Moberly v. Leonard

• Decision Date: 12 November 1936
• Citation: 99 S.W.2d 58,339 Mo. 791
• Parties: O. H. Moberly, as Commissioner of Finance in Charge of the Assets and Affairs of the Cooper County State Bank of Bunceton, a Corporation, Appellants, v. N. Nelson Leonard, Arthur Blomquist, Snode Morris, H. L. Twillman, George K. Crawford, George A. Carpenter and Arthur W. Nelson, Jr., as Administrator of the Estate of Arthur W. Nelson, Defendants
• Court: Missouri Supreme Court

99 S.W.2d 58

339 Mo. 791

O. H. Moberly, as Commissioner of Finance in Charge of the Assets and Affairs of the Cooper County State Bank of Bunceton, a Corporation, Appellants, v. N. Nelson Leonard, Arthur Blomquist, Snode Morris, H. L. Twillman, George K. Crawford, George A. Carpenter and Arthur W. Nelson, Jr., as Administrator of the Estate of Arthur W. Nelson, Defendants

Supreme Court of Missouri

November 12, 1936

Appeal from Howard Circuit Court; Hon. A. W. Walker, Judge.

Affirmed.

Roy D. Williams, W. W. Carpenter, Jr., and L. O Schaumburg for appellants.

(1) All facts properly pleaded in the amended petition, and all inferences of fact that may fairly and reasonably be drawn therefrom, respondents, by their demurrers, admit to be true. Martin v. Ray County Coal Co., 288 Mo. 241, 232 S.W 149. (2) The first ground assigned by respondents in their demurrers is that the petition does not state facts sufficient to constitute a cause of action against them. This objection cannot be sustained. The amended petition contains all the essential allegations for an action for breach of a contract. It alleges the execution of the contract by the parties to this suit, the terms of the contract, performance by appellants, its breach by respondents, and the damages resulting to appellants. It clearly alleges what was agreed to be done, what has been done, and what has been omitted together with the damages resulting from the omission. Nothing more is proper nor required. 13 C. J., pp. 714, 715. (3) The second and third grounds alleged for the demurrers are that the petition shows on its face that it is based upon an alleged contract arising out of and being a part of an illegal and unenforceable contract, and that neither of the plaintiffs have the right to sue upon the alleged cause of action. Respondents do not allege in what respect the contract is illegal, nor why it is not enforceable, nor why appellants do not have the right to sue on the contract. It is a blunderbuss shot, aimed at nothing in particular and at everything in general. Respondents' contract and agreement with the Cooper County State Bank was perfectly legal, equitable and proper, and in strict accord with sound public policy. There is no sound reason in law nor in equity why it should not be enforced. Sturdivant Bank v. Houck, 47 S.W.2d 135. (4) Respondent Leonard pleads that he was not a party to the supplemental agreement which he did not sign in 1928, but which he acknowledged and partly performed even before he entered into the final contract on April 27, 1931, and upon which this suit is founded. He partly performed the latter contract. This assignment is totally without merit. (5) The fourth ground for their demurrers assigned by respondents is that the petition shows upon its face that the alleged contracts sued upon do not conform to the requirements of the Statute of Frauds. This contention is likewise unsound and without merit.

Clark, Boggs, Peterson & Becker, Pendleton & Martin, John Windsor, Hampton Tisdale and Montgomery, Martin & Montgomery for respondents.

