School Dist. of Kansas City v. Stocking

• Decision Date: 04 May 1897
• Citation: 138 Mo. 672,40 S.W. 656
• Parties: SCHOOL DIST. OF CITY OF KANSAS CITY v. STOCKING et al.
• Court: Missouri Supreme Court

40 S.W. 656

138 Mo. 672

SCHOOL DIST. OF CITY OF KANSAS CITY v. STOCKING et al.

Supreme Court of Missouri.

May 4, 1897.

PROMISSORY NOTES — DELIVERY — CONSIDERATION — LEGALITY — PLEADING — EVIDENCE — GIFTS.

1. A school board having abandoned the idea of building a library, because of its want of power to raise funds which could be applied to purchasing a site, notes subsequently executed to it as a gift to be used in purchasing the site were based on a valid consideration, though no benefit accrued to the donor, where, in reliance on them, the board incurred expense in submitting to a vote of the district the question of issuing bonds for the building of the library, and the bonds were issued and sold.

2. The notes were not revoked by the donor's becoming insane before the site was purchased.

3. Nor did the purchase of the site before the notes were collected revoke them.

4. The erection of the library was not legally incumbent on the board, under Rev. St. 1889, §§ 8109, 8112, and hence the rule that the performance of an act legally incumbent on the party performing is not a sufficient consideration had no application.

5. The fact that the board, in reliance on the notes, ordered an election and issued the bonds, did not render the notes against public policy, as influencing the action of public officials.

6. Had the notes been illegal, as against public policy, it was not necessary to have pleaded that defense, where the consideration of the notes was denied, since the board must have proved the entire transaction, and the illegality would therefore have appeared.

7. There was a sufficient delivery of notes, where the maker, pursuant to agreement with the payee, delivered them to a third person, with directions for him to deliver them to the payee when called for.

8. Where notes for $25,000 were executed as a gift, evidence of the means of the maker was admissible, in an action on them, on the issue whether testator was of sound mind and capable of transacting business when he gave the notes, though it was incompetent on the issue of consideration.

Robinson, J., dissenting.

In banc. Appeal from circuit court, Jackson county.

Action by the school district of the city of Kansas City against William L. Stocking and another, executors of George Sheidley, deceased, on three notes. Judgment for plaintiff, and defendants appeal. Affirmed.

W. L. Stocking and C. O. Tichenor, for appellants. Gage, Ladd & Small, for respondent.

MACFARLANE, J.

Plaintiff, a public-school corporation, sues the defendants, as executors of George Sheidley, deceased, upon three promissory notes, dated March 9, 1894, each for $5,000, payable, respectively, 6, 12, and 18 months after date, one of which is as follows: "$5,000.00. Kansas City, Mo., March 9, 1894. Six months after date, I promise to pay school district of Kansas City, Missouri, or order, at the Union National Bank, Kansas City, five thousand dollars, for value received, with interest ____ at the rate of no per cent. per annum. George Sheidley." By answer, defendants admit the execution of the notes, but set up as defenses — First, that at the time of their execution the testator was of unsound mind, and incapable of making them; second, that they were wholly without consideration; and, third, that they were never delivered. The case was tried to a jury, and a verdict was found for the plaintiff on all three counts. Judgment was rendered in accordance therewith, and defendants appeal.

