Missouri Savings & Loan Co. v. Rice, 907.

• Decision Date: 13 December 1897
• Docket Number: 907.
• Citation: 84 F. 131
• Parties: MISSOURI SAVINGS & LOAN CO. v. RICE et al.
• Court: U.S. Court of Appeals — Eighth Circuit

84 F. 131

MISSOURI SAVINGS & LOAN CO. v. RICE et al.

No. 907.

United States Court of Appeals, Eighth Circuit.

December 13, 1897

W. C Perry and John H. Crain, for plaintiff in error.

J. D McCleverty, for defendants in error.

Before BREWER, Circuit Justice, SANBORN, Circuit Judge, and RINER District Judge.

SANBORN Circuit Judge.

On June 13, 1895, the Missouri Savings & Loan Company, the plaintiff in error, commenced an action in the court below against Oscar Rice, B. Hudson, A. Graff, and A. M. Keene, the defendants in error. The case was heard, and decided upon a demurrer to an amended petition or declaration, which states as its only ground that the petition does not state facts sufficient to constitute a cause of action. The circuit court sustained the demurrer, and dismissed the action. This writ of error challenges that decision.

There is nothing in the record to inform us upon what ground the court below based its action, but counsel for the defendants in error cites paragraph 4095, Gen. St. Kan. 1889, which provides that actions for 'relief on the ground of fraud' can only be brought within two years after the cause of action accrued; and while he admits that, if this is an action on contract, it was brought in time, he argues that the petition shows that this action was for relief on the ground of fraud, and that the causes of action which it pleads accrued more than two years before the action was commenced. The question presented, then, is whether this is an action ex contractu or ex delicto, and that question must be answered by the amended petition.

This petition pleads two similar causes of action, which differ merely in the amounts in question, the names of the mortgagors, and the description of the mortgaged property. The material facts stated as the basis of the first cause of action are these: The plaintiff is a corporation of the state of Missouri, engaged in loaning money on real estate security to its stockholders, to be repaid in monthly installments. Its principal place of business is St. Louis. Whenever it loans money in any other city, it requires its stockholders in that city to elect a local board of directors, and requires that board to recommend each applicant for a loan as worthy of credit, and to appraise the real estate which he offers as security. The rules of the plaintiff provided that loans upon real estate security should not exceed 50 per cent. of the cash value of the real estate, and the plaintiff loaned an amount equal to only 50 per cent. of the appraised value of the security, and loaned that only upon a recommendation and appraisement made by its local board. The defendant knew these facts. The plaintiff had several stockholders in the city of Ft. Scott, in the state of Kansas, and, among them, these defendants. On November 21, 1892, the defendants and two other stockholders applied to the plaintiff for a charter for a local board. In this application they requested that the right and authority should be conferred upon them to act as a local board of directors for plaintiff at Ft. Scott to receive applications from stockholders who desired to borrow of plaintiff, and to appraise the value of real estate which these applicants offered as security. On November 26, 1892, the plaintiffs granted such a charter to them, which provided that the defendants and one Ury, who was associated with them as a member of the board of directors, should pass upon all applications for loans before they should be forwarded to the plaintiff, and that they should in all practical ways protect the interests of the plaintiff in the locality of Ft. Scott. The defendants accepted this charter, and thereby agreed to comply with its terms. On December 2, 1892, they, being a majority of the local board, prepared an application to the plaintiff for a loan of $450 to one William G. Player, upon the security of certain real estate in the city of Ft. Scott. The defendant Rice administered the oath to Player, to the effect that the statement in his application was true, and the other defendants appraised the value of the property offered as security at the sum of $900. Rice then forwarded the application and appraisement to the plaintiff, whereby each of the defendants represented to the plaintiff that they had performed their agreement, and intended that the plaintiff should accept and act upon the...