(1) The petition does not state facts sufficient to constitute a cause of action for the reason that it shows upon its face that the appellant bank failed to comply with a condition precedent to the fixing of respondents' liability, namely, the collection and conversion into cash of the assets of the Bunceton Bank on or before April 25, 1932. (a) Analysis of petition; demurrers; ruling on demurrers. Hockenberry v. Cooper County State Bank, 88 S.W.2d 1031. (b) Principles governing consideration of petition. Exhibits cannot be considered. Hockenberry v. Cooper County State Bank, 88 S.W.2d 1031; State ex rel. Union E. L. & P. Co. v. Pub. Serv. Comm., 333 Mo. 426, 62 S.W.2d 742; Jewell Realty Co. v. Dierks, 322 Mo. 1064, 18 S.W.2d 1043; Fugel v. Becker, 2 S.W.2d 743; Lackawanna Coal & Iron Co. v. Long, 231 Mo. 605, 133 S.W. 35. The petition is ambiguous, confusing and doubtful and therefore should be construed most strongly against the pleader. Koewing v. Greene County B. & L. Assn., 327 Mo. 680, 38 S.W.2d 40; Martin v. Ray County Coal Co., 288 Mo. 241, 232 S.W. 149. No inference and implication can be drawn contrary to an express averment in the petition. Farm & Home Savings & Loan Assn. v. Armstrong, 85 S.W.2d 461. (c) The contracts pleaded, if effective at all, impose a duty upon the transferee bank to convert the Bunceton Bank assets into cash on or before April 25, 1932. Assets Realization Co. v. Howard, 211 N.Y. 430, 105 N.E. 680; Webster's New International Dictionary, pp. 437, 492. (d) The performance by the transferee bank of its obligation to convert the Bunceton Bank assets into cash on or before April 25, 1932, is a condition precedent to the fixing of a respondent's liability to pay the transferee bank's loss. Hockenberry v. Cooper County State Bank, 88 S.W.2d 1031; Lowenthal v. McElroy, 181 Mo.App. 39; Commonwealth ex rel. Wilson v. LaGrange Bank & Trust Co., 65 S.W.2d 65; Assets Realization Co. v. Roth, 226 N.Y. 370, 123 N.E. 743; Cowles v. Buckingham, 49 Conn. 121. (e) The petition shows upon its face that the transferee bank had not converted all the Bunceton Bank assets into cash in April, 1932, and still had part of those assets in its hands at the time of the institution of this suit. Farm & Home Savs. & Loan Assn. v. Armstrong, 85 S.W.2d 461. (2) The petition fails to state a cause of action because it fails to allege that appellant State Bank performed a condition precedent to the fixing of respondents' liability, namely, that it validly assumed the obligations of the Bunceton Bank. Secs. 807, 2967, 5379, R. S. 1929; Farm & Home Savs. & Loan Assn. v. Armstrong, 85 S.W.2d 461; Swarens v. Pfnisel, 324 Mo. 1245, 26 S.W.2d 951; Wahl v. Cunningham, 320 Mo. 57, 6 S.W.2d 576, 67 A. L. R. 489; Nelson v. Brown, 140 Mo. 580, 41 S.W. 960; Miles v. Macon County Bank, 187 Mo.App. 230, 173 S.W. 713; City National Bank v. Fuller, 52 F.2d 870, 79 A. L. R. 71. (3) The transaction contemplated by the written contract of April 25, 1928, as a part of which respondent signed a written contract of indemnity, was never consummated and was materially altered, and therefore, respondents were immediately released from the contract of indemnity. Employers' Indemnity Corp. v. Garrett, 327 Mo. 874, 38 S.W.2d 1049; Bank of Moberly v. Meals, 316 Mo. 1158, 295 S.W. 73; Rawleigh Medical Co. v. Modde, 209 S.W. 958. (4) The petition does not state a cause of action because respondents' alleged contract of indemnity is a contract to indemnify for loss suffered in the performance of an illegal transaction and therefore unenforceable. Sec. 5379, R. S. 1929; Harrington's Admr. v. Crawford, 136 Mo. 467, 35 L. R. A. 477; 14 R. C. L. 48-49. (a) The appellant State Bank acquired the Bunceton Bank assets and the duty to liquidate them under a verbal agreement in violation of Section 5379; therefore, the transaction was illegal. Sec. 5379, R. S. 1929; Public Service Comm. v. Ry. Co., 301 Mo. 157, 256 S.W. 226; State ex rel. v. Pub. Serv. Comm., 270 Mo. 429, 192 S.W. 958; Mobile, J. & K. C. Railroad Co. v. State, 89 Miss. 724, 41 So. 259, 122 Am. St. Rep. 295, affirmed 210 U.S. 187; Borg v. Illinois Term. Co., 16 F.2d 988; Cooper v. Bane, 110 Neb. 74, 193 N.W. 97, 196 N.W. 119; 15 Fletcher Cyclopedia Corporations, secs. 7041, 7043, 7044, 7053.

Hyde, C. Ferguson and Bradley, CC., concur.

OPINION

HYDE

This is an action at law on a contract, brought on behalf of plaintiff banks, in liquidation. The contract was made in connection with the transfer of the assets and assumption of the liabilities of another bank in 1928. The court sustained defendants' separate demurrers to plaintiffs' petition, which set up the grounds that it failed to state a cause of action, and that it showed plaintiffs to have no right "to sue upon the alleged cause of action therein." Plaintiffs declined to plead further and from the judgment entered for defendants, plaintiffs appealed.

The material facts hereinafter stated were alleged in plaintiffs' petition. Prior to April 25, 1928, there were two banks in business in the town of Bunceton. These were the Bank of Bunceton, hereinafter called the Bunceton Bank, and the Cooper County Bank, hereinafter referred to as the County Bank. On that date, the newly organized Cooper County State Bank commenced business. We will refer to it as the State Bank. On that date also, the two old banks ceased business and their assets were transferred to the State Bank under the circumstances and pursuant to the contracts described in the petition.

These transactions were stated to be, as follows:

First: The Bunceton Bank made a contract with the County Bank ("because, as the result of the examination of the assets of said Bank of Bunceton, the then Commissioner of Finance of the State of Missouri deemed it a public advantage to the stockholders of said Bank of Bunceton that said contract be entered into"), which provided that the County Bank "should assume and agree to pay and did thereby assume . . . all amounts due from said Bank of Bunceton to its depositors and all the other creditors" except to its stockholders and a certain $ 20,000 liability under a "guarantee or trust agreement;" and that "said Bank of Bunceton should transfer to said Cooper County Bank or its successors and assigns, all of its property and assets of record on its books as of the 25th day of April, 1928, which said assets of said Bank of Bunceton, during the period intervening between April 25, 1928, and April 25, 1931, said Cooper County Bank, and its successors and assigns, should undertake to collect and convert into cash, and . . . should retain out of such proceeds an amount equal to the amount of the aforesaid liabilities of the Bank...