Henry County v. Citizens Bank of Windsor
| Decision Date | 24 December 1907 |
| Citation | 106 S.W. 622,208 Mo. 209 |
| Parties | HENRY COUNTY, Appellant, v. CITIZENS BANK OF WINDSOR |
| Court | Missouri Supreme Court |
Appeal from Pettis Circuit Court. -- Hon. Louis Hoffman, Judge.
Affirmed.
J. D Lindsay, C. C. Dickinson & Son and Parks & Son for appellant.
(1) (a) It is a uniform, inflexible rule of law that all combinations, the effect of which is to stifle competition in bidding at public or private sales or in the letting of public works, and on principle, in the letting for hire of public moneys, are immoral, vicious and void. In re Salmon, 145 F. 652. (b) A combination of bidders to suppress competition at a public sale required by law is a fraudulent conspiracy in restraint of trade and contrary to public policy. It renders void any contract or transaction of the vendor and vests in him the legal right to recover of any of the conspirators the value of all the benefits he has received thereunder. In re Blake, 150 F. 282. (c) In re Blake, 150 F. 282. (d) A principal may be charged with liability on a contract made in his behalf, although his interest be not disclosed, or known at the time, to the other contracting party. Weber v. Collins, 139 Mo. 501; Nichols Shepard & Co. v. Kern, 32 Mo.App. 1; Higgins v Dellinger, 22 Mo. 397; Briggs v. Munchon, 56 Mo. 473; Bank v. Jennings, 18 Mo.App. 651; Story on Agency, sec. 270; Wharton on Agency, secs. 403, 404; In re Salmon, 145 F. 650; In re Blake, 150 F. 279. (e) A party who is compelled to pay a note, which he signed as security for another, who gave it for money borrowed by him as agent for a third party, may recover the amount directly from him for whom the money was borrowed; and it makes no difference that the agent did not disclose his agency, or that the money was loaned and the note signed by security upon his individual credit. Higgins v. Dellinger, 22 Mo. 397; Mantz v. Maguire, 52 Mo.App. 149. (2) (a) An actual transfer of the money in a sack from Salmon & Salmon to the Windsor banks is not necessary. The court will, as a matter of law from the transaction itself, conclusively presume such transfer. Henry County v. Salmon, 201 Mo. 136. (b) Where parties to a transaction themselves agree upon their own construction, the court, in construing the same, will generally adopt the construction given by the parties. St. Joe, etc., Co. v. Railroad, 131 Mo. 291; St. Louis v. Gas Light Co., 155 Mo. 1; Rose v. Eclipse, etc., Co., 60 Mo.App. 28; Williams v. Railroad, 85 Mo.App. 103. (3) (a) A bank receiving the benefit of a contract can not set up the plea of ultra vires. Morse on Banks and Banking (3 Ed.), sec. 750. (b) Where a bank receives the proceeds and profits of a transaction, accomplished by means of fraudulent or improper acts on part of its officers, it cannot escape liability upon the ground that the acts of the officers were individual acts and that the thing done was not within the scope of its power. Carr v. Nat'l Bank & Loan Co., 167 N.Y. 375; Aldrich v. Chemical Nat'l Bank, 176 U.S. 618; First National Bank v. Greenville Oil & Cotton Co., 66 S.W. 828; American Nat'l Bank v. Nat'l Wall Paper Co., 77 F. 85; German Nat'l Bank v. Louisville Butchers, etc., Co., 20 S.W. 882. (c) The doctrine of ultra vires applies to the other party who is in pari delicto, but does not apply to the party wronged who is guilty of no wrong, negligence or laches. Morse on Banks & Banking, sec. 733. (d) A corporation cannot avail itself of the defense of ultra vires when the contract has been executed by the other party and is not expressly prohibited by law. City of Goodland v. Bank, 74 Mo.App. 365; Croham v. Brown, 68 Mo.App. 636; Winscott v. Investment Co., 63 Mo.App. 367; St. Louis Drug Co. v. Robinson, 81 Mo. 18; Thornton v. Nat'l Exchange Bank, 71 Mo. 221; Roselle v. Buckmeir, 134 Mo. 380; Roselle v. Farmers Bank, 141 Mo. 36.