On the question of want of capacity of deceased to make the notes, defendants assign no error, but agree that that issue was fairly tried. The evidence shows that the building occupied by the school district for a library was regarded as wholly insufficient, and for several years prior to the execution of these notes the erection of a new building had been under consideration by the board of education. For the purpose of purchasing a site and erecting the building, an issue and sale of bonds of the district had been contemplated. Previous to this transaction, George Sheidley had expressed an intention of making a donation of $25,000 to the district, to be used in the purchase of books. About this time the board came to the conclusion that the proceeds of bonds could not be lawfully applied to the purchase of a site for the building, and, there being no other funds with which to make such purchase, it concluded that the enterprise would have to be abandoned. Sheidley, being informed of the difficulty, and probable failure of the enterprise for want of means to purchase a site, advised the board of his willingness to allow it to use the intended donation in any manner it saw fit. A meeting between him and a committee of the board was held, and his proposed donation for that purpose was accepted. Sheidley at the time did not have the ready money, but proposed giving his notes to the district, payable in the future, but promising that they would be paid whenever the money was needed. It was thereupon agreed that he should make five notes, of $5,000 each, payable to the district; and, as he was expecting to leave Kansas City the next morning, he agreed to place them in the hands of Thomas B. Tomb, for the board, to be handed to it when called for. The next morning, March 9, 1894, he executed the notes and delivered them to Tomb, as agreed, and informed the president of the board that he had done so. A meeting of the board was immediately called, and the president made the following report of what had been done: "Since recess was taken last Thursday evening, we had, in company with J. C. James and J. V. C. Karnes, called on Mr. George Sheidley, who had heretofore offered to give $25,000 towards buying books for use in the library building to be erected, and, owing to the embarrassment of the board about securing a site for said building, Mr. Sheidley agreed to change the form of his donation, and was willing to allow this sum to be used in such way as the board might deem best to secure the erection of said building; and, to make sure of such offer, he has placed said sum in the hands of Thomas B. Tomb, to be held for this board, and to be turned over whenever the board may call for the same to be used in securing said building." A vote of thanks was thereupon tendered to Mr. Sheidley for his liberal donation, and the following resolution was adopted: "Whereas, in the judgment of this board it is expedient that the school district borrow $200,000 for the purpose of erecting a public library building, containing the offices of the board of directors of the school district, and to issue therefor the bonds of the district: Therefore, resolved, that there be submitted to the qualified voters of the school district of Kansas City, in the county of Jackson and state of Missouri, at the biennial election for school directors to be held on the 3rd day of April, 1894, a proposition authorizing the board of directors of said school district to borrow on behalf of the school district the sum of $200,000 for the purpose of erecting a public library building, containing the offices of the board of directors of the school district, and for the payment thereof to issue the bonds of the school district. Such bonds to be of the denomination of $1,000 each, dated July 2, 1894, payable twenty years from their date, with interest at the rate of four per cent. per annum, payable semiannually on the second days of July and January in each year; both principal and interest payable, in gold coin of the United States of America, in the city and state of New York. Resolved, that the president and secretary of the board be, and they are hereby, authorized and directed to sign and publish, according to law, notice of the submission of such proposition, and to take all other necessary steps for the proper submission thereof, in accordance with the terms of this resolution." In pursuance of this resolution an election was held which resulted in an almost unanimous vote in favor of borrowing $200,000 for the purpose of erecting a public library building. Bonds were thereafter issued and sold, and the proceeds were placed in the hands of the treasurer. This was all concluded July 14, 1894. Mr. Sheidley was taken sick about the 1st of July, 1894, and was thereafter, until his death, incapable of attending to business. On the 14th of July, 1894, the president of the board demanded the notes of Tomb, who declined to deliver them, on account of objections by members of Sheidley's family. The board afterwards, in February 1895, purchased a site for $30,000, $5,000 of which was paid in cash, out of the general revenues of the district, and assumed mortgages on the land, extending over a number of years, for the balance of the purchase price. The board thereupon proceeded in the erection of the building.

At the request of the plaintiff the court gave the jury the following instructions: "(1) You are instructed that, in order to constitute a consideration for the notes in suit, it is not necessary that George Sheidley should have himself received, or have expected to receive, any benefit on account thereof. But, if you believe from the evidence that the plaintiff, through its board of education, relying upon the fact that the five notes had been executed and left with Mr. Tomb, incurred and paid expense in connection with the submission to a vote of the people of the question as to the issue of the bonds of the district, and other expenses in connection with the issue of the bonds, and did incur a liability of $200,000 by the issue and sale of the bonds, and that said action of the plaintiff, through its board of education, was induced by the promise of the defendant to execute said notes, and by his subsequent execution thereof, and that the purpose of defendant in making said promise and executing said notes was to enable and induce the plaintiff to take such action, this constitutes a good consideration for the notes. ...