Webb v. Cope
| Decision Date | 20 February 1917 |
| Docket Number | No. 18263.,18263. |
| Parties | WEBB et al. v. COPE. |
| Court | Missouri Supreme Court |
Appeal from Circuit Court, Howell County; W. N. Evans, Judge.
Suit for injunction by F. W. Webb and others against J. J. Cope. Suit dismissed, and plaintiffs appeal. Reversed and remanded, and decree for plaintiffs directed.
Plaintiffs commenced this action by injunction, in the circuit court of Dent county, Mo., on December 2, 1912, to cancel a $28,000 note, held by defendant, purporting to bear date of December 15, 1911, payable to J. J. Cope or order, due one year after date, alleged to be for value received, with interest from date at the rate of 8 per cent. per annum, payable at Salem, Mo., signed by E. E. Young as principal, and upon which appear the names of plaintiffs herein, as follows:
"I hereby guarantee $5,000 of the above note
"F. W. Webb
"I hereby guarantee $5,000 of the above note
"E. W. Walker
"I hereby guarantee $1,000 of the above note
"B. H. Rucker.
"I hereby guarantee $5,000 of the above note.
"J. Ellis Walker.
"I hereby guarantee $1,000 of the above note.
"E. C. Comstock.
"I hereby guarantee $1,000 of the above note.
"E. C. Halbert.
"I hereby guarantee $1,000 of the above note.
"J. A. Frank.
"I hereby guarantee $500 of the above note.
"H. A. Frank.
"I hereby guarantee $1,000 of the above note.
"Carl Kimmel.
"I hereby guarantee $500 of the above note.
"Wm. Romstead.
"I hereby guarantee $5,000 of the above note.
"Gilbert Lay.
"I hereby guarantee $1,000 of the above note.
"J. J. Crites.
"I hereby guarantee $1,000 of the above note.
"T. J. Graham"
— and to restrain said defendant from suing upon said note for the reasons assigned in the amended petition, etc. The answer, after making certain admissions, denied every other allegation in the petition, and pleaded facts tending to show that defendant acquired said note in good faith, believing at the time it was a bona fide negotiable instrument, executed by said Young and delivered to him, and that he had no knowledge or information of any infirmity or defect in said note. Defendant pleaded a counterclaim, but, as it was withdrawn, we need not consider the same. The venue was changed, and the cause tried in Howell county, Mo.
It appears from the evidence that the Missouri, Arkansas & Gulf Railroad Company was chartered under the laws of Missouri to build a railroad southwest from Rolla to a connection with the Kansas City, Ft. Scott & Memphis Railroad. Appellants, at one time or another, became small stockholders in the former road and may have owned some bonds of same. Some of appellants were likewise officers of said company. E. E. Young was awarded the contract for constructing said road. In the fall of 1911, he was in need of funds to build the road, and appellants concluded to borrow $50,000 to complete it from Rolla to Lecoma, in Dent county, Mo., a distance of about 14 miles.
Young prepared, or caused to be prepared, a typewritten copy of a blank promissory note, dated December 5, 1911, with blank guaranties printed thereon, wherein each guarantor was expected to fill in that portion of the principal sum for which he was to become responsible, and to sign the same. It was understood between the parties that $50,000 was to be raised for above purpose. A contract was attached to said note, dated December 5, 1911, which, among other things, provided that the note, when sufficient guarantors had signed same, should be returned to the National Bank of Rolla, Mo.; that the cashier of said bank should fill out the note, get the money on same, deposit the proceeds thereon in said bank to the credit of said railroad company, and that none of said money should be drawn from the bank except by check of F. W. Webb, treasurer, upon an order of the board of directors, etc. Provision was also made for indemnifying said guarantors, etc.
Appellant Webb executed one of the blank guaranties for $5,000, and delivered said note, with the contract attached thereto, to E. E. Young, who was to obtain the necessary signatures of guarantors and return said note and contract to the National Bank of Rolla aforesaid. Young signed said contract, and presented the note for the signatures of nearly all the plaintiffs whose names appear as guarantors on the $28,000 note aforesaid. The weight of the evidence tends to show that the date of the note was changed from December 5, 1911, to December 15, 1911, after it was signed by appellants and without their consent.
