School Consolidated Dist. No. 10 of Arbyrd v. Wilson

• Citation: 135 S.W.2d 349,345 Mo. 598
• Decision Date: 14 December 1939
• Docket Number: 36104
• Parties: School Consolidated District No. 10 of Arbyrd, a Corporation, v. W. J. Wilson, G. W. Krone, A. S. McDaniel, Artie M. Wilson and Fred H. Wallace, Administrators of the Estate of Thomas G. Wilson, H. S. Jones, J. F. Droke and H. J. Hardin, Appellants
• Court: United States State Supreme Court of Missouri

135 S.W.2d 349

345 Mo. 598

School Consolidated District No. 10 of Arbyrd, a Corporation, v. W. J. Wilson, G. W. Krone, A. S. McDaniel, Artie M. Wilson and Fred H. Wallace, Administrators of the Estate of Thomas G. Wilson, H. S. Jones, J. F. Droke and H. J. Hardin, Appellants

No. 36104

Supreme Court of Missouri

December 14, 1939

Appeal from Dunklin Circuit Court; Hon. James V. Billings Judge.

Affirmed.

Finch & Finch, John W. Noble, Alletha B. Noble and McKay & McKay for appellants.

(1) A party cannot sue on one cause of action and recover on another. Ohio & Miss. Ry. Co. v. McCarthy, 96 U.S 258, 24 L. R. A. 693; Henry County v. Citizens Banks, 208 Mo. 209; Henry County v. Farmers Bank, 208 Mo. 238; Jennings v. Cherry, 257 S.W 438; Hecker v. Bleish, 3 S.W.2d 1008; Gary v. Averill, 12 S.W.2d 747; Brown v. Brown, 90 Mo. 184. (a) These actions are inconsistent and proof of one disproves the other. Otto v. Young, 227 Mo. 193; Long v. Long, 111 Mo. 12; Bigelow on Estoppel (5 Ed.), p. 717. (b) The plaintiff had an adequate remedy at law to protect itself against loss of money and all funds belonging to plaintiff school district and that remedy is the petition for preference which is the sole, only and exclusive remedy so far as the issues in this cause are concerned and having pursued said remedy to final conclusion it is barred from any other or further action in this cause. Henry County v. Salmon, 201 Mo. 163; Clearmont School Dist. v. Jackson Bank of Clearmont, 37 S.W.2d 1006; In re Cameron Trust Co., 51 S.W.2d 1025; School Dist. No. 61 v. Railey Bros. Banking Co., 55 S.W.2d 699; Ralls County v. Commr. of Finance, 66 S.W.2d 115; Marion County v. First Savs. Bank of Palmyra, 80 S.W.2d 861; Cole County v. Central Mo. Trust Co., 257 S.W. 777. (2) The law in this case created the relationship of trustee and cestui que trust to whatever funds if any, were deposited by said school district in the purported Citizens Bank of Senath and the relationship of debtor and creditor never existed at any time. Clearmont School Dist. v. Jackson Bank of Clearmont, 37 S.W.2d 1006; In re Cameron Trust Co., 51 S.W.2d 1025; School Dist. No. 61 v. Railey Bros. Banking Co., 55 S.W.2d 699; Ralls County v. Commr. of Finance, 66 S.W.2d 115; Marion County v. First Savs. Bank of Palmyra, 80 S.W.2d 861. (a) The relationship of a depositary and school district, when duly established according to the provisions of law, as provided in the statute, is that of debtor and creditor, and all monies deposited by the treasurer of the school district becomes, in legal effect, the money of the depository bank, subject to its use in banking and the bank becomes indebted to the school district and its sureties become sponsors for the payment of that debt on demand. Henry County v. Salmon, 201 Mo. 163; Cole County v. Central Mo. Trust Co., 257 S.W. 777; Ralls County v. Commr. of Finance, 66 S.W.2d 117; Clearmont School Dist. v. Jackson Bank of Clearmont, 37 S.W.2d 1006; In re Cameron Trust Co., 51 S.W.2d 1025; School Dist. No. 61 v. Railey Bros. Banking Co., 55 S.W.2d 699; Marion County v. First Savs. Bank of Palmyra, 80 S.W.2d 861. (b) When the law providing for the establishment of a depositary for school districts has not been complied with, then all title to monies deposited by the treasurer of such school district in the bank is held by it in trust for the school district. Clearmont School Dist. v. Jackson Bank of Clearmont, 37 S.W.2d 1006; In re Cameron Trust Co., 51 S.W.2d 1025; School Dist. No. 61 v. Railey Bros. Banking Co., 55 S.W.2d 699; Ralls County v. Commr. of Finance, 66 S.W.2d 115; Marion County v. First Savs. Bank of Palmyra, 80 S.W.2d 861. (c) No contract of depositor and depositary ever existed between the plaintiff school district and defendant bank, nor did the relationship of debtor and creditor exist and the bond sued upon was without consideration and is void and cannot be enforced in this action. Henry County v. Salmon, 201 Mo. 163; Kirkwood v. Meramec Highland, 94 Mo.App. 637; Ring v. Kelly, 10 Mo.App. 411; Keith County v. Ogala, 64 Neb. 35, 89 N.W. 375; 9 C. J., pp. 20, 21. (3) The proof shows the charter of the Citizens Bank had expired August 17, 1929, which was prior to the execution of the purported bond sued on and upon the expiration of the charter the corporation ceased to exist and was dead and could neither sue or be sued. Sec. 5345, R. S. 1929; Bradley v. Reppell, 133 Mo. 545; Park v. Gibson, 268 Mo. 394, 188 S.W. 117; Hecht Bro. Clo. Co. v. Walker, 35 S.W.2d 372; Gray v. School Dist. No. 73, 28 S.W.2d 685; Richard v. Coal Co., 221 Mo. 158. (a) The effect of the dissolution of a corporation is to terminate its existence as a legal entity and render it incapable of suing or being sued as a corporate body or in a corporate name. It is dead and can no more be proceeded against as an existing corporation than could a natural person after his death. Park v. Gibson, 268 Mo. 394, 188 S.W. 117; Hecht Bro. Clo. Co. v. Walker, 35 S.W.2d 372; Gray v. School Dist. No. 73, 28 S.W.2d 685; Richard v. Coal Co., 221 Mo. 158. (b) The principal in the purported bond sued on having been a corporation whose charter expired prior to the execution of the bond never in fact signed the bond. Therefore, it is void as to the sureties. Bradley v. Reppell, 133 Mo. 545; Park v. Gibson, 268 Mo. 394, 188 S.W. 117; Hecht Bro. Clo. Co. v. Walker, 35 S.W.2d 372; Gray v. School Dist. No. 73, 28 S.W.2d 685; Richard v. Coal Co., 221 Mo. 158; Gay v. Murphy, 134 Mo. 98; Lossee v. Crawford, 5 S.W.2d 105.

