Ireland v. Shukert

• Decision Date: 01 March 1943
• Docket Number: No. 20221.,20221.
• Parties: G.H. IRELAND, RESPONDENT, v. E. SHUKERT, APPELLANT.
• Court: Missouri Court of Appeals

177 S.W.2d 10

G.H. IRELAND, RESPONDENT, v. E. SHUKERT, APPELLANT.

No. 20221.

Kansas City Court of Appeals, Missouri.

March 1, 1943.

Hearing denied January 10, 1944.

Appeal from Jackson County Circuit Court. — Hon. Paul A. Buzard, Judge.

REVERSED.

Thurber Kelley, Lawrence R. Brown and Ryland, Stinson, Mag & Thomson for appellant.

(1) The alleged letter of guaranty was not binding upon the defendant because Van Evera had no authority to bind the noteholders. 2 C.J. 556; Mechanics Bank v. Schaumburg, 38 Mo. 228; Springfield Gas & Elec. Co. v. Southern Surety Co. (Mo. App.), 250 S.W. 78; Austin Western Road Machinery Co. v. Bank (Mo. App.), 255 S.W. 585; Baldridge v. Walton, 1 Mo. 369. (2) There was no consideration for defendant's so-called letter of guaranty either in the form of a detriment to the noteholders or in the form of a benefit to anyone else. Watkins Co. v. Smith (Mo. App.), 31 S.W. (2d) 554; Kelly-Springfield Tire Co. v. Hamilton, 230 Mo. App. 430, 91 S.W. (2d) 193; Restatement of Contracts, sec. 55; Smith v. Vernon County, 188 Mo. 501, 87 S.W. 949; Restatement of Contract, sec. 53; DeLassus v. Russell (Mo. App.), 296 S.W. 225; Allen West Commission Co. v. Richter (Mo.), 228 S.W. 827. (3) There was no ratification of Van Evera's unauthorized act. 2 C.J.S., sec. 63, p. 1136; Hannah v. Butts, 222 Mo. App. 1098, 14 S.W. (2d) 31; Cowan v. Curran, 216 Ill. 598, 75 N.E. 322; Atlee v. Bartholomew, 69 Wis. 43; 1 Am. & Eng. Ency. of Law (2 Ed.), p. 1194; Dodge v. Hopkins, 14 Wis. 630; Hudson v. Browning, 264 Mo. 58, 174 S.W. 393; LaClede v. Tudor Iron Works, 169 Mo. 137, 69 S.W. 384; Fullington v. Ozark Poultry Supply Co., 327 Mo. 1167, 39 S.W. (2d) 780; Aden v. Dalton, 341 Mo. 454, 107 S.W. (2d) 1070.

Nelson E. Johnson for respondent.

(a) E. Shukert, having received the benefits of the contract of guaranty, is estopped to attack its validity. Motor Freight Terminal Corp. v. Brooks, 132 S.W. (2d) 1064, 1065; Kusnetzky v. Security Ins. Co., 313 Mo. 143, 152, 281 S.W. 47, 49; Runnels v. Lasswell, 219 S.W. 980, 981; Hartman v. Chicago B. & Q.R. Co., 192 Mo. App. 271, 277, 182 S.W. 148, 151; Rhodus v. Geatley, 347 Mo. 397, 406, 147 S.W. (2d) 631, 637; Clauson v. Larman, 211 S.W. 912, 913; McQuitty v. McQuitty, 332 Mo. 1057, 1060, 61 S.W. (2d) 342, 343. (b) Although Van Evera may have acted without the scope of his authority, ratification by the plaintiff gave his act validity. Griswold v. Hass, 277 Mo. 255, 263, 210 S.W. 356, 358; Fritsch v. Natl. City Bank, 24 S.W. (2d) 1066, 1067, 1068; Alexander v. Wade, 106 Mo. App. 141, 152, 80 S.W. 19, 22; Young v. Emmke, 210 Mo. App. 56, 242 S.W. 161; Minter v. Cupp, 98 Mo. 26, 34, 10 S.W. 862, 865; Strass v. Zollman, 348 Mo. 337, 341, 153 S.W. (2d) 65, 67. (c) The contract of guaranty is supported by a valuable consideration. Duvall v. Duncan, 341 Mo. 1129, 1135, 111 S.W. (2d) 89, 92; Nelson v. Diffenderffer, 178 Mo. App. 48, 55, 163 S.W. 217, 273; Cox v. Fire Brick Co., 230 Mo. App. 774, 783, 75 S.W. (2d) 621, 625; 28 C.J. Guaranty, sec. (51) (2), p. 919; Fuller v. Toole Dry Goods Co., 189 Mo. App. 514, 176 S.W. 1091; 28 C.J., p. 921; Thompson v. McCune, 333 Mo. 758, 765, 63 S.W. (2d) 41, 63; Hackett v. Dennison, 223 Mo. App. 1213, 19 S.W. (2d) 541; Sec. 3345, R.S. Mo. 1939; Scottish Rite Temple Association v. Lucksinger, 231 Mo. App. 486, 488, 101 S.W. (2d) 511, 512. (d) Acceptance of the letter of guaranty unnecessary. Linro Medicine Co. v. Moon, 190 Mo. App. 366, 369, 177 S.W. 322, 323; Peoples Bank v. Stewart, 152 Mo. App. 314, 133 S.W. 70; Sewing Machine Co. v. Richards, 115 U.S. 524. (e) The contract of guaranty is not void for want of mutuality. 2 C.J.S. Agency, sec. 64d (1), p. 1142; Underwood Typewriter Co. v. Century Realty Co., 220 Mo. 522, 524, 119 S.W. 400, 403; Beebe v. Columbia Axle Co., 233 Mo. App. 212, 221, 117 S.W. (2d) 624, 631; Pulitzer Pub. Co. v. Chitwood, 9 S.W. (2d) 251, 252; Martin v. Ray County Coal Co., 288 Mo. 241, 255, 232 S.W. 149, 152. (f) Shukert's letter of June 19, 1931, was an absolute and definite obligation of guaranty and is binding upon him. Great Western Printing Co. v. Belcher, 127 Mo. App. 133, 139, 104 S.W. 894, 896; Warder Bushnell & Glessner Co. v. Johnson, 114 Mo. App. 571, 90 S.W. 393; Binz v. Hyatt, 200 Mo. 299, 308, 98 S.W. 637, 639; Lowery v. Fuller, 221 Mo. App. 495, 281 S.W. 968; Mercantile Trust Co. v. Dulle et al., 282 S.W. 414, 415; Dunham v. Hinton, 332 Mo. 517, 58 S.W. (2d) 439; Sec. 850, R.S. Mo. 1939; Strauss et al. v. Zollman, 348 Mo. 337, 153 S.W. (2d) 65; Wilson & Co. v. Ins. Co., 300 Mo. 1, 254 S.W. 266, 277-278; McKenzie v. Missouri Stables, 225 Mo. App. 64, 34 S.W. (2d) 136, 139.

