Taylor v. Farmers Bank of Chariton County

• Decision Date: 29 January 1940
• Docket Number: No. 19505.,19505.
• Parties: TAYLOR v. FARMERS BANK OF CHARITON COUNTY et al.
• Court: Missouri Court of Appeals

135 S.W.2d 1108

TAYLOR v. FARMERS BANK OF CHARITON COUNTY et al.

No. 19505.

Kansas City Court of Appeals. Missouri.

January 29, 1940.

Appeal from Circuit Court, Howard County; A. R. Hammett, Judge.

"Not to be published in State Reports."

Action by John D. Taylor against the Farmers Bank of Chariton County, Missouri, and others to recover a sum of money together with interest thereon. There was a verdict for defendants, and from an order granting a new trial, defendants appeal.

Judgment affirmed and case certified to the Supreme Court.

Jerome Walsh, of Kansas City, Louis E. Merrill, of Brunswick, Lionel Davis, of Fayette, and Roy W. Rucker, of Kansas City, for appellants.

R. M. Bagby, of Fayette, J. A. Collet, of Salisbury, and John D. Taylor, of Keytesville, for respondent.

SPERRY, Commissioner.

Plaintiff sued defendant, a defunct banking corporation, for a sum of money, together with interest thereon, alleged to have been furnished to defendant for the purpose of reducing an excessive loan held by defendant. A jury trial resulted in a verdict for defendant, but upon motion, a new trial was granted. Defendant appeals from the order granting new trial. We shall refer to the parties as plaintiff and defendant.

On June 25, 1927, defendant was a banking corporation, doing a general banking business in Chariton County. Plaintiff was president of defendant's board of directors. Defendant owned a note, signed by John Welch and his daughter, Edith Clavin, in the sum of $22,134.70. This note was secured by deed of trust covering 440 acres of land owned by the signors of the note. Plaintiff, E. A. Carter, A. W. Zillman and C. H. Brandt, all being members of defendant's board of directors, each paid over to defendant the sum of $2,927.50, or a total of $11,710, which, with other bank funds, was used by defendant to reduce the Welch-Clavin indebtedness to the sum of $10,000. As a part of the transaction Clavin deeded her interest in the land to Welch who executed a note payable to defendant, in the sum of $10,000, and secured same with a deed of trust on said land. Welch, then, on the same date, June 25, 1927, deeded the land, subject to the above encumbrance, to E. A. Carter. Thereafter, on June 25, 1927, Carter executed a declaration of trust wherein it is recited that he had that day received a deed to the Welch land, and:

"That while the record title to said land is vested in me absolutely, I hereby declare that I hold said title for myself, A. W. Zillman, Henry Brandt and John D. Taylor; that we jointly own the same in equal shares and I agree to convey said land at any time that the said parties or any two of them may direct me. I further declare that I have this day executed and delivered to the Cashier of the Farmers Bank of Chariton County my deed in blank conveying said land and I authorize the Cashier of said bank at any time to insert the name of any one of the above named persons, or of any person that they, the above named persons, may direct, and deliver the said deed upon the terms and conditions to be designated by the said Zillman, Brandt and Taylor and myself, if living.

                              "(Signed) E. A. Carter."
                

The above instruments were each executed with the full knowledge and consent of plaintiff and his three associates above named, as well as with that of H. C. Miller, cashier, and A. F. Taylor, assistant cashier of defendant, all of said parties being stock-holders and officers and directors of defendant, and owning a majority of its stock.

The deed mentioned in the above declaration of trust was duly deposited with defendant. Defendant immediately opened a special account, known as John Welch suspense account, in which all income from the Welch land was deposited and from which all expenses were paid. The first items recorded in said account are those representing the payment of the sums above mentioned by plaintiff and his associates. Some 40 acres of the land was sold and defendant received the entire proceeds thereof. Neither plaintiff nor any of his associates ever received anything from this account, or from the Welch land, or the income therefrom.

The reason that plaintiff and his associates advanced money and reduced the Welch loan as aforesaid was because Welch had no assets other than the land, and the banking department, as well as the board of directors of defendant, considered the loan excessive. In addition to the above-mentioned indebtedness of Welch, he also owed other mortgages, which were liens against the land and had priority over defendant's mortgage. These other indebtednesses aggregating some $4,440, were, at about the time of the above transaction, paid off and discharged out of the undivided profits account of the bank.

