Sanders v. Chartrand

• Decision Date: 12 November 1900
• Citation: 158 Mo. 352,59 S.W. 95
• Court: Missouri Supreme Court
• Parties: SANDERS et al. v. CHARTRAND.

59 S.W. 95

158 Mo. 352

SANDERS et al. v. CHARTRAND.

Supreme Court of Missouri, Division No. 1.

November 12, 1900.

CORPORATE NOTE — DENIAL OF EXECUTION — ESTOPPEL IN PAIS — PLEADING — APPEAL — RECORD — ABSTRACT — SUFFICIENCY.

1. Estoppel in pais is an affirmative defense, which must be specially pleaded to be available.

2. Facts and circumstances relating only to the consideration for a note cannot raise an estoppel as to the right to deny its execution.

3. A corporation is not estopped to repudiate a note made by the secretary in excess of his authority, where it is not shown to have known or had express or implied notice thereof, or of any similar act performed in its behalf.

4. An abstract of the complete record below, which sets out the testimony in hæc verba, or in the narrative form, but which does not set out the ultimate facts proved, sufficiently complies with the requirement that it shall set forth enough of the record to enable the court to understand the questions presented for decision, and is the proper method of procedure.

Appeal from St. Louis circuit court; D. D. Fisher, Judge.

Action by Bernard Sanders and others against Mark R. Chartrand, receiver of the North End Building & Loan Association. From a judgment for plaintiffs, defendant appeals. Reversed.

This is a suit on five notes made by the North End Building & Loan Association to the order of the plaintiffs, — the first, dated February 8, 1896, for $400; the second, dated March 26, 1896, for $650; the third, dated October 6, 1896, for $525; the fourth, dated November 9, 1896, for $1,550; and the fifth, dated December 10, 1896, for $2,500, — all bearing 7 per cent. interest from date. The answer is a verified plea of non est factum, and a special plea of want of consideration, coupled with a general denial. The reply is a general denial. The suit was originally instituted in 1897 against the North End Building & Loan Association, but that association was dissolved by a decree dated April 13, 1898, and Mark R. Chartrand appointed receiver thereof, and the suit was revived against him. From 1892 until August, 1897, one John C. Obert was secretary of the North End Building & Loan Association, and during the same time he was also secretary of the North St. Louis Building & Loan Association. During the same period Charles James was the president of the North End Building & Loan Association. The notes in suit grew up in this way: The plaintiffs from time to time loaned money to the North St. Louis Association, and received from Obert, with whom all the dealings were had, notes of that association therefor. Some time about 1894 the plaintiffs desired to change their loans from the North St. Louis to the North End Association. This was done by the plaintiffs surrendering the notes of the North St. Louis Association to Obert, its secretary, and by Obert, as its secretary, drawing the check of the North End Association to his own order, or that of some one else, and having the check indorsed by the payee, and then issuing to the plaintiffs the notes of the North End Association. The record does not disclose whether or not the books of the North St. Louis Association showed that its notes had been paid, but it shows, vaguely, that the books of the North End Association did not show these notes to the plaintiffs among its bills payable. The record does not show clearly how much the plaintiffs had loaned the North St. Louis Association at that time. The notes sued on are renewal notes, except, perhaps, the last, dated December 10, 1896, for $2,500, and only a part of this note appears to represent any money ever loaned by the plaintiffs to the North St. Louis Association. The books of the North End Association did not show any of these transactions. The directors of the North End Association authorized the president and secretary to borrow money, and to issue notes therefor. Every one had implicit confidence in Obert, and he transacted the business of the association pretty much as he pleased. When the president's signature to a note or check was needed, it was made out by Obert, and by him taken or sent to the president for his signature, and he signed it without question. Obert testified that he signed these notes as secretary, and that he was, to a certain extent, familiar with James' signature, and that the signatures to these notes looked like Mr. James'; and again he was asked: "Q. Will you say you saw him [James] sign any notes at all issued to Sanders?" And he answered: "A. Yes; I know he signed some of them." Mr. James admitted the general course of business above pointed out, and said he had no recollection of ever signing these notes, but that, from an inspection of the notes themselves, he would say he had not signed them. George Hilke, one of the directors of the North End Association, testified that in 1895 Sanders spoke to him about the notes, and he spoke to Obert about them, and Obert said they were notes of the North St. Louis Association, and showed him the books of the two associations, and the books so showed, and this satisfied the witness. Afterwards Sanders showed him the notes, and he saw they were the notes of the North End Association. He told the president, James, about it, privately, about two years before the failure, and James said he knew nothing of it. About a week or two after the failure he brought up the subject of those notes at a meeting of the board of directors, and at first the directors did not want to believe there were any such notes. "Afterwards they said it was all right; he had the notes all right." Obert said he used the money so borrowed in the business of the North End Association.

In order to understand the theory upon which the parties tried the case in the circuit court, it is necessary to set out in full the instructions asked by them, respectively, and given and refused by the court. On behalf of plaintiffs the court instructed the jury as follows: "No. 1. The jury are instructed that if they believe and find from the testimony in this case that Obert, at the time of making of the notes sued on in this case, was the secretary of the North End Building & Loan Association, and as such intrusted with the custody of its seal and the general management of its business, and in such capacity was either authorized by express resolution of the board of directors, or, with their knowledge and assent, permitted, to borrow money for the purpose of said building and loan company, and to issue for such loans the notes of said company, executed by its president and secretary and attested by its seal; and you believe that under such circumstances said Obert, as such secretary, obtained of plaintiffs, for the purposes of said association, sums of money, and issued in equal amounts, and delivered to plaintiffs therefor, the notes sued on in this case, as and for the notes of said association, and that this was done by Obert in the regular course of his business as such secretary, and at the office of said association; and you further find from the evidence that plaintiffs are now the holders of such notes, and that they are unpaid by said association, — then your verdict must be for the plaintiffs, as to such notes; and it is immaterial to such verdict, under such circumstances, whether said Obert, after so obtaining such money, properly accounted therefor to said association or not. No. 2. The court instructs the jury that, although you should find that as to one or more of the notes sued on no cash money passed from plaintiffs to Obert, as secretary of the North End Building & Loan Association, as the consideration for such notes, yet if you find that at the time Obert was also secretary of the North St. Louis Building & Loan Association, and plaintiffs, being holders of said notes of said North St. Louis Association, indorsed and delivered the same to Obert as a consideration for such notes of the North End Association, and that Obert, as secretary of said North St. Louis Association, canceled said North St. Louis notes and drew checks on said North St. Louis Association, and then, as secretary of the North End Association, received money from the North St. Louis Association, such receiving was a sufficient consideration for such notes of the North End Association issued to plaintiffs with like effect as if plaintiffs had in the first instance directly delivered such money to Obert as such secretary. No. 3. The jury are instructed that even though you should find and believe from the testimony that Charles James, as president of the North End Building & Loan Association, did not sign the notes sued on, yet if you believe and find from the testimony that Obert issued said notes to plaintiffs under the circumstances stated in the instructions numbered 1, 2, and 3 given by the court, and plaintiffs received them in good faith, without knowledge that James had not signed them, then your verdict should be for plaintiffs, notwithstanding the name of Charles James, signed to said notes, was not in fact signed by said James, or with his authority." The fourth instruction given related to the quantum of plaintiffs'...