Swinney v. Continental Bldg. Co.

• Decision Date: 12 February 1937
• Docket Number: 31269
• Parties: Edward F. Swinney and E. H. Wright v. Continental Building Company, a Corporation, Appellant
• Court: Missouri Supreme Court

102 S.W.2d 111

340 Mo. 611

Edward F. Swinney and E. H. Wright v. Continental Building Company, a Corporation, Appellant

No. 31269

Supreme Court of Missouri

February 12, 1937

Appeal from Jackson Circuit Court; Hon. Denton Dunn, Judge.

Reversed.

Cooper Neel, Kemp & Sutherland for appellant.

(1) The requirements for membership prescribed by paragraph 4 of the proposal mean 3000 fully paid memberships; and "Applicants" and "Applications for Membership" are not synonymous with "Members" and "Memberships." (2) The proposal of June 7 1922, is not entire, but divisible as between the owners and the bondholders on the one hand and as between the owners and the applicants for membership on the other, and is distinct as to (a) consideration, (b) subject matter, (c) parties and (d) time of performance. State ex rel. Dolman v Dickey, 288 Mo. 92, 231 S.W. 582; Dick v. Riddle, 139 Mo.App. 584; Barlow Mfg. Co. v. Stone, 200 Mass. 158, 86 N.E. 306; Wooten v. Walters, 110 N.C. 255, 14 S.E. 734; Keeler v. Clifford, 165 Ill. 544, 46 N.E. 248; Williams v. Robb, 104 Mich. 242, 62 N.W. 352; Pierson v. Crooks, 115 N.Y. 544, 22 N.E. 349; Dibol v. Plant, 9 Iowa, 403; Dobbins v. Higgins, 78 Ill. 440; Paramount Famous Lasky Corp. v. Natl. Theater Corp., 49 F.2d 64; Elliott on Contracts, 1543; 4 Page on Law of Contracts, 2085; 6 R. C. L. 886; Howsman v. Trenton Water Co., 119 Mo. 309; St. Louis v. Wright Contracting Co., 202 Mo. 470. (3) The judgment is in any event excessive, in that it includes and embraces the then present worth of unmatured installments. Leon v. Barnsdall Zinc Co., 309 Mo. 276; Moore v. Security Trust & Ins. Co., 168 F. 496; Washington County v. Williams, 111 F. 801.

Ryland, Stinson, Mag & Thompson, Alfred M. Seddon and Frank O. Knight for respondents.

(1) The correct construction of the owners' language used in paragraph 4 of the proposal made to the bondholders and the representations made in connection therewith is, and the owners so intended, that if three thousand applications were received and accepted by the owners by July 1, 1922, and the building was completed for use as an Athletic Club, the owners would pay off the principal of the old bonds to the registered owners thereof who, by accepted applications, became members of the new club on or before July 1, 1922. Hoppock v. Gaines, 284 S.W. 194; 13 C. J., pp. 545, 546, sec. 516; Sanders v. Sheets, 287 S.W. 1071; Grossenbacher v. Daly, 287 S.W. 782; McManus v. Gregory, 16 Mo.App. 381; Belch v. Schott, 171 Mo.App. 362; Sandbrook v. Morrison Inv. Co., 209 Mo.App. 609; Buhler Mill & Elevator Co. v. Jolly, 217 Mo.App. 274. (2) The total membership requirements of paragraph 4 of the proposal were waived, (a) by the acts of the owners themselves, and (b) by the express terms and language of the guaranty agreement of July 1, 1922. St. Louis v. Wiggins Ferry Co., 88 Mo. 618; Mastin v. Grimes, 88 Mo. 485; Newman v. Merc. Trust Co., 189 Mo. 446; California Raisin Growers Assn. v. Abbott, 117 P. 770; Finlay v. Swirsky, 131 A. 425; Sanford v. Halsey, 2 Denio, 253; 2 Williston on Contracts, p. 1384, sec. 726; Crow v. Kaupp, 50 S.W.2d 997; St. Louis v. Wright Contr. Co., 202 Mo. 451; Bank v. Commission Co., 139 Mo.App. 110; Bank v. Leyser, 116 Mo. 51; Porter v. Woods, 138 Mo. 539; Crone v. Stinde, 156 Mo. 262. (3) The contract and agreement, evidenced by the proposal, between the owners on the one part and the applicant bondholders on the other part, is single and entire and is in no sense divisible or apportionable. St. Louis Union Trust Co. v. Van Raalte, 214 Mo.App. 172; Manhattan Life Ins. Co. v. Prussian Life Ins. Co., 296 F. 39; 6 R. C. L., p. 858, sec. 246; 13 C. J., p. 561, sec. 525, p. 563, sec. 528; 2 Williston on Contracts, p. 1647, sec. 861; Green v. Life Ins. Co., 159 Mo.App. 293; Obear-Nester Glass Co. v. Lax & Shaw, 11 F.2d 243; Traiman v. Rappaport, 41 F.2d 339.