Defendant testified that about the last of February or the 1st of March, 1912, Young brought the $28,000 note, filled out as it is now, to his office in Salem, Mo.; that this was the first time he ever saw the note; that he went over the above note with Young until he came to Comstock's name. He told Young he could not take Comstock for $1,000, because the latter beat a good man once out of $3,000; that Lay was of good family, but he could not take him for $5,000; that Young then took the $28,000 note away with him to get other indorsers; that Young wanted more money, and was to deliver him the above note in January, 1912, but failed to do so; that he advanced Young $7,200, on the promise of Young that he would deliver to him the $28,000 note; that when he obtained the above note from Young in St. Louis, on April 27, 1912, he did not deliver to Young a thing on earth; that Young assigned to him two policies of life insurance for $10,000 each; and gave him a mortgage on certain property; that he still has the above policies and mortgage; that he mailed to Young all the notes which he held, except the one for $28,000 and $4,000.
Defendant claims to be the owner of said $28,000 note as a holder for value without notice of infirmity or defect in the note. On the other hand, it is insisted by appellants that Young parted with said note illegally, wrongfully, and without authority; that defendant is not an innocent holder for value; that he gave the plaintiffs no notice that he was in possession of said note or claimed to be the owner of same; that he took said note in bad faith, without consideration, and with notice of foregoing infirmities, etc.
The trial court found the issues for defendant and dismissed plaintiffs' bill. Such other facts as may be necessary will be considered in the opinion. The motion for a new trial, filed by appellants, was overruled, and the cause duly appealed by them to this court.
C. C. Bland and Frank H. Farris, both of Rolla, and Harry Clymer, of Steelville, for appellants. William P. Elmer, of Salem, J. D. Gustin, of Kansas City, G. E. Monegan, of St. Louis, and Lorts & Breuer, of Rolla, for respondent.
RAILEY, C. (after stating the facts as above).
I. Respondent insists that plaintiffs have no right to maintain this action jointly. If there was an improper joinder of parties plaintiff, it was manifest upon the face of the petition, and if defendant desired to raise the question as to their legal right to join in the same action, he should have challenged the petition by demurrer. Having failed to do so, he has waived his right to insist upon this question before us. He, however, sustained no injury by having the validity of the note determined as to all the parties in a single action. Aside from the respective amounts guaranteed by the parties, they were all affected alike, and rely upon a common defense to defeat a recovery upon said note. By resorting to equity it prevented a multiplicity of suits, afforded the parties an opportunity to determine the validity of said note in this action, and prevented the defendant from negotiating the note to a holder for value, who could occupy a more advantageous position, with respect to the facts, than defendant. There is no merit in this contention, and the same is disallowed.
In Tucker v. Wadlow, 184 S. W. loc. cit. 71, in discussing this subject, we said:
"In order, therefore, to avoid a multiplicity of suits, and accomplish the same purpose in a single action, the modern rules of equity jurisprudence authorize the plaintiff in his own behalf, and in behalf of all others similarly interested, to maintain this kind of an action."
A number of authorities are cited in support of above rule, and to the same effect, are the following: 1 Pomeroy's Eq. Jur. (2d Ed.) § 269, page 367; Railroad Co. v. Garrison, 81 Miss. 257, 32 South. 996, 95 Am. St. Rep. 469; Southern Steel Co. v. Hopkins et al., 157 Ala. 175, 47 South. 274, 20 L. R. A. (N. S.) 848, 131 Am. St. Rep. 20, 16 Ann. Cas. 690; Hale v. Allinson, 188 U. S. 56, 23 Sup. Ct. 244, 47 L. Ed. 380.
II. It appears from the undisputed evidence that the contract heretofore mentioned was fastened to the blank note by brads running through both instruments, when signed by...
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