CAVE, J.

This is an appeal by the defendant from a judgment of the Circuit Court of Jackson County, in favor of the plaintiff on a letter of guaranty signed by defendant. The cause was tried by the court without the aid of a jury and at the conclusion of plaintiff's evidence, the defendant offered an instruction in the nature of a demurrer, which was overruled. Defendant stood on the demurrer and offered no evidence. There were no other declarations of law asked and no finding of facts requested or made.

The petition declared on a written guaranty signed by the defendant and was in usual form. The answer consisted of a general denial, together with a denial of liability on the following grounds: (a) That the alleged guaranty of the defendant is wholly without consideration and void; (b) that the said John J. Van Evera mentioned in the petition was without capacity or authority to enter into any agreement with the defendant; (c) that the said guaranty alleged in plaintiff's petition does not constitute a valid and binding contract, guaranty or obligation on behalf of the defendant; (d) that the alleged guaranty agreement is void and of no force or effect for lack of mutuality. The reply was a denial of all new matter contained in the answer, together with an allegation that the defendant was estopped to deny the validity of said guaranty contract because he had received the benefits of the contract.

In general the evidence developed the following facts: On June 11, 1929, the Jewell Development Company, a corporation, acquired a ninety-nine year lease on certain real estate located at 47th Street and Troost Avenue in Kansas City, and built a two-story brick building thereon. On November 1, 1929, the Jewell Development Company executed a deed of trust on this leasehold, wherein the Kansas City Title & Trust Company was named as party of the second part, trustee, the owners and holders of notes described in said deed of trust, payable to bearer, were named as parties of the third part, and one John J. Van Evera was named as party of the fourth part. The deed of trust was duly recorded and was given to secure the payment of various promissory notes or bonds aggregating the sum of $40,000, all bearing interest at seven per cent per annum from date until paid, and having attached interest coupons, all of said notes and coupons being payable to bearer at the office of said Van Evera in Kansas City. The notes further provided that they should bear interest at eight per cent after maturity. Shortly after the execution of the deed of trust and notes, the plaintiff became the owner of Notes Nos. 19 and 22. Note 19 became due November 1, 1937, and note No. 22 became due on the first day of November, 1938. All interest coupons were payable on the first day of May and November of each year, and all were paid up to and including the first day of May, 1934. One note in the principal sum of $1000 matured on November 1, 1930, and thereafter certain designated notes matured on the first day of November of each year until November 1, 1939, when the balance of the notes matured.

It was further provided that if default be made in the payment of any of said notes or any part thereof, or any of the interest when due, etc., then at the option of the holders of not less than twenty-five percent in amount of the notes secured and outstanding at the time of such default, the whole of said notes shall become due and foreclosure may be had. The deed of trust further provided that the Jewell Development Company should deposit with Van Evera on the first of each month during the term of the loan a sum equal to 1/12th of each annual payment upon the principal, together with 1/12th of the annual interest charges, taxes and insurance premiums accruing during each fiscal year. These deposits were to be additional security under the trust instrument. Out of the sums so deposited, payments were to be made by Van Evera on the taxes, insurance premiums and interest coupons maturing, and matured principal notes. This was the extent of the duty and authority given by the deed of trust to the fourth party, Van Evera. However, after the issuance of the notes he acted as agent of the Jewell Development Company in the negotiation of the notes and sold them to twelve or fifteen different purchasers who will hereinafter be referred to as the "noteholders".

The Jewell Development Company never made any of the monthly payments to Van Evera as required by the deed of trust and for that reason it was in default beginning six months after its execution, but, so far as the record discloses, the noteholders took no action to foreclose.

Early in the year 1931, Van Evera interested defendant and one Frederick H. MacDonald, who was the husband of defendant's granddaughter, in exchanging certain property for the above leasehold, and as a result of such negotiations, the defendant, about April 15, 1931, signed a written contract agreeing to pay $4000 in cash and to exchange certain real estate for the above leasehold. Such leasehold was to be assigned and delivered to the defendant "or his order". As a result of such contract of exchange, the Jewell Development Company conveyed the ninety-nine year leasehold to Frederick H. MacDonald and wife and received a deed to the...