OPINION

Hyde, C.

This is an action in seventy-nine counts to enforce a contract for the payment of certain bonds. Each count covered bonds of separate original ownership ranging in amounts from $ 100 to $ 5,000. Suit was brought by plaintiffs for their own bonds and as assignees of the bonds of seventy-seven others. The trial was before the court without a jury, which found for the plaintiffs. Judgment was entered for the total sum of $ 52,259.31 and defendant has appealed therefrom.

Plaintiffs claim that defendant is liable to pay the principal of the bonds sued for because of the following proposal, made by the organizers of the defendant corporation, to-wit:

"Proposal: To the Individual Members of the Kansas City Athletic Club and any other eligible persons who are desirous of having completed the steel frame structure designed for an Athletic Club Building, located at the Northwest Corner of Eleventh Street and Baltimore Avenue, Kansas City, Missouri, and desire to become members of the proposed Athletic Club hereinafter mentioned: Fred H. Fitch and Albert R. Jones, of Kansas City, Missouri (for themselves, or their corporate successor as owner of such building premises), hereinafter referred to as the Owners, make you the following proposal:

"(1) It is estimated that $ 2,200,000 will be required to complete, furnish and equip said structure as an athletic club building, and the owners have procured a loan of $ 1,600,000 therefor, leaving a balance of $ 600,000. The owners will themselves expend the amount required of such balance, provided 3,000 eligible persons shall, prior to July 1, 1922, be enrolled as resident members in the manner and each making the payments and accepted application hereinafter provided. Such payments, including the initiation fee, shall be used only to reimburse the owners for expenditures or liabilities so made or incurred. Except for possible additional stories and the omission of the bowling alley and grille on the Baltimore Avenue floor, the building will in such event be completed, finished and equipped by the owners with all reasonable expedition, substantially as originally planned by the Kansas City Athletic Club, and will be devoted to the purposes of the new Club and the use and enjoyment of its members. But the owners will use for other purposes the first or Baltimore Avenue floor and third floors and portions of the basement and second floors, and reserve the right so to use such other space in the building as will not interfere with the normal operation of the Club.

"(2) The full payment required of the first 3000 resident members before opening of the Club shall be $ 200 each, of which $ 10 shall be the initiation fee, and it, with the remaining $ 190, shall be employed to reimburse the owners for money expended or liabilities incurred in completing, furnishing and equipping the building. Such payment shall be made as follows: At least $ 25 with application and the remainder in installments thereafter of $ 25 each, payable on the first day of every calendar month, beginning August 1, 1922, until the entire amount is paid. The annual dues of such members shall be limited to $ 80 per year, payable quarterly in advance beginning on the day when the Club is formally opened. Resident members shall not be liable for any assessments whatever, but shall be obligated, after opening of the Club in the new building and during the continuance of their membership therein, for their dues and house accounts, together with revenue taxes thereon levied by any governmental authority. Persons residing in Greater Kansas City and the suburbs thereof shall be admitted to membership only as resident members.

"(3) The foregoing payments for which members shall be obligated before opening of the Club, shall be deposited with Edward F. Swinney, of Kansas City, Missouri, as Trustee, who shall issue receipts therefor and hold, use and disburse same in accordance with the provisions of the membership application form hereinafter set forth. Such receipts shall be promptly delivered to applicants for membership or members, upon the making of their respective payments.

"(4) The Kansas City Athletic Club, in its efforts to promote said club building, heretofore issued approximately $ 153,000 in second mortgage bonds which were sold largely to its members. To insure the earnest cooperation of the holders of these bonds, the owners agree that, if the requirements of this proposal as to total membership shall be complied with and the building is completed and used for a Club as herein contemplated, they will pay off the principal of such bonds, the present registered owners of which shall have become members of the new Club on or before July 1, 1922, without interest, in semi-annual installments, at the rate of 10% per year, distributed pro rata, beginning when the Club shall have been in operation in such building for two years.

(Paragraphs 5 to 8 inclusive are not material to this controversy.)

"(9) Each resident member of such Club shall sign an application in the following form:

"Kansas City, Mo., June, 1922.

"I hereby apply for resident membership in the Athletic Club to be located at the northwest corner of Eleventh Street and Baltimore Avenue, Kansas City, Missouri, upon the following conditions:

"(1) Fred H. Fitch and Albert R. Jones, or their corporate successors, upon the making on or before July 1, 1922, of 3000 applications of similar form for resident membership by persons residing in Greater Kansas City and the suburbs thereof, and the acceptance of such applications by them, shall proceed to complete and equip the steel frame structure at above location, substantially as originally planned by the present Kansas City Athletic Club, and shall organize, manage and maintain an Athletic Club therein.

"(2) All payments made by applicants for membership in such...