St. Charles Savings Bank v. Thompson , 284 Mo. 72 ( 1920 )

In a suit on a demand note and contract brought in the Circuit Court of St. Louis there was a judgment for the defendant and plaintiff appealed. The note and contract are as follows:

"$20,000.00. St. Charles, Mo., January 2, 1901.

"On demand I promise to pay to the order of the St. Charles Savings Bank twenty thousand dollars for value received, at the St. Charles Savings Bank, with interest from maturity at the rate of 8 per cent per annum.

"J.W. THOMPSON. "St. Charles, Mo., January 2, 1901.

"Whereas, the undersigned executed and delivered to the St. Charles Savings Bank the above promissory note for the sum of twenty thousand dollars; now in order to secure the payment of said note and interest and of all indebtedness of the undersigned to the St. Charles Savings Bank, at present existing or as it may arise, from time to time, and in consideration of the premises and of an extension of time having been given by said bank to the undersigned by a renewal of the original indebtedness, as evidence by the aforesaid note, the undersigned has assigned and by virtue of said assignment hereby pledges and delivers to said St. Charles Savings Bank the following life insurance policy owned by the undersigned in good faith free from liens or claims of any kind whatever, to-wit: (Policy No. 780494, issued by the Mutual Life Insurance Company of New York on my life July 2, 1896, for the sum of twenty thousand dollars for the term of my life. This assignment is made with the express understanding that the above note is executed by me as collateral security not only for my own note and indebtedness to the St. Charles Savings Bank, but also as collateral security for the note and indebtedness of the Thompson Gray Quarry Company to said bank and for any renewal of any or both of said two notes).

"And the undersigned hereby promises to pay all premiums and charges hereafter due on said policy of insurance and in case of any failure to do so, expressly authorizes said St. Charles Savings Bank to pay the same, and all such sums so paid hereafter by said St. Charles Savings Bank shall form and constitute a lien on the money insured by said policy and be considered a part of the indebtedness by the undersigned to said bank; and the undersigned hereby authorizes and empowers the St. Charles Savings Bank to collect and receipt for the amount of the said policy in the name of the undersigned and also to do and perform all acts necessary for the collection of said insurance money. In case of the non-payment of the above note when the same becomes due, the St. Charles Savings Bank is also hereby authorized and empowered to change and convert said life insurance policy into a paid-up or non-assessable policy, or to surrender said policy to the company which has issued the same for such sum as said bank may deem proper, the undersigned hereby ratifying and confirming all acts the St. Charles Savings Bank may do and perform in the premises.

"When at the death of the insured or at the time said policy becomes due and payable, the above note, or any part, or any renewal thereof, shall still remain due or unpaid, then said St. Charles Savings Bank shall apply the sum so paid on said policy, first, to the payment of all premiums and charges paid by it on said policy, and the cost for the collection of said policy of insurance, including attorneys' fees, if any; second, to the payment of the above note; and, third, to all other indebtedness of the undersigned to said bank, including protests and damages for the non-payment of such debt, and any balance remaining shall be paid to the executor or administrator of the undersigned or to the beneficiary, if any, named in said policy, according to the terms thereof.

"Witness my hand and seal this the day and year aforesaid.

"J.W. THOMPSON."

The plaintiff, St. Charles Savings Bank, is a banking corporation located and engaged in business in the City of St. Charles.

On June 29, 1900, the Thompson Gray Quarry Company, a corporation, of which the defendant was president and principal stockholder, was indebted to plaintiff bank in the sum of $22,000, and at the same time the defendant was individually indebted to the plaintiff in the sum of $21,500. On that day the Thompson Gray Quarry Company executed and delivered to plaintiff its note for $22,000 dated June 29, 1900, payable to the order of the plaintiff six months after the date thereof, with six per cent interest from date, and the defendant at the same time executed and delivered to plaintiff his individual note for the sum of $21,500, dated June 29, 1900, payable to the order of the plaintiff six months after date, with six per cent interest from date.

These two notes became due and payable January 2, 1901, and defendant and the Thompson Gray Quarry Company desired to secure from the plaintiff an extension of time for the payment of the indebtedness represented by said notes, and in order to do so the defendant executed and delivered to the plaintiff the collateral note and contract upon which the present action is based, and the plaintiff in consideration of said note and contract granted an extension of time for the payment of the Thompson Gray Quarry Company note and the Thompson individual note. Under this arrangement these two notes were renewed from time to time. The Thompson individual note was renewed until the indebtedness it represented was paid off about February 24, 1903. The Quarry Company note was renewed from time to time, the last renewal being made June 19, 1905, for a term of six months; this renewal fell due December 19, 1905. The Quarry Company failed to pay said note or any part of the same, and the plaintiff refused to grant any further extension for the payment of the indebtedness represented by the Quarry Company notes. This note of the Quarry Company with the accumulated interest thereon has never been paid, and is still due the plaintiff.

