanded, with directions to allow amendment of the petition.

R. H. Whitelaw, for appellants.

GOODE, J.

This suit was brought in the Cape Girardeau court of common pleas to the May term, 1900. On application of defendant, the venue was changed to the circuit court of Madison county, and from that court the cause was transferred by agreement of the parties to the circuit court of Ste. Genevieve county, whence this appeal comes. The action is to recover for liquors alleged to have been sold and delivered to defendant at different dates between June 23, 1899, and November 18th of that year. The case has been tried three times, and was once before appealed to this court, which reversed the judgment then in contest. Hackett v. Van Frank, 105 Mo. App. 384, 79 S. W. 1013. By reading the opinion given on the appeal it will be seen that the defense was that the liquors were not purchased by defendant, but by his son-in-law without authority from him. The petition is in the ordinary form for merchandise sold and delivered, and originally ran in the name of Wm. M. Collins, Jas. L. Hackett, and Graeme McGowan, who are alleged to have been partners under the style of Wm. M. Collins & Co. and doing business in Louisville, Ky. This allegation never was put in issue by a verified answer. The firm originally was composed of Collins & Hackett, McGowan never having had any interest in it. He was its bookkeeper. Collins died in 1895, five years before this action was begun, but his death was not suggested until two years after the institution of the action, which, from the date of the suggestion, proceeded in the name of Hackett & McGowan. The firm of Wm. M. Collins & Co. was engaged in the liquor business prior to September, 1891, and for several years thereafter. In September of said year Collins, Hackett, McGowan and two men named Brown, incorporated the Greenbrier Distillery Company for the purpose of manufacturing liquors, and both the firm and the distillery company conducted business until November, 1894. By that time all the stock in the company had been acquired by Collins, Hackett, and McGowan, and it was determined to merge the business of the partnership with that of the Greenbrier Distillery Company. In pursuance of this purpose the parties interested entered into a written agreement and filed amended articles of incorporation. The distillery company's business had been chiefly the manufacture of liquors; whereas, the firm's business had been the sale of liquors at wholesale. Hence, the firm of Wm. M. Collins & Co. was well known to the trade, and it was deemed wise to retain the firm name in selling to retail dealers. For this reason, in the articles consolidating the business of the partnership and that of the corporation, the following clauses were inserted: "It is hereby agreed that the Greenbrier Distillery Company may continue to sell goods in the name of Wm. M. Collins & Co. and use that firm name as it deems best, and that the parties to this agreement shall be responsible for any and all obligations so incurred in the name of Wm. M. Collins & Co. as partners, in the proportions, as between themselves, of their respective interests in the corporation as amended. It is further agreed that said Greenbrier Distillery Company shall collect and receive all the assets and complete and carry out all of the contracts and perform all of the obligations and satisfy all the liabilities of the existing firm of Wm. M. Collins & Co."

Pursuant to those clauses the Greenbrier Distillery Company, after the merger and even after the death of Collins, continued to take out a wholesale liquor dealer's license and sell liquors in the name of Wm. M. Collins & Co., and when the goods in controversy in this suit were sold, the sale and billing were in the name of Wm. M. Collins & Co., and under that name they were shipped to Van Frank at Cape Girardeau. When this sale occurred nobody owned any stock in the distillery company except the plaintiffs Hackett and McGowan, who, in May, 1898, had acquired the stock previously held by Collins, and remained the sole owners of all the stock in that corporation until August 27, 1900; that is, during the period of the sales of the liquors in controversy. After the case was returned by this court for another trial, the deposition of McGowan was taken, and therein the facts we have related were developed. They had been unknown previously to the attorneys for plaintiffs, who inadvertently instituted the action in the names, as the attorneys supposed, of the members of the old firm. When the business of the firm and that of the corporation were merged, it was provided in the articles of consolidation, as will be seen in the quoted clauses, that the Greenbrier Distillery Company should receive all the assets, assume all the obligations, and carry out all the contracts of the firm of Wm. M. Collins & Co. The facts having been ascertained, plaintiffs' attorneys gave notice that they would ask leave to amend their petition so as to make the suit stand in the name of the Greenbrier Distillery Company instead of the names of James M. Hackett and Graeme McGowan. Previous to the presentation of this motion, but after service of notice that it would be presented, defendant filed an amended answer, in which, among other things, it was averred that the merchandise mentioned in the petition was the property of and in the possession of the Greenbrier Distillery Company when sold; was sold by said company; that plaintiffs had no right to or interest in the merchandise, and no right or claim to the cause of action stated in the petition, the Greenbrier Distillery Company being the real party in interest. At the hearing of the motion plaintiffs introduced the original petition, defendant's amended answer, and the deposition of McGowan, thus showing the facts we have recited. The court overruled the motion to amend and plaintiffs excepted. The case was then called for trial and both parties announcing ready, a jury was impaneled. After the jury was sworn, but before any evidence was heard, the court, at defendant's request, instructed that under the pleadings plaintiffs were not the real parties in interest, were not suing in a representative capacity, or as trustees of an express trust, and a verdict should be returned for defendant. An exception was saved to this instruction, and a verdict having been returned by the jury in accordance with it, followed by final judgment, the present appeal was taken after appropriate preliminary motions.

The firm of Wm. M. Collins & Co. had no existence when the merchandise in controversy was sold, as the death of Collins in 1895, had dissolved it, even if it continued to be a legal entity subsequent to the absorption of its obligations and assets by the distillery company. There is no proof of the organization of a new firm, after Collins' death, by Hackett and McGowan. But the old name was still used by the corporation as a trade designation or style, in order to retain, unimpaired, the good will enjoyed by the firm. After the death of Collins was suggested, the present action stood in the names of Hackett & McGowan. The indebtedness owing for the merchandise was an asset of the Greenbrier Distillery Company,...