State v. Regent Laundry Co.

• Decision Date: 30 December 1916
• Docket Number: No. 14525.,14525.
• Citation: 196 Mo. App. 627,190 S.W. 951
• Parties: STATE, to Use of GOODMAN et al., v. REGENT LAUNDRY CO. et al.
• Court: Missouri Court of Appeals

190 S.W. 951

196 Mo. App. 627

STATE, to Use of GOODMAN et al., v. REGENT LAUNDRY CO. et al.

No. 14525.

St. Louis Court of Appeals. Missouri.

December 30, 1916.

Appeal from St. Louis Circuit Court; Wilson A. Taylor, Judge.

Proceedings by the State of Missouri, to the Use of Nat J. Goodman and another, against the Regent Laundry Company and others, in which defendant Charles H. Wilson filed a counterclaim. From a judgment for plaintiffs and for defendant Wilson on his counterclaim, plaintiffs appeal. Affirmed.

William F. Fahey, of St. Louis, for appellants. Frank H. Haskins, of St. Louis, for respondents.

ALLEN, J.

This is an action upon an attachment bond executed by defendants Regent Laundry Company, a corporation, and Wilson, as principals, and defendants Renard and Young, as securities, in the penal sum of $2,200. Defendant Wilson interposed a counterclaim, the nature of which will be later shown. The trial, before the court and a jury, resulted in a verdict for plaintiffs on the bond sued upon, assessing their damages at the sum of $518.77, and in favor of defendant Wilson on his counterclaim in the sum of $667. From a judgment entered accordingly, the plaintiffs prosecute the appeal now before us.

The attachment suit, in which was given the bond here sued upon, was instituted on or about September 4, 1906, and grew out of a written agreement of date August 3, 1906, executed by these plaintiffs, Nat J. Goodman and Stella M. Goodman, the defendants Regent Laundry Company and Chas. H. Wilson, one D. L. Cahn and one B. S. Seasongood. In the writing defendant Wilson was named as the party of the first part, these plaintiffs as parties of the second part, D. L. Cahn and Ellen Cahn, his wife, as parties of the third part, Seasongood as party of the fourth part, and the defendant Regent Laundry Company as party of the fifth part; but neither Ellen Cahn nor the Regent Laundry Company signed the instrument. This agreement provided that the party of the first part therein (Wilson) agreed to purchase from the parties of the second and third parts (these plaintiffs and Cahn and wife) 35 shares of the capital stock of the Regent Laundry Company, agreeing to pay therefor at the rate of $125 per share, such purchase price to be paid as follows: The sum of $1,850 to be paid the Mercantile Trust Company to take up a note of the Regent Laundry Company, $2,200 to be paid to these plaintiffs, and the remaining $325 to be paid to Cahn and his wife. Following this the agreement contained a paragraph as follows, viz.:

"And the parties of the second, third and fourth parts hereby agree and covenant with the party of the first part that with the exception of the said one thousand eight hundred fifty dollars ($1,850), note, the party of the fifth part is not indebted to any person, firm or corporation in any sum other than the current bills for the month of July, 1906, excepting perhaps $200, and they do hereby warrant that the outstanding accounts belonging to the party of the fifth part will at least equal said current bills for the month of July, 1906."

The agreement further provided that the plaintiffs herein would not in any way engage in the laundry business for a certain period of time within a certain prescribed territory; that they agreed to sell to Wilson 25 shares of the capital stock of the Regent Laundry Company at the price mentioned; and that Cahn and wife agreed to sell to Wilson 10 shares of the capital stock of said company.

Though the instrument was not signed by Mrs. Cahn nor the Regent Laundry Company, it was delivered and was acted upon. It appears that defendant Wilson paid the note of the Regent Laundry Company for $1,850, paid the said sum of $2,200 to these plaintiffs, and the sum of $325 to Mrs. Cahn, and received the 35 shares of stock of the Regent Laundry Company, being one-half of that company's capital stock. Thereafter it was discovered that the Regent Laundry Company was indebted to various persons in the sum of $1,154.77, exclusive of current bills for the month of July, 1916, and exclusive of the note for $1,850 above mentioned. Thereupon the Regent Laundry Company and Wilson instituted against these plaintiffs and Cahn and Seasongood, the attachment suit above mentioned, as for a breach of the covenant contained in the paragraph of the aforesaid contract which we have quoted in full above. In that action there was, at the court's direction, a verdict for the defendants therein (these plaintiffs) on their plea in abatement. Upon the trial on the merits, the plaintiffs therein were forced to a nonsuit, and upon the court's refusal to set the same aside they appealed to this court. On that appeal—for the reason stated in the opinion—we could review only the record proper, and, finding no error therein, the judgment of nonsuit entered by the circuit court was affirmed. See Regent Laundry Co. v. Goodman et al., 142 Mo. App. 716, 121 S. W. 1082. Thereafter, to wit, on November 19, 1909, the present action was instituted by these plaintiffs on the bond given in the attachment suit as stated above.