The land was, at no time herein mentioned, worth more than the $10,000, mortgage held by the bank. On August 18, 1931, Brandt and Carter sought a settlement with defendant and at that time, defendant not being in financial condition to pay to plaintiff and associates the sums advanced by them, a written contract was entered into, same being signed by plaintiff and his associates and also by H. C. Miller, cashier, and A. F. Taylor, assistant cashier, all being stockholders and owning a majority of the stock of defendant, whereby it was agreed that the Welch land had been conveyed to Carter to be held by him for the bank; that it was to have been sold, when possible, and plaintiff and his associates were to have been reimbursed for sums furnished by them; that such arrangement was to continue from the date of the contract forward until the land could be sold; that when it should be sold, and if any of the parties should suffer any loss because of the payment by them of sums heretofore mentioned, and if the then board of directors of defendant should fail or refuse to reimburse them out of other funds of defendant, "that the matter shall be submitted to the stockholders of the said bank for their action at a stockholders' meeting, and we jointly, and severally, pledge ourselves that we will cast our vote according to our stock in said bank in favor of reimbursing the said parties for any loss that they shall sustain." The instrument was signed by the parties above mentioned.

No record of any of the above transactions was ever made on the books of defendant. The sum sued for in this action was not listed on any of the books of the bank as an obligation of the bank. It was not reflected, as an obligation, in any financial statements made and published by defendant pursuant to law and regulations of the State Finance Department. In a letter written to plaintiff by the State Finance Department, dated April 19, 1933, it was stated that "The loan of John Welch, is in reality `other real estate' and it should be set up on your books under the proper account." Plaintiff replied by reciting the transaction of June 25, 1927, stating that the property was held by Carter under a declaration of trust wherein he declared he held title for the benefit of himself and associates.

Plaintiff also testified that he personally visited the commissioner of finance and told him the facts about the entire transaction, and that he thereafter received no further complaint about the matter.

Defendant suspended business and its board of directors placed its assets and affairs in the hands of the State Finance Department on December 5, 1935.

Defendant contends that this action is one on an express contract and should be so considered. The same contention was made in Carter v. Farmers Bank of Chariton County, Missouri et al., 232 Mo. App. 705, 108 S.W.2d 152, a companion case, decided by this court. In that case the petition, as well as the evidence, was very similar to the petition and the evidence in the instant case. We there held that the cause of action pleaded and proved was one for money received. The Supreme Court thereafter denied certiorari. We see no legal excuse for re-opening the question.

It is next claimed that if the suit is one governed by the law relating to actions for money received, the action is barred by the statute of limitations. This defense was not pleaded, and was not before us, in the Carter case, supra, but is pleaded and relied on here.

This action was brought July 9, 1936. The money was furnished June 25, 1927. All of the evidence on the subject of when the money was to be repaid was to the effect that it was to be at some indefinite, future time, upon the happening of a certain event, to-wit, when the land should be sold, which event did not happen. Nor was there any evidence tending to show that any demand was ever made for its payment, unless it be that the transaction of August 18, 1931, constituted such evidence. Such being the facts, the statute of limitations does not bar this action. While the debt accrued when the money was paid, the right to sue did not accrue until the right to demand payment arose. Cruse v. Eslinger, Mo.App., 235 S.W. 496, loc. cit. 498; Givens v. Rogers, 192 Mo. App. 319, 182 S.W. 115, and cases there cited. In the absence of pleading or proof of the accrual of the action more than five years prior to the filing of the suit, the statute of limitations does not bar the action.

The defense of estoppel is also pleaded and is relied on here. This defense is based on the following evidence; that plaintiff and his associates furnished the finance department with sworn statements purporting to state the true financial condition of the bank and that such statements failed to mention the debt sued for as an obligation of defendant; and that plaintiff wrote the Commissioner of Finance and explained the Welch transaction to him and failed to inform him in said letter that the bank owed plaintiff and his associates any money on account of the Welch loan. It is urged that the Commissioner of Finance relied upon such financial statements and the letter, and upon the facts as therein stated; that by reason thereof...