The Quarry Company having failed to pay its indebtedness of $22,000, the plaintiff on September 24, 1906, made formal demand on the defendant for the payment of the $20,000 evidenced by the note of January 2, 1901, under the terms of the contract attached thereto. Upon the defendant's failure to pay this demand, the plaintiff, on December 18, 1906, commenced suit in the Circuit Court of the City of St. Louis against the defendant to enforce the payment of the $20,000 collateral note together with eight per cent interest thereon from date of demand.

The petition, instead of pleading the collateral note and contract as a conditional obligation, counted upon it as an unconditional note for the payment of money. Filed with the petition was a copy of the note only, the contract that had theretofore been attached to it being omitted. At the time of the commencement of the suit of December 18, 1906, and thereafter, the collateral note and contract in suit in the present action was the only note or obligation held by the plaintiff against the defendant.

The defendant appeared and filed an answer and cross-bill, in which, after denying the execution of the note as described in the petition, averred the execution and delivery to the plaintiff of the collateral note and contract in question, but stated that it was not given or intended to secure the payment of the Quarry Company note, but as collateral to secure the payment of defendant's individual debt to the bank, which debt he had subsequently paid. A reply was filed to the answer and cross-bill.

On March 20, 1912, the suit of December 18, 1906, was referred to a referee to try the issues. The matter came on for hearing, and plaintiff offered in evidence the collateral note and contract, and the defendant objected to its admission on the ground that it was not the obligation counted upon in the petition, and upon the referee holding the objection well taken the offer was withdrawn, the hearing before the referee was postponed, and plaintiff, on September 12, 1912, filed an amended petition, in which the plaintiff counted upon and filed therewith a verified copy of the collateral note and contract now in suit. On the same day the defendant filed a motion to strike the amended petition from the files and to abate the suit. On December 3, 1912, the court sustained said motion on the third and fourth grounds therein set forth, which are as follows:

"Third. Because the amended petition is an abandonment of the original petition and attempts to substitute a new and totally different cause of action for the cause of action originally sued on, and it is in no sense an amendment of the cause of action sued on, and the court has no power or jurisdiction to permit the same to be done.

"Fourth. Because the amended petition operates to discontinue the original action, and the cause of action stated in the amended petition could only be enforced by a new independent action."

On March 11, 1913, the plaintiff instituted a second suit against the defendant upon the same collateral note and contract. Defendant filed a demurrer to this petition, and on November 10, 1913, the plaintiff filed an amended petition, to which the defendant demurred. The grounds of the demurrer were: (1) The amended petition stated no cause of action. (2) That any right of action upon the collateral obligation set forth in said petition was barred by the Statute of Limitations. The court sustained the demurrer.

Leave was given the plaintiff to plead further, which was extended from time to time. Plaintiff, however, filed no further pleading, but, before the expiration of the time it had been given to plead, it took a voluntary nonsuit.

The plaintiff, on the 3rd day of March, 1914, by leave of court, filed a second amended petition, counting upon the collateral note and contract now in suit. The defendant filed a motion to strike said petition from the files. Before this motion had been submitted to or acted upon by the court the plaintiff took a voluntary nonsuit.

On May 15, 1914, plaintiff brought a suit based on the same cause of action as those above set forth. The petition therein was identical in all of its material features with that filed March 11, 1913, except the added allegation "that in the original suit begun December 18, 1906, it took a voluntary nonsuit on April 30, 1914, and that said suit was for the same cause of action here sued on and that this action was instituted within one year from the date of said nonsuit suffered and that the suit instituted March 11, 1913, was upon the same contract and for the same cause of action here sued on and that plaintiff suffered a voluntary nonsuit in said action May 14, 1914, and brought this suit within one year thereafter."

To this petition defendant filed an answer and cross-bill, which, after a general denial, set up a number of special defenses, among others that the matter sued on had been adjudicated and determined in a former proceeding and that the cause of action was barred by the Statute of Limitations. After a hearing the court held that the matter had been adjudicated, and that any cause of action which had existed in plaintiff's favor on the collateral note and contract was barred by the ten-year Statute of Limitations. Thus holding, the court declined to try the remaining issues and entered judgment for the defendant. The plaintiff thereupon perfected its appeal to this court. The issues for review are:

First, whether, under the facts, the matter in suit was a thing adjudicated in a prior suit between the same parties?

Second, whether, under the facts, the plaintiff's cause of action on the collateral note and contract in suit was barred by the ten-year Statute of Limitations?