It is unnecessary to notice the petition herein. The joint answer of defendants Renard and Young admits the execution of the bond sued upon, and denies each and every other allegation of the petition. The answer of defendant Regent Laundry Company is a general denial. Defendant Chas. H. Wilson interposed a general denial, coupled with a counterclaim predicated upon a breach of plaintiffs' said covenant in the contract of August 3, 1906, being the identical cause of action upon which Wilson and his codefendant Regent Laundry Company had sought a recovery against these plaintiffs in the above-mentioned attachment suit; Wilson averring that the former action, prosecuted by him and the Regent Laundry Company, resulted in a nonsuit, as we have stated above.

In their reply the plaintiffs plead that in the attachment suit the ruling of the trial court, in forcing the plaintiffs therein to a nonsuit, was based upon a determination by that court that the written instrument of August 3, 1906, created no obligation in favor of defendant Wilson and his codefendant Regent Laundry Company, or either of them, against these plaintiffs, "that the subject-matter of said counterclaim has been finally adjudicated," and that defendant Wilson "is barred from further action thereon or from seeking to question said determination, finding, and judgment." The reply admits that on or about August 3, 1906, defendant Wilson agreed to purchase and did purchase from plaintiffs and Cahn and wife 35 shares of the capital stock of the laundry company, and paid the consideration therefor as stated above, but avers, in effect, that the alleged written instrument upon which the counterclaim is predicated never became a valid and subsisting contract binding upon plaintiffs; that it was understood and agreed, between all of the parties concerned, that the writing should be signed by all of the parties mentioned therein before becoming valid and effective; that it was in fact not signed by the Regent Laundry Company nor by Mrs. Ellen Cahn, by reason whereof it acquired no validity. Certain denials are made, putting in issue matters set up in the counterclaim, but they need not be here detailed.

On motion of defendant Wilson the court struck out all of that part of the reply which sought to set up the ruling and judgment in the attachment suit as a bar to the prosecution of defendant Wilson's counterclaim.

The questions before us on appeal relate entirely to the counterclaim; and touching that it need only be said that there was evidence pro and con on the issue as to whether the written agreement of August 3, 1906, was signed, by those who executed it, with the understanding and intention that it should not become effective unless signed by all parties named therein; and that plaintiffs' counsel, for the purposes of this case, stipulated that on August 3, 1906, the Regent Laundry Company was indebted to various persons in the sum of $1,154.77, exclusive of current bills for the month of July, 1906, and exclusive of the note for $1,850 mentioned in the counterclaim.

I. The first point made by learned counsel for appellant is that the written instrument upon which the counterclaim of defendant Wilson is predicated never became binding upon plaintiffs for the reason that it was never signed by Mrs. Ellen Cahn, and that the court erred in admitting the writing in evidence and in refusing to direct a verdict for plaintiffs on the counterclaim. The trial court, as appears from its rulings throughout, took the view that the writing presumptively took effect and was binding upon the parties who signed it, upon its delivery, and that the burden of proof was on plaintiffs to show that the understanding and intention of such parties were to the contrary. This is in accord with the settled law in this state as to the general rule applicable to such a situation.

In Muehlbach v. Railroad, 166 Mo. App. loc. cit. 314, 148 S. W. 456, it is said by Johnson, J.:

"The rule applicable to such cases is that a party who signs and delivers an instrument is bound by the obligations he therein assumes although it is not signed by all the parties named in it unless it appears that the parties signing mutually intended that it should be inchoate and incomplete and not take effect as a contract until signed by all the parties named. State ex rel. v. Sandusky, 46 Mo. 377; Donnell Mfg. Co. v. Repass, 75 Mo. App. 420; Gay v. Murphy, 134 Mo. 98 [34 S. W. 1091, 56 Am. St. Rep. 496]; Mattoon v. Barnes, 112 Mass. 463; Dillon v. Anderson, 43 N. Y. 231; Grafeman Dairy Co. v. St. Louis Dairy Co., 96 Mo. App. 495 ; Naylor v. Stene 104 N. W. 685; Edwards v. Gildemeister, 61 Kan. 141 ; American Pub. Co. v. Walker, 87 Mo. App. 503. And the burden is on the party attacking the contract to show that when he signed it was agreed that the contract should not take effect...