St. Charles Sav. Bank v. Thompson.

• Decision Date: 16 July 1920
• Docket Number: No. 20801.,20801.
• Citation: 284 Mo. 72,223 S.W. 734
• Parties: ST. CHARLES SAV. BANK v. THOMPSON.
• Court: Missouri Supreme Court

223 S.W. 734

284 Mo. 72

ST. CHARLES SAV. BANK v. THOMPSON.

No. 20801.

Supreme Court of Missouri, Division No. 2.

July 16, 1920.

Appeal from St. Louis Circuit Court; J. Hugo Grimm, Judge.

Suit by the St. Charles Savings Bank against J. W. Thompson. Judgment for defendant, and plaintiff appeals. Affirmed.

C. W. Wilson, of St. Charles, Jones, Rocker, Sullivan & Angert, and F. P. Tralles, all of St. Louis, and Theodore C. Bruere, of St. Charles, for appellant.

Marshall & Henderson and Brownrigg & Mason, all of St. Louis, for respondent.

WALKER, J.

In a suit on a demand note and contract brought in the circuit court of St. Louis there was a judgment for the defendant, and plaintiff appealed. The note and contract are as follows:

"$20,000.00

"St. Charles, Mo., January 2, 1901.

"On demand I promise to pay to the order of the St. Charles Savings Bank twenty thousand dollars for value received, at the St. Charles Savings Bank, with interest from maturity at the rate of 8 per cent. per annum.

                              "[Signed] J. W. Thompson."
                    "St. Charles, Mo., January 2, 1901
                

"Whereas, the undersigned executed and delivered to the St. Charles Savings Bank the above promissory note for the sum of twenty thousand dollars, now, in order to secure the payment of said note and interest and of all indebtedness of the undersigned to the St. Charles Savings Bank, at present existing or as it may arise from time to time, and in consideration of the premises and of an extension of time having been given by said bank to the undersigned by a renewal of the original indebtedness, as evidenced by the aforesaid note, the undersigned has assigned and by virtue of said assignment hereby pledges and delivers to said St. Charles Savings Bank the following life insurance policy owned by the undersigned in good faith free from liens or claims of any kind whatever, to wit: (Policy No. 780494, issued by the Mutual Life Insurance Company of New York on my life July 2, 1896, for the sum of twenty thousand dollars for the term of my life. This assignment is made with the express understanding that the above note is executed by me as collateral security, not only for my own note and indebtedness to the St. Charles Savings Bank, but also as collateral security for the note and indebtedness of the Thompson & Gray Quarry Company to said bank and for any renewal of any or both of said two notes.)

"And the undersigned hereby promises to pay all premiums and charges hereafter due on said policy of insurance, and in case of any failure to do so expressly authorizes said St. Charles Savings Bank to pay the same, and all such sums so paid hereafter by said St. Charles Savings Bank shall form and constitute a lien on the money insured by said policy and be considered a part of the indebtedness by the undersigned to said bank; and the undersigned hereby authorizes and empowers the St. Charles Savings Bank to collect and receipt for the amount of the said policy in the name of the undersigned and also to do and perform all acts necessary for the collection of said insurance money. In case of the nonpayment of the above note when the same becomes due, the St. Charles Savings Bank is also hereby authorized and empowered to change and convert said life insurance policy into a paid-up or nonassessable policy, or to surrender said policy to the company which has issued the same for such sum as said bank may deem proper; the undersigned hereby ratifying and confirming all acts the St. Charles Savings Bank may do and perform in the premises.

"When at the death of the insured or at the time said policy becomes due and payable, the above note, or any part or any renewal thereof, shall still remain due or unpaid, then said St. Charles Savings Bank shall apply the sum so paid on said policy, first, to the payment of all premiums and charges paid by it on said policy, and the cost for the collection of said policy of insurance, including attorneys' fees, if any; second, to the payment of the above note; and, third, to all other indebtedness of the undersigned to said bank, including protests and damages for the nonpayment of such debt, and any balance remaining shall be paid to the executor or administrator of the undersigned or to the beneficiary, if any, named in said policy, according to the terms thereof.

