Union Nat. Bank of Kansas City v. Lyons

• Decision Date: 29 May 1909
• Citation: 220 Mo. 538,119 S.W. 540
• Parties: UNION NAT. BANK OF KANSAS CITY v. LYONS.
• Court: Missouri Supreme Court

119 S.W. 540

220 Mo. 538

UNION NAT. BANK OF KANSAS CITY v. LYONS.

Supreme Court of Missouri.

May 29, 1909.

1. MONEY LENT (§ 6) — PLEADING — CONSTRUCTION.

A petition alleging the execution of a note for money loaned, various renewals of the loan, and that defendant borrowed of plaintiff $10,000 on May 7, 1907, that no part had been paid, and that by reason of the premises defendant owed and was indebted to plaintiff in the sum of $10,000, etc., stated a cause of action for money lent, and not on the note.

2. PLEADING (§ 369) — DUAL CAUSES OF ACTION — ELECTION.

Where a petition stated in one count a cause of action on a note and another in assumpsit for money loaned, defendant by proper motion could compel plaintiff to elect on which of the two he would go to trial.

3. PLEADING (§ 406) — DUAL CAUSES OF ACTION — WAIVER.

Where plaintiff's petition stated two causes of action in a single count, and defendant made no motion to compel plaintiff to elect, defendant could not thereafter complain that plaintiff elected one of the causes of his own motion.

4. APPEAL AND ERROR (§ 193) — OBJECTIONS NOT RAISED AT TRIAL — DUAL CAUSES OF ACTION — ELECTION.

Defendant could not object for the first time on appeal that the petition alleged in a single count a cause of action on a note and another in assumpsit, the cause having been tried and judgment rendered on the latter theory.

5. PLEADING (§ 364) — GENERAL DENIAL — SPECIAL DEFENSES.

Where, in a suit against the receiver of a bank for money loaned, the answer contained a general denial, the court did not err in striking a special defense alleging that the board of directors of the borrowing bank did not authorize its cashier to borrow the money sued for nor to execute the note given therefor, which was provable under the general denial.

6. BANKS AND BANKING (§ 109) — AUTHORITY OF CASHIER — STATUTES — NOTICE.

Rev. St. 1899, § 1294 (Ann. St. 1906, p. 1054), provides that a bank's cashier shall have no power to indorse, sell, pledge, or hypothecate any notes, bonds, or other obligations received by the corporation for money loaned, unless authorized in writing by the bank's board of directors. Held, that such section was notice to the world of the limitation of the cashier's authority.

7. BANKS AND BANKING (§ 105) — AUTHORITY OF CASHIER — BORROWING MONEY — HYPOTHECATING SECURITIES.

Rev. St. 1899, § 1294 (Ann. St. 1906, p. 1054), providing that a bank's cashier shall have no power to indorse, sell, pledge, or hypothecate any notes, bonds, or other obligations received by the corporation for money loaned, unless authorized in writing by the bank's board of directors, did not prevent a bank's cashier from borrowing money for the bank's benefit in the ordinary course of business without any authority from the directors, though it did invalidate a pledge of the bank's securities without such authority as collateral security for the loan.

8. BANKS AND BANKING (§ 105) — AUTHORITY OF CASHIER — BORROWING MONEY — STATUTES.

Rev. St. 1899, § 1281 (Ann. St. 1906, p. 1048), providing that no bills payable shall be made and no bills shall be rediscounted by the officers of a bank without the consent of its board of directors, did not prevent a bank's officers from borrowing money on the bank's credit without the consent of the bank's board of directors, but only invalidated the note or other evidence of indebtedness given therefor.

9. MONEY LENT (§ 2) — VOID NOTE.

Where a bank had full power to borrow money, and its cashier did borrow $10,000 from plaintiff, which was deposited to the bank's credit and used in the payment of drafts drawn by it in the ordinary course of business, the fact that the note given as evidence of the indebtedness was unenforceable because executed by the cashier without written authority from the bank's board of directors as required by Rev. St. 1899, § 1281 (Ann. St. 1906, p. 1048), did not prevent plaintiff from recovering the amount so loaned in an action for money received.

10. BANKS AND BANKING (§ 80) — INSOLVENCY — PRIORITY OF CLAIMS.

Where plaintiff had a claim against an insolvent bank for money received, he had no priority over other creditors, but was entitled to share equally with them in the distribution of the assets.

Graves, J., dissenting.

In Banc. Appeal from Circuit Court, Cooper County; Wm. H. Martin, Judge.

