Nelson v. Diffenderffer

• Decision Date: 28 January 1914
• Citation: 163 S.W. 271,178 Mo. App. 48
• Parties: NELSON v. DIFFENDERFFER.
• Court: Missouri Court of Appeals

163 S.W. 271

178 Mo. App. 48

NELSON v. DIFFENDERFFER.

Springfield Court of Appeals. Missouri.

January 28, 1914.

Rehearing Denied February 12, 1914.

1. BILLS AND NOTES (§§ 149, 462)—ACTIONS— PETITION—CONSIDERATION.

Under Rev. St. 1909, § 9972, stating the requirements of a negotiable instrument, section 9977, providing that the negotiable character of an instrument is not affected by its failure to specify the value given or that any value has been given therefor, section 9995, providing that every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and section 10155, providing that a check is a bill of exchange drawn on a bank, payable on demand, and that, except as otherwise provided, the provisions of that chapter applicable to a bill of exchange payable on demand apply to a check, a check is a negotiable instrument and imports a consideration, and hence, the petition in an action on a check, which alleged that it was given on a settlement of certain business, without stating its nature, and an agreement then had that defendant owed and would pay the amount of the check, was not insufficient as failing to show a sufficient consideration.

2. BILLS AND NOTES (§ 92)—CHECKS—CONSIDERATION.

Plaintiff and defendant were stockholders in a corporation, and defendant was an officer of a bank from which it borrowed money. Defendant asked plaintiff to indorse the corporation's note to the bank, verbally agreeing that he would protect plaintiff from liability thereon. Judgment having been recovered on the note, certain stockholders agreed to pay it in proportion to their stock, and defendant gave plaintiff a check for his share, payment on which he subsequently stopped after plaintiff had paid the judgment in behalf of himself and the other stockholders entering into such agreement. Held, that the check was not unenforceable for want of consideration, as defendant's verbal promise to protect plaintiff, if within the statute of frauds, was nevertheless a sufficient consideration for a subsequent express promise in writing, and, moreover, as the corporation would have been liable to plaintiff had he been compelled to pay the judgment, plaintiff, by paying it in behalf of the stockholders and not for himself, changed his relation to the corporation as to the indebtedness.

3. GIFTS (§ 31)—CHECKS—CONSIDERATION.

A gift of a check is not complete until the check is paid, and, if without consideration, it may be revoked at any time before actual payment.

4. CONTRACTS (§ 76)—CONSIDERATION—MORAL OBLIGATION.

A purely moral obligation is not a sufficient consideration for a promise to pay, but the consideration need not be a legal and enforceable obligation.

5. CONTRACTS (§ 50)—CONSIDERATION—DETRIMENT TO PROMISEE.

The consideration for a promise to pay need not be of value to the promisor; it being sufficient that it is a detriment or inconvenience to the promisee, or that he change his relations or relinquish his supposed right against the promisor or a third person in consequence of such promise.

6. CORPORATIONS (§ 187) — SHAREHOLDERS — MUTUAL DEALINGS — CHECKS — FAILURE OF CONSIDERATION.

Where stockholders in a corporation agreed to pay a judgment against it in proportion to their stock, and defendant gave a check for his share to plaintiff, who paid the judgment, the fact that plaintiff permitted other stockholders to pay their shares by paying a part only in cash and delivering their stock for the balance did not render the check unenforceable, in the absence of any fraud or collusion or condition that the agreement to pay should not bind any of the parties unless all paid their shares in cash.

Appeal from Circuit Court, Laclede County; L. B. Woodside, Judge.

Action by A. T. Nelson against W. I. Diffenderffer. From a judgment for plaintiff, defendant appeals. Affirmed.

J. T. Moore and A. W. Curry, both of Lebanon, for appellant. J. W. Farris, of Lebanon, for respondent.

STURGIS, J.

This is a suit on a check signed by defendant and payable to plaintiff, drawn on the Bank of Lebanon, Mo. The answer is a general denial, which, not being sworn to, admits the execution of the instrument sued on, and pleads, as an affirmative defense, that such check was obtained by fraud and was given without any consideration. The court, being of the opinion that a sufficient consideration was shown, overruled defendant's demurrer to the evidence and submitted the issue of the check having been obtained by fraud to the jury, which, by its verdict for plaintiff, resolved that issue against the defendant.

The first assignment of error relates to the sufficiency of the petition and the refusal to require plaintiff to make same specific and definite, and is based on the rule announced in Glasscock v. Glasscock, 66 Mo. 627, to the effect that, while a petition declaring upon a written promise to pay need not aver any consideration, yet, if a consideration is averred, it must be shown to be a sufficient one. This contention goes to the averment in the petition that this check was given on a settlement had between plaintiff and defendant of certain business, not stating what, and an agreement then had that defendant owed and would pay the amount of the check. A check is a negotiable instrument and imports a consideration. Such is the effect of the negotiable instrument law. Sections 9972, 9977, 9995, and 10155, Rev. St. 1909. Such also is the effect of the decisions in this state. Famous Shoe & Clothing Co. v. Crosswhite, 124 Mo. 34, 27 S. W. 397, 26 L. R. A. 568, 46 Am. St. Rep. 424; Building & Loan Ass'n v. National Bank of Commerce, 126 Mo. 82, 28 S. W. 633. It certainly would not render the petition bad to state that the check was given in payment of an account stated; for, even in suing on an account stated, it is not necessary to allege how the indebtedness originally accrued. The particulars of the account need not be stated. Ward v. Farrelly, 9 Mo. App. 370, 371; McCormack v. Sawyer, 104 Mo. 36, 15 S. W. 998; 1 Ency. of Pleadings & Practice, 88; Bacon's Missouri Practice, § 152.

It is insisted that the facts of the case show that the check was given without any consideration, and that the court should therefore have directed a verdict for defendant. Attend then to the facts, as to which there is little material contradiction. The facts which are uncontroverted, or which the jury were authorized to find and which they did find by their verdict, are these: The plaintiff and defendant, together with Reed, Clark, and Rubey, constituted the resident stockholders of the Light & Power Company, a corporation, supplying electric light to the people of Lebanon, Mo. This corporation was not altogether prosperous and had occasion to borrow money from the Bank of Lebanon, of which defendant was an officer. In giving a note to this bank, the defendant requested the plaintiff and Reed to sign the same as accommodation indorsers for the Light Company, so as to make the note unobjectionable to the state bank examiner, and agreeing that in so doing the plaintiff would not be held personally liable, at least for the whole amount. We think there is sufficient evidence to support a holding that defendant made a verbal agreement to protect the plaintiff in becoming surety to his bank on the note of this corporation in which both were interested as stockholders. Judgment was afterward had on this note, and, the corporation failing to pay, plaintiff and the other indorser, Reed, were being pressed by execution to pay the same. Thereupon a meeting of the resident stockholders of the Light Company was had, at which plaintiff, owning two shares of stock, Reed, owning two shares, Clark, owning two shares, Rubey, owning four shares, and defendant, owning six shares, were present. It was there proposed that each party pay in discharge of this judgment an amount proportional to the stock owned by him, to which plaintiff and defendant and Reed fully agreed, and Rubey and Clark took the same under advisement. Defendant says that he did not agree to this proposition further than he would do whatever the others did, but, on a demurrer to the evidence, we must take the other version of it. It is also in evidence that defendant then figured up the amounts each would pay, his part being $196.20 (the amount of the check sued on), Rubey's part being $130.80, and plaintiff...