W. M. Williams for respondent.
(1) The defendants did not receive any of the county funds from the depositary of Henry county, and no part of the county money was on deposit in either of these banks at the time of the failure of Salmon & Salmon, or at the institution of this suit. (2) The agreement by Salmon & Salmon, after their selection as the county depositary, with the defendant banks, cannot be construed as an actual deposit of $ 10,000 with the Citizens Bank of Windsor and $ 5,000 with the Farmers Bank of Windsor, and a re-loan of these sums, respectively, by said banks to Salmon & Salmon. There was never any contract or understanding that Salmon & Salmon were to repay these amounts to the Windsor banks, and no intention that they should do so. "A loan of money is a contract by which one delivers a sum of money to another and the latter agrees to return, at a future time, a sum equivalent to that which he borrowed." Allibone v. Ames, 33 L. R. A. 587. (3) Salmon & Salmon promised to keep on time deposit, during the period for which they should be county depositary, the sum of $ 10,000 with one of the defendants and $ 5,000 with the other defendant; and the defendants were to pay interest on the daily balances at the same rate as Salmon & Salmon should pay to the county. Subsequently this agreement was rescinded and "instead of paying the money over to them," Salmon & Salmon "retained the money and paid a bonus." There was no money in the possession of the defendants belonging to the county at the time these suits were brought. The plaintiff has failed to bring itself within the rule laid down in In re Salmon, 145 F. 649, and In re Blake, 150 F. 275. (4) The suits are to recover money of the county, alleged to have come into the hands of the defendants, through a wrongful and unlawful combination to depress bidding at the time of the selection of the county depositary. The plaintiff must stand or fall on the case made in its pleadings. It cannot sue upon one cause of action and recover upon another. The petitions do not seek to charge the defendants as undisclosed principals in a contract with the county, and no recovery can be had upon that ground. Sumner v. Rogers, 90 Mo. 324; Traber v. Hicks, 131 Mo. 180; Carson v. Cummings, 69 Mo. 325; Ross v. Mather, 51 N.Y. 108. (5) Defendants cannot be held liable in this action on the ground that they authorized Salmon & Salmon to bid for them for a part of the county funds. (a) Henry county could not have received or accepted a bid from the Farmers Bank for $ 5,000 or from the Citizens Bank for $ 10,000 of said funds. The depositary law does not authorize any such division. Separate bids cannot be accepted for portions of the county money. The county court is only authorized to select one depositary, and all the money of the county must be kept with such depositary. R. S. 1899, secs. 6817-6821. (b) Again, no such case is presented by the pleadings. The suit is for the recovery of specific money charged to have been obtained from the county through an alleged fraud and wrongful combination. A recovery cannot be had upon a contract. Sumner v. Rogers, 90 Mo. 324; Carson v. Cummings, 69 Mo. 325. (6) The Citizens Bank of Clinton, the Citizens Bank of Windsor and the Farmers Bank of Windsor are banking corporations, created under the statutes of this State. It is settled law that these corporations could not become partners with each other or with an individual in any enterprise. Defendants cannot be charged upon the ground that they bid for the money as partners; and the petition does not count upon any such contractual relation. Aurora State Bank v. Oliver, 62 Mo.App. 390; Whittenton Mills v. Upton, 76 Mass. 582; 1 Morawetz on Corporations (2 Ed.), p. 800. (7) The officers of the banks at Windsor had no authority to bind these banks by any such arrangement as that set up in the petition. There is no evidence to show that the directors empowered them to make such agreement. The cashier of a bank has no authority to bind the bank except in the performance of those things that are in the general scope and line of his duty as such officer. Daviess County Savings Association v. Saylor, 63 Mo. 27; Hume v. Eagan, 83 Mo.App. 576; Vansant v. Hobbs, 64 Mo.App. 628; People's Saving Bank v. Hughes, 62 Mo.App. 576; Windsor v. Bank, 18 Mo.App. 665; Lane on Banking, 131; Jones v. Williams, 139 Mo. 1; Calumet Paper Co. v. Haskell, 144 Mo. 331. (8) There can be no ratification of the acts of the executive officers without knowledge on the part of the directors of all the facts. Windsor v. Lafayette County Bank, 18 Mo.App. 665; Newland Hotel Co. v. Lowe Furniture Co., 73 Mo.App. 135; 1 Am. and Eng. Ency. Law (2 Ed.), 965.
OPINION
In Banc.
-- This cause is now pending in this court upon appeal by plaintiff the county of Henry, from a judgment of the Pettis County Circuit Court in favor of the defendant.
We know of no better way of indicating the nature and character of this controversy than by the reproduction of the petition and answer which present the issues that were determined by the trial court. Omitting formal parts, the petition thus states the cause of action by the plaintiff:
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