Action by the Union National Bank of Kansas City against Charles Lyons, receiver of the Middleton Bank. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

The following is the opinion in division of Judge WOODSON:

"This suit was instituted by plaintiff in the circuit court of Lafayette county, against the defendant, to recover the sum of $10,000 loaned by it to defendant. The trial resulted in a verdict and judgment for plaintiff for the sum of $10,560, principal and interest. The circuit court having refused a new trial, the defendant duly appealed the cause to this court.

"Formal matters omitted, the petition on which the cause was tried was as follows:

"`For its amended petition herein, the above-named plaintiff alleges that it is now, and at all the dates hereinafter mentioned was, a national banking corporation, organized and existing under and by virtue of the laws of the United States, and engaged in the general banking business in Kansas City, Mo. That said Middleton Bank is now, and at all the times hereinafter mentioned was, a banking corporation organized and existing under and by virtue of the laws of the state of Missouri, and, until the appointment of the receiver as hereinafter set forth, engaged in a general banking business at Waverly, Mo. That on the 6th day of May, 1905, defendant, Charles Lyons, was by the circuit court of Lafayette county duly appointed receiver of and for said Middleton Bank to take possession of its property and assets and for the purpose of winding up the business thereof, and is now in possession of said property and assets as such receiver for that purpose. That by order of said circuit court of Lafayette county made on the 22d day of June, 1905, this plaintiff was given permission to institute and prosecute this suit.

"`Plaintiff further states that on the 7th day of May, 1904, said Middleton Bank borrowed of plaintiff $10,000, which sum was loaned by plaintiff to said Middleton Bank, and thereupon said Middleton Bank executed and delivered to plaintiff its promissory note, dated May 7, 1904, whereby it promised, for value received, to pay to plaintiff or order said sum of $10,000, 120 days after date, with interest thereon from maturity at the rate of 8 per cent. per annum. That upon the maturity of said note said Middleton Bank, in renewal thereof, executed and delivered to plaintiff another promissory note, dated September 6, 1904, whereby it promised, for value received, to pay to plaintiff or order said sum of $10,000, 120 days after date, with interest thereon from maturity at the rate of 8 per cent., per annum; and thereupon plaintiff canceled and delivered up to said Middleton Bank the note first above mentioned. That upon the maturity of said note, dated September 6, 1904, said Middleton Bank, in renewal thereof, executed and delivered to plaintiff another promissory note, dated January 9, 1905, whereby it promised, for value received, to pay to plaintiff or order said sum of $10,000, 120 days after date, with interest thereon from maturity at the rate of 8 per cent. per annum, a duly verified copy of which last-mentioned note is hereto attached and herewith filed, marked "Exhibit A."

"`Plaintiff further says that no part of said sum of $10,000 so borrowed as aforesaid, and no part of said note, has ever been paid, and by reason of the premises said Middleton Bank now owes and stands indebted to plaintiff in the sum of $10,000, together with interest thereon from May 12, 1905, at the rate of 8 per cent. per annum; for which sum and for costs plaintiff prays judgment.'

"The answer was as follows:

"`The defendant, for answer to the amended petition of plaintiff, admits that plaintiff was and is a national banking corporation under the laws of the United States and engaged in banking at Kansas City, Mo.; admits that the Middleton Bank was, at the times mentioned, a banking organization organized under and by virtue of the laws of the state of Missouri, and until the appointment of the receiver was engaged in the general banking business at Waverly, Mo.; admits that on May 6, 1905, defendant, Charles Lyons, was duly appointed receiver for said Middleton Bank by the circuit court of Lafayette county, Mo., and is now in the possession of the property and assets of said bank as such receiver; admits that by order of said circuit court of Lafayette county, Mo., made on the 22d of June, 1905, plaintiff was given permission to institute and prosecute this suit; and denies each and every other allegation of said amended petition.

"`(Defendant further alleges that said Middleton Bank by its board of directors, or otherwise, did not at a regular meeting of said board of directors, by a written record first made, authorize any of its officers to borrow the said sum of $10,000, or any other amount, on behalf of said bank, or by its said board of directors, at a regular meeting, by a written record or otherwise, authorize any renewal of said alleged note), and now, having fully answered, asks to be hence discharged with his costs.'

"Plaintiff filed motion to strike out the last paragraph of the answer, which alleged that the board of directors of the Middleton Bank did not authorize its officers to borrow the money sued for, or to execute the note mentioned in the pleadings. This motion was by the court sustained, and defendant duly excepted.

"The facts are few and practically undisputed, and are as follows: E. H. Lewis was cashier of the Middleton Bank (which will hereafter be called the defendant or appellant) from 1899 to the time of its failure....