Langdon R. Jones for respondent.

(1) The certificate of incorporation issued by the Secretary of State to a corporation is a final determination of its right to do business, and thereafter no one except the State can question its corporate existence. Mendenhall Co. v. Booher, 48 S.W.2d 122; Boatmen's Bank v. Gillespie, 209 Mo. 263; First Natl. Bank v. Rockefeller, 195 Mo. 15; Meramec Spring Park Co. v. Gibson, 268 Mo. 394, 188 S.W. 179; Webb v. Rockefeller, 195 Mo. 57, 6 L. R. A. (N. S.) 872. (a) The defendant sureties were all at the time of the signing of bond directors of the bank, and of course, owned at least five shares of stock in the bank. Defendant sureties held the bank out as a corporation and were acting officers and directors of the same from the time the bond was executed until the bank closed. If the court should rule that the bank failed to have its corporate life extended then such failure was the fault of these defendants sureties whose duty it was to have complied with the law extending the corporate life of the bank and they cannot take advantage of their own neglect of duty. In this situation the defendant sureties are estopped also to plead lack of economic capacity, of the principal on the bond. Swofford Bros, D. G. Co. v. Owen, 37 Okla. 616, L. R. A. 1916c, 189; Jones v. Dodge, 97 Ark. 248, L. R. A. 1915a, 472. (2) Not only our Missouri courts but those of other jurisdictions hold that in bonds given to protect public funds, even if the bond is not good as a statutory bond, it is good as a common law undertaking and the sureties are liable. These decisions further hold that the sureties are estopped to deny their liability on technical grounds that the bond is not in accordance with the statute. Henry County v. Salmon, 201 Mo. 154; State ex rel. Dunklin County v. McKay, 30 S.W.2d 92; Id., 49 S.W.2d 125; United States Fid. & Guar. Co. v. Kansas, 81 Kan. 660, 26 L. R. A. (N. S.) 865; Leeper, Groves & Co. v. First Natl. Bank, 29 L. R. A. (N. S.) 747; Henoch v. Chaney, 61 Mo. 191. (a) There are decisions in our State and other jurisdictions relative to replevin bonds which respondent believes peculiarly applicable to this case. Henoch v. Chaney, 61 Mo. 131; Leeper, Graves & Co. v. First Natl. Bank, 29 L. R. A. (N. S.) 747.

Bohling, C. Cooley and Westhues, CC., concur.

OPINION

BOHLING

This is an appeal by the sureties on the depositary bond of The Citizens Bank of Senath, Missouri, to the School Consolidated District No. 10 of Arbyrd from a judgment for the penalty of the bond, $ 15,000, to be satisfied upon the payment of $ 7,856.45, balance of principal, plus interest, due after crediting forty per centum preferential payments received from the Bank's estate. They question the effectiveness of the obligation, contending plaintiff should have been cast nisi on demurrer.

The Citizens Bank of Senath closed its doors January 28, 1933, with $ 9,678.38 of respondent's funds in its possession and credited to respondent's account. The parties are agreed said Bank was not the legally constituted depositary of the funds of plaintiff School District but held the same as trust funds payable as a preferred claim, and that the assets are insufficient to discharge the preferred claims in full.

Section 9362, Revised Statutes 1929 (Mo. Stat. Ann., p. 7211), provides that the board of education of consolidated school districts "shall select depositaries for the funds of such school district in the same manner as is provided by law for the selection of county depositaries . . ." Article 9 of Chapter 85 (Secs. 12184-12198), Revised Statutes 1929 (Mo. Stat. Ann., pp. 6455-6465), relates to county funds and the selection of the depositaries thereof. Briefly, said article, among other things, provides: The county court shall select depositaries every two years at the May Term; shall divide the county funds into not less than two nor more than ten equal parts for that purpose; cause due notice to be published (Sec. 12184); receive sealed bids, accompanied by certified checks, etc. (Sec. 12185); publicly open said bids, enter each upon its records and select the depositaries or depositary (Sec. 12186) and approve the bond required to be filed within ten days by the selected...