The note for $20,000 with the contract attached was, for some unaccountable reason, detached from the latter, and suit was brought thereon freed from any of the explanatory purposes or reasons for its execution defined in the contract. The suit as presented by the pleadings was simply upon a demand note. The subject-matter, therefore, of this action was the note, and the evidence necessary to establish the defendant's liability thereon was such as is required in ordinary actions of this character: for example, if there had been no denial of the execution, by simply introducing the note in evidence and resting. A different aspect is given to the proceeding in the amendment sought to be made to the original petition in that it is alleged that the note was given to secure the payment of other notes. The subject-matter, therefore, of this action was the contract, and entirely different evidence was necessary to sustain it than that required under the original pleading. The subject-matter of the original and the amended petitions not being the same, and different evidence being required to support each, the second petition was not an amendment but the statement of a different cause of action. [Broyles v. Eversmeyer, 262 Mo. l.c. 389; McHugh v. Transit Co., 190 Mo. 85; Ross v. Mineral Land Co., 162 Mo. l.c. 329; Liese v. Meyer, 143 Mo. 547; Scoville v. Glasner, 79 Mo. 449; Heman v. Glann, 129 Mo. 325.] Thus construed, the alleged amendment did not serve to toll the statute, which had begun to run from the date of the collateral note and contract, but marked the commencement of a new proceeding. [Warder v. Henry, 117 Mo. l.c. 541.] The statutory period of ten years applicable in cases of this character had then passed. [Sec. 1888, R.S. 1909; Gross v. Watts, 206 Mo. l.c. 397; Carr v. Thompson, 67 Mo. 472; Howe v. Mittleberg,96 Mo. App. 492.]

If a disposition of the other questions were not deemed necessary this would suffice to determine this case adversely to the plaintiff. However, upon the trial court sustaining defendant's motion to strike the amended petition from the files, the plaintiff abandoned the suit by refusing to plead further; and on March 11, 1913, brought a second suit identical in all of its issuable facts to that embodied in the so-called amended petition filed in the original action. The trial court sustained a demurrer to this petition for the reasons set forth in the statement, and plaintiff abandoned the same by refusing to plead further, and on May 14, 1914, took a voluntary nonsuit and instituted the action at bar on the succeeding day. The subject-matter of this suit was the note and the collateral contract, which had formed the basis for each of the preceding suits except the original action. It follows that if the action was barred at the time of the abandonment by the plaintiff of the original action and the bringing of a new suit, the cause of action pleaded in the instant case is likewise barred, the latter having been brought more than a year subsequent to the abandonment by the plaintiff of the original suit, or more than thirteen years after a right of action accrued on the collateral note and contract.

But it is contended that the action at bar comes within the saving clause of the nonsuit statute (Sec. 1900, R.S. 1909) which provides, in effect, so far as relevant here, that if a plaintiff suffer a nonsuit, he may from time to time bring a new action within one year after such nonsuit suffered, etc. Under the facts at bar the one-year saving clause provided in the above statute is inapplicable. Plaintiff filed the alleged amendment, which constituted in effect the bringing of a new suit, while the original action was pending. A dismissal of the first suit is a prerequisite to the right to bring the new suit authorized by the statute. [Land Co. v. Quinn, 172 Mo. 584; Wood v. Nortman,85 Mo. 298; Briant v. Fudge, 63 Mo. 489.]

Furthermore, in order that a subsequent suit may operate to relieve the plaintiff from the bar of the above statute it must embody the issues set forth in the original action; in other words, it must involve the same subject-matter and require the same evidence to sustain it. These tests are as essential to the application of the statute as they are in determining whether a pleading is an amendment or a departure. We meant nothing more than this when we said, in Norton v. Reed, 253 Mo. l.c. 255, that "it is only necessary that it should involve an identical claim against which the old suit would have stopped the running of the statute had it been prosecuted successfully to final judgment." The evident purpose of this statute was to extend for a year the plaintiff's right to bring the same action as theretofore instituted and in which nonsuit had been suffered and which otherwise would be barred by the general Statute of Limitations. [Karnes v. Ins. Co., 144 Mo. 413; Long v. Long, 141 Mo. 352.]

As affecting the contention as to the time when the Statute of Limitations begins to run in a case of this character, it will be sufficient to say that it has been long established in this jurisdiction that the operative effect of the statute begins from the date of the instrument and not from the date of the demand for its payment. [Easton v. McAllister, 1 Mo. 662; Collins v. Warburton, 3 Mo. 203; O'Fallon v. Kerr, 10 Mo. 554.] The reason for this ruling is that a note of this character is due at once and no demand is necessary, the suit being in the nature of a demand. [White's Bank v. Wand, 35 Barb. 637; Fell's Point Savings Institution v. Weedon, 18 Md. 320.]

The running of the statute is not interfered with by a failure to make a demand. If the rule were otherwise the holder could by his own act postpone the running of the statute. [Steele's Admr. v. Steele, 25 Pa. 156; Pittsburgh Railroad Co. v. Byers,32 Pa. 24; Todd's Appeal, 24 Pa. 431; Morrison v. Mullin, 34 Pa. 12.]

The deposit of collateral with the note will not affect the Statute of Limitations, which will begin to run from the date of the note. [In re Hartranft Estate, 153 Pa. 530.] Whether the instrument upon which this action is based be regarded as a demand note with a contract attached or a collateral obligation, it is nevertheless barred under the ten year Statute of Limitations, Section 1888, Revised Statutes 1909. [State ex rel. v. Brown, 208 Mo. 613.]

We find a marked difference between the facts presented by the cases cited by counsel for plaintiff and those at bar, so much so that they do not lend support to the contention that the trial court erred in its ruling in this case. Its judgment, therefore, is affirmed. All concur.