Phelps v. Scott

Decision Date03 July 1930
Docket NumberNo. 28578.,No. 28579.,28578.,28579.
Citation30 S.W.2d 71
PartiesW.F. PHELPS, JOHN F. McKINLEY and C.V. WHEAT, Appellants, v. W.H. SCOTT, J.D. ALEXANDER, J.S. LEA, LOYAL E. SCOTT, R.L. MATHEWS and BANK OF AURORA. BANK OF AURORA v. W.H. SCOTT, JOHN F. McKINLEY, C.V. WHEAT, J.D. ALEXANDER, R.L. MATHEWS, J.S. LEA and W.F. PHELPS: W.F. PHELPS, Appellant; W.H. SCOTT, Respondent.
CourtMissouri Supreme Court

Appeal from Lawrence Circuit Court. Hon. Charles L. Henson, Judge.

AFFIRMED.

J.L. McNatt and E.J. McNatt for appellant.

(1) The evidence shows and the court found that W.H. Scott furnished the entire consideration for the payment to the Bank of Aurora of the full amount of the judgment held by it against himself and his co-judgment debtors. Under such circumstances, the judgment was thereby extinguished as a matter of law, regardless of the intention of the parties to this transaction. The motion to quash the execution based upon this judgment should therefore have been sustained; and the court should have cancelled such judgment of record in the case of W.F. Phelps v. W.H. Scott et al. Hull v. Sherwood, 59 Mo. 172; McDaniel v. Lee, 37 Mo. 204; Guerney v. Moore, 131 Mo. 670; 34 C.J. 690, sec. 1063; Black on Judgments (2 Ed.) sec. 995; 2 Freeman on Judgments (5 Ed.) 1132-4; 68 L.R.A. (Annotations) pp. 514-516; Harbeck v. Vanderbilt, 20 N.Y. 395; Booth v. Bank, 74 N.Y. 228; Lynch v. Jones, 166 N.Y. Supp. 1047; Gotthelf v. Krulewitch, 138 N.Y. Supp. 756; Railway Co. v. Pickarski, 186 N.Y. Supp. 319; Rosenthal v. Ry. Co., 179 N.Y. Supp. 593; Green v. Boston, 232 Mass. 553; Cote v. Nav. Co., 213 Mass. 177; Adams v. Drake (Mass.), 1 Cush. 504; Hammatt v. Wyman, 9 Mass. 138; Hubble v. Berry, 180 Ind. 513; Zimmerman v. Gaumer, 152 Ind. 552; Frank v. Traylor, 130 Ind. 145; Montgomery v. Vickery, 110 Ind. 211; Klippel v. Shields, 90 Ind. 81; Shields v. Moore, 84 Ind. 440; Porter v. Dile, 44 Vt. 520; Allen v. Ogden, 12 Vt. 9; In re Estate of Baby, 87 Cal. 200; Adams v. Bus Line, 184 Cal. 710; Trust Co. v. McGregor, 6 Ida. 134; Russell v. Hugunin, 2 Ill. 562; Worden v. Jones, 1 Kan. App. 501; Ebel v. Stringer, 73 Neb. 247; Edjerly v. Emmerson, 23 N.H. 555; Sager v. Moy, 15 R.I. 528; Fowler v. Wood, 31 S.C. 398; Faires v. Cockrell, 88 Tex. 428; Deleshaw v. Edelen, 31 Tex. Civ. App. 416; Grizzle v. Fletcher (Va.), 105 S.E. 454; Preslar v. Stallworth, 37 Ala. 402; Dunn v. Beamer, 126 N.C. 764; Towe v. Felton, 7 Jones (N.C.) 216; Snyder v. Malone, 125 Wis. 114; Lillie v. Bennet, 232 Fed. 104. To secure the benefit of a judgment lien against a co-surety, the one paying the amount of the judgment should proceed by bill, suit, petition, or some other proceeding in equity, wherein the equitable rights of the respective parties may be adjudicated or enforced. 6 Paige, 32, 3 L. Ed. 886; 6 Paige, 254, 3 L. Ed. 254; Fowler, Foster & Co. to use of Moore v. Smith (S.C.), 5 L.R.A. 721. (2) The pleadings and evidence in these cases established a complete case of fraudulent representations on the part of W.H. Scott. (a) False representation as to the financial standing of the corporation made by its managing officer to a director of said corporation that is relied upon by said director, establishes a case of fraud. Snyder v. McAtee, 165 Mo. App. 260, 168 S.W. 484. (b) In such case the law implies knowledge of the falsity to such manager. Snyder v. McAtee, supra. (c) This also applies to misrepresentations knowingly made regarding the financial standing of the corporation or an individual where relied upon by the other party. Johnson v. Bank, 287 S.W. 835; Fall v. Hornbeck, 132 Mo. App. 588. (3) Contribution is a right of action that accrues to one jointly liable with others who was obliged to and does actually pay off and discharge the common debt. Yore v. Yore, 240 Mo. 451. (4) In any suit or proceeding for a contribution between joint debtors, all of joint debtors must be made parties to such proceeding so that rights of all parties can be adjusted in one suit. Carr v. Waldron, 44 Mo. 393. (5) No statement either written or oral was made to the motion to quash the execution by W.H. Scott asking for affirmative relief against W.F. Phelps, but his oral answer to said motion was simply a general denial. (a) Facts not pleaded cannot be made the subject of relief and where no set-off or counterclaim is pleaded the evidence in support thereof is inadmissible. Sprink v. Mueller, 77 Mo. App. 85. (b) A party cannot state one cause of defense and recover on a different one; he must stand on the case made by his pleadings. Weil v. Poston, 77 Mo. 284. (c) Whenever a defendant intends to rest his defense upon any fact, which is not included in the allegations necessary to the support of the plaintiff's case, he must set it out according to the statute in ordinary and concise language, else he will be precluded from giving evidence of it upon the trial. Northrup v. Insurance Co., 47 Mo. 435; Grafeman Dairy Co. v. Bank, 315 Mo. 849. (d) A different relief given a party to a suit than asked or contemplated by the pleadings would deprive the other party of some right of process to which he is entitled. Bick v. Dixon, 148 Mo. App. 703. (e) Relief granted under any judicial proceedings must be limited to facts stated in the petition or answer. Schneider v. Patton, 175 Mo. 684; Howard v. Scott, 225 Mo. 685. (6) Judgment must dispose of all parties. Strawhan v. Farrar, 296 S.W. 191.

