Mooney v. O.P. Mooney Co.

• Decision Date: 12 December 1912
• Citation: 71 Wash. 258,128 P. 225
• Parties: MOONEY v. O. P. MOONEY CO.
• Court: Washington Supreme Court

128 P. 225

71 Wash. 258

MOONEY v. O. P. MOONEY CO.

Supreme Court of Washington

December 12, 1912

Department 1. Appeal from Superior Court, King County; John S. Jury Judge.

Action by Rufus P. Mooney against the O. P. Mooney Company. From a judgment for plaintiff, defendant appeals. Reversed, with directions to enter judgment for defendant.

Roney & Loveless, of Seattle, for appellant.

Henry S. Noon, of Seattle, for respondent.

GOSE J.

This is a suit upon two promissory notes. The defendant has appealed from an adverse judgment. The facts are these: Prior to the 5th day of February, 1908, one O. P. Mooney owned and personally conducted a stationery store in the city of Seattle. On the 30th day of September, 1907, he hired from the respondent, a brother, the sum of $2,000, and gave him his interest-bearing note therefor, payable six months after date. The money was deposited in the bank to the credit of O P. Mooney, and used generally in the business. On the date first mentioned O. P. Mooney, his wife, Katy A. Mooney, and William A. Wood, organized the appellant corporation. On the same day O. P. Mooney made the following offer to appellant 'O. P. Mooney offers to sell to O. P. Mooney Company the good will and stock and business and all sums of money due him for $33,000, and to take paid-up capital stock for that amount, and he directs that 166 shares be issued to himself, 162 shares to be issued to Kate A. Mooney, and two shares to Wm. A. Wood. O. P. Mooney.' Its acceptance was as follows: 'Whereas, O. P. Mooney offers to sell to O. P. Mooney Company the good will and stock and business and all sums of money due him for $33,000, and take paid-up capital stock for that amount: Now, therefore, be it resolved that the O. P. Mooney Company accepts said offer of O. P. Mooney, and the president and secretary are directed to issue to O. P. Mooney 166 shares, 162 shares to be issued to Katy A. Mooney, and two shares issued to William A. Wood in full payment of the respective subscriptions to the capital stock. Wm. A. Wood, Secretary.' O. P. Mooney then made the transfer in harmony with the offer and acceptance. Thereupon the appellant issued its capital stock as agreed upon. The business was thereafter carried on by the appellant. The three stockholders were elected trustees and the trustees elected O. P. Mooney as president and manager, Katy A. Mooney as vice president, and William A. Wood as secretary. O. P. Mooney and Katy A. Mooney continued to hold their respective offices in the corporation until the 26th day of November, 1910, when they resigned, and were succeeded by new trustees and officers. William A. Wood continued as secretary and bookkeeper until November 1, 1908, when he was succeeded by Frederick W. Hill, who served in that capacity until the 26th day of November 1910, when he resigned and a successor was elected. Hill acted in the double capacity of bookkeeper and general manager from the 1st day of March, 1911, until the 27th day of August following, when the appellant's assets appear to have been sold to a third party. On the 29th day of March, 1908, O. P. Mooney gave his personal note to the respondent, payable in 60 days, for the $2,000 which he had hired, and the first note was surrendered. Between that date and July 11th, the appellant paid to the respondent $400 on the last-named note, and on that date gave him three notes, two of which were for $500 each due in three and fix months, respectively, and the third was for $600, due in nine months, and the respondent surrendered the second Mooney note. The appellant's notes were signed, 'O. P. Mooney Co., by O. P. Mooney, President.' There was no consideration for these notes other than the surrender of the Mooney note. The appellant paid the $500 note first maturing. All of the appellant's books showed the appellant as the maker of these notes and the amount of each thereof. The notes were thereafter shown as a liability against appellant in all of its financial statements to the bank with which it did business, and to the commercial agencies. Interest payments were made from time to time by the appellant, acting through its president and secretary. The last payment was made by Manager Hill, April 11, 1911, after the election of the new officers. There is no evidence that the new trustees knew of the payment at the time it was made, or that Katy A. Mooney knew of the notes until a short time before the commencement of the suit. Manager Hill says that he sent to the new trustees three statements of the resources and liabilities of the appellant. The first one bears date January 14, 1911, and shows: 'Bills payable, R. P. Mooney, $1,100.' The other two statements bear date, respectively, March 1, 1911, and May 1, 1911. The former shows bills payable $1,100, and the latter shows the same item, $1,182.87, without disclosing the name of the creditor. O. P. Mooney had the entire management of appellant's business from the date of its incorporation until he resigned in November, 1910. He and Katy A. Mooney separated on February 5, 1908, and were divorced on April 13th following. O. P. Mooney filed a voluntary petition in bankruptcy in September, 1910, and deceased before the trial of this action.

The court found (1) that the appellant assumed the indebtedness of O. P. Mooney; (2) that the notes were given 'with the sufferance and acquiescence' of Katy A. Mooney; (3) that the sale by O. P. Mooney to the appellant was a sale in bulk, and that the statutory affidavit was 'neither asked nor demanded'; and (4) that the appellant is estopped to dispute the validity of the notes. In pursuance of these findings, a judgment was entered against the appellant for the full amount of the principal of the two notes, the unpaid interest, attorney's fees, and costs.

The first finding--i. e., that the appellant assumed the indebtedness of O. P. Mooney--is contrary to the plain terms of the offer and acceptance. The entire transaction was in writing. Mooney offered to sell the good will, stock, and business, and all sums of money due him for $33,000, and to take as a consideration paid-up capital stock for that amount, and directed the issuance of 166 shares to himself, 162 shares to Katy A. Mooney, and 2 shares to William A. Wood. The offer was accepted, the property was conveyed, and the stock was issued as directed. This closed the transaction. The offer and acceptance constituted the contract, and they are plain, detailed, and specific, and no extrinsic aid is needed to interpret them.

Parol evidence to establish the assumption of Mooney's indebtedness was therefore inadmissible.

We may say, however, in passing, that the parol evidence was not sufficient to prove the assumption of the indebtedness. Mrs. Mooney says that the subject was not discussed. In this she is supported by the admitted fact that Mooney once personally renewed the note after the appellant took over the property. It is true that Wood said that the appellant paid some of Mooney's indebtedness, the amount not being stated. But it is also true that Mooney owed more than $12,000 which it did not pay. It is admitted that the trustee, Wood, knew of the execution of the notes and the payment of the interest. The evidence, however, does not show that the notes were given 'with the sufferance and acquiescence' of Katy A. Mooney, the other trustee and stockholder, as found by the court. Her testimony is that she was ignorant of the transaction until after the last payment of interest had been made, and there is nothing in the record rising to the dignity of evidence to prove the contrary.

The record is silent on the third finding; i. e., that a verified statement of the names and addresses of the creditors of Mooney was not given. The finding must have been based upon the legal presumption that it devolved upon the appellant to prove affirmatively that the statute was complied with. No such duty rested upon it, for two reasons: (1) The action is not grounded on fraud or the failure of the appellant to require the statutory affidavit, but it is grounded upon an alleged express contract for the payment of money to the respondent; and (2) there is no legal presumption that the requirements of the statute were not fulfilled. 16 Cyc. 1082; Sheffield v. Balmer, 52 Mo. 474, 14 Am. Rep. 430.

There remains for discussion the contention that respondent chiefly relies upon, that the appellant is estopped by its conduct to question the legality of the transaction. The facts have been stated, and need not be repeated. The respondent...