"Witness my hand and seal this the day and year aforesaid.

                            "[Signed] J. W. Thompson."
                

The plaintiff, St. Charles Savings Bank, is a banking corporation located and engaged in business in the city of St. Charles. On June 29, 1900, the Thompson & Gray Quarry Company, a corporation of which the defendant was president and principal stockholder, was indebted to plaintiff bank in the sum of $22,000, and at the same time the defendant was individually indebted to the plaintiff in the sum of $21,500. On that day the Thompson & Gray Quarry Company executed and delivered to plaintiff its note for $22,000 dated June 29, 1900, payable To the order of the plaintiff six months after the date thereof with 6 per cent. interest from date, and the defendant at the same time executed and delivered to plaintiff his individual note for the sum of $21,500, dated June 29, 1900, payable to the order of the plaintiff six months after date, with 6 per cent. interest from date.

These two notes became due and payable January 2, 1901, and defendant and the Thompson & Gray Quarry Company desired to secure from the plaintiff an extension of time for the payment of the indebtedness represented by said notes, and in order to do so the defendant executed and delivered to the plaintiff the collateral note and contract upon which the present action is based, and the plaintiff in consideration of said note and contract granted an extension of time for the payment of the Thompson & Gray Quarry Company note and the Thompson individual note. Under this arrangement these two notes were renewed from time to time. The Thompson individual note was renewed until the indebtedness it represented was paid off about February 24, 1903. The quarry company note was renewed from time to time, the last renewal being made June 19, 1905, for a term of six months. This renewal fell due December 19, 1905. The quarry company failed to pay said note or any part of the same, and the plaintiff refused to grant any further extensions for the payment of the indebtedness represented by the quarry company notes. This note of the quarry company with the accumulated interest thereon has never been paid, and is still due the plaintiff.

The quarry company having failed to pay its indebtedness of $22,000, the plaintiff on September 24, 1906, made formal demand on the defendant for the payment of the $20,000 evidenced by the note of January 2, 1901, under the terms of the contract attached thereto. Upon the defendant's failure to pay this demand, the plaintiff on December 18, 1906, commenced suit in the circuit court of the city of St. Louis against the defendant to enforce the payment of the $20,000 collateral note, together with 8 per cent. interest thereon from date of demand.

The petition, instead of pleading the collateral note and contract as a conditional obligation, counted upon it as an unconditional note for the payment of money. Filed with the petition was a copy of the note only, the contract that had theretofore been attached to it being omitted. At the time of the commencement of the suit of December 18, 1906, and thereafter, the collateral note and contract in suit in the present action was the only note or obligation held by the plaintiff against the defendant.

The defendant appeared and filed an answer and cross-bill, in which, after denying the execution of the note as described in the petition, he averred the execution and delivery to the plaintiff of the collateral note and contract in question, but stated that it was not given or intended to secure the payment of the quarry company note, but as collateral to secure the payment of defendant's individual debt to the bank, which debt he had subsequently paid. A reply was filed to the answer and cross-bill.

On March 20, 1912, the suit of December 18, 1906, was referred to a referee to try the issues. The matter came on for hearing and plaintiff offered in evidence the collateral note and contract, and the defendant objected to its admission on the ground that it was not the obligation counted upon in the petition, and upon the referee holding the objection well taken the offer was withdrawn, the hearing before the referee was postponed, and plaintiff, on September 12, 1912, filed an amended petition in which the plaintiff counted upon and filed therewith a verified copy of the collateral note and contract now in suit. On the same day the defendant filed a motion to strike the amended petition from the files and to abate the suit. On December 3, 1912, the court sustained said motion on the third and fourth grounds therein set forth, which are as follows:

"Third. Because the amended petition is an abandonment of the original petition and attempts to substitute a new and totally different cause of action for the cause of action originally sued on, and it is in no sense an amendment of the cause of action sued on, and the court has no power or jurisdiction to permit the same to be done.

"Fourth. Because the amended petition operates to discontinue the original action, and the cause of action stated in the amended...