William B. Skinner for respondents.

(1) "Where a surety pays a judgment against himself and others with the intent of extinguishing the judgment it will have that effect, but if nothing appears as to the intent with which the payment is made, the better opinion appears to be that the judgment is discharged as far as any benefit which the creditor might otherwise personally derive therefrom is concerned, but kept alive as between all parties thereto for the purpose of enforcing the rights of the surety who makes the payment; and it will be presumed that it was the intention of the surety to keep the judgment alive so that he may be subrogated to the creditor's rights thereunder. In such case no assignment nor agreement for assignment is necessary, as the rights of the surety result from the operation of the law." 1 Brandt on Suretyship, pars. 242, 243; Stearns on Suretyship, 240 to 243; Bispham's Principles of Equity, pars. 335, 336; Furnold v. Bank, 44 Mo. 336; Berthold v. Berthold, 46 Mo. 557; Swope v. Leffingwell, 72 Mo. 359; Ferguson's Admr., v. Carson's Admr., 86 Mo. 679; Benne v. Schnecko, 100 Mo. 257; Harper v. Rosenberg, 56 Mo. App. 388; Cauthorn v. Berry, 69 Mo. App. 404; Brown v. White (N.J.), 80 Am. Dec. 226; Williams v. Riehl (Cal.), 59 Pac. 762; Honce v. Schram (Kan.), 85 Pac. 535; Thomas v. Home Mutual B. & L. Assn. (Ill.), 90 N.E. 1081; O'Keefe v. Coal Co. (W. Va.), 115 S.E. 579; Wright v. Grover & Baker, 82 Pa. St. 80; Cummings v. May (Ala.), 20 So. 307; Townsend v. Whitney, 75 N.Y. 425; Anglo-American Land Co. v. Busch (Iowa), 50 N.W. 1063. "Where a person has paid money for which others are responsible, the equitable claim which such payment gives him on those who were so responsible, shall be clothed with the legal garb with which the contract he has discharged was invested." 12 Wheat. 594, 6 L. Ed. 740. Where one surety, against whom judgment has been rendered with his co-sureties, pays the debt, he has the right to be put in the place of the creditor and to that end may be subrogated to the rights of the judgment itself and have the benefit of its lien and the priority which it gives the creditor for his exoneration. McDaniel v. Lee, 37 Mo. 204; Furnold v. Bank, 44 Mo. 336; Ferguson v. Corson, 86 Mo. 679; 13 C.J. 833, par. 26; Honce v. Schram, 85 Pac. 535. The remedy under the statute is not exclusive and on payment of a judgment by one surety, he may have it assigned to him by the creditor and enforce contribution between the judgment debtors in the same case in which their common liability is established. Harper v. Rosenberg, 56 Mo. App. 388; Cauthorn v. Berry, 69 Mo. App. 404; Dodd v. Winn, 27 Mo. 501; Van Petten v. Richardson, 68 Mo. 379. Where a party seeks subrogation for a judgment paid by him, such judgment seems to be conclusive in the latter proceedings. Pitts v. Fugate, 41 Mo. 405; State ex rel. v. Rainey, 74 Mo. 234; Harper v. Kemble, 65 Mo. App. 519. (2) When a court of equity acquires jurisdiction of a cause it will not relax its grasp upon the res until it shall have afforded adequate and complete justice between the parties. Real Estate Co. v. Collonious, 63 Mo. 295; Boland v. Ross, 120 Mo. 216; McDaniel v. Lee, 37 Mo. 204; Waddle v. Frazier, 245 Mo. 403; School District v. Holt, 226 Mo. 415; McCollum v. Boughton, 132 Mo. 621. (3) Representations not as to existing facts but in the nature of opinions or assumed future acts are not available as the ground of action for deceit or fraud. Davidson v. Hobson, 59 Mo. App. 130. One is not responsible for a mere expression of opinion or belief as to the value of property, and where the statement or expression relied on is not one of fact but is only a statement of opinion or belief as to something that may be accomplished, may happen or be worked out and realized in the future, is not wrongful, and furnishes no basis for a charge of fraud or deceit. Franklin v. Hollie, 7 Mo. App. 241; Voorhis v. Smith, 11 Mo. App. 108; Cahn v. Reid, 18 Mo. App. 115; Davidson v. Hobson, 59 Mo. App. 130; Bank v. Hunt, 76 Mo. 439; Anderson v. McPike, 86 Mo. 293; Nauman v. Oberle, 90 Mo. 666; Bank v. Hulton, 224 Mo. 67.

COOLEY, C.

The two above styled cases come here on separate appeals and are docketed as separate cases. The contending parties and the facts involved are the same. By agreement the cases were tried together as one case and the same bill of exceptions was filed in both cases. The same relief is sought in both. In fact, the two proceedings present substantially the same controversy, and were so...

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