author: MARSHALL, J.

text:
    CRAMER, Appellant, v. BARMON.
    Division One,
    February 22, 1906.
    APPELLATE JURISDICTION: Two Counts: Verdict On Both: Final Judgment: Verdict as Entirety. The first count of the petition asked for $5,000 for false imprisonment, and th© second prayed damages for malicious prosecution. The court directed a verdict for defendant on the first, and submitted the second for the jury’s determination, and they returned a verdict for defendant on the first, and for plaintiff for $1,500 on the second. The plaintiff moved for a new trial on the first count, and defendant for a new trial on the second, and the court overruled plaintiff’s motion, but sustained defendant’s, and plaintiff appealed. Held, that the setting aside of the verdict in favor of the plaintiff on the second count did not destroy the whole verdict and did not have the effect of setting aside the verdict in favor of the defendant on the first count; and as there can be only one final judgment in a cause, however many counts the petition may contain, and as there was no legal final judgment in favor of defendant on the first count, and cannot be until the second count is determined, the ruling of the court in respect to the first count is not now for consideration on appeal, and hence the Supreme Court has no jurisdiction of the appeal.
    Appeal from Jackson Circuit Court. — Row. Andrew F. Evans, Judge.
    Transferred to Kansas City Court of Appeals.

      Leon Bloch and Frcmh P. Sebree for appellant.

      I. J. Ringolshy for respondent.
   MARSHALL, J.

— This is an action for damages. The petition is in two counts; the first for false imprisonment, and the second for malicious prosecution.

The court directed the jury to find.a verdict for the defendant on the first count and submitted the second count to their determination. Pursuant to the instruction, the jury returned a verdict for the defendant on the first count and found for the plaintiff on the second count, and assessed his damages at $1,000' actual and $500 punitive damages. Upon the coming in of the verdict the clerk entered up a judgment on the verdict in favor of the defendant on the first count and in favor of the plaintiff on the second count. The plaintiff moved for a new trial on the first count, and the defendant moved for a new trial on the second count. The court overruled the plaintiff’s motion and sustained the defendant’s motion, giving as reason therefor that it had erred in admitting the evidence of the foreman of the grand jury. Thereupon, the plaintiff appealed to this court.

I.

The first question that presents itself for adjudication in this case is as to the jurisdiction of this court. The plaintiff’s contention is that this court has jurisdiction because there was a final judgment against him on the first count, in which he had prayed $5,000 damages, and a verdict in his favor on the second count for $1,500 which the court afterwards set aside, and that he appealed from the order and judgment of the court in both respects.

If this contention is tenable, this court has jurisdiction; otherwise not, but jurisdiction is vested, under.the Constitution, in the Kansas City Court of Appeals.

Where there are several counts in a petition, there should be a separate finding on each count. ■ [Lancaster v. Insurance Co., 92 Mo. 460; Brownell v. Railroad, 47 Mo. 239; Clark v. Railroad, 36 Mo. 203; Russell v. Railroad, 154 Mo. 428.]

At common law, and theoretically under our statute, a judgment is not entered upon a verdict until after the motion for new trial and in-arrest of judgment have been overruled. As a matter of practice in this State the custom has grown up of entering the judgment upon the verdict immediately upon the coining in thereof and before the filing of the motion for new trial or in arrest. This is done to prevent the party against whom the judgment is entered from disposing of his property between the date of the returning of the verdict and the entry of the judgment, but, theoretically, the judgment is not entered until after those motions have been acted upon by the court.

There can be but one final judgment in a case, no matter how many counts there may be in the petition. [Boothe v. Loy, 83 Mo. App. 601; Seay v. Sanders, 88 Mo. App. 478; Russell v. Railroad, 154 Mo. 428; Young v. Young, 165 Mo. 624; Warren v. Manwarring, 173 Mo. 21.]

Pursuant to the theory above stated, where there is only one count in the petition, and judgment is entered upon the verdict before the motion for new trial is acted upon, and the motion is afterwards sustained, the judgment is impliedly set aside without any express order to that effect. [Lane v. Kingsberry, 11 Mo. 402; Hurley v. Kennally, 186 Mo. l. c. 288.] Here there were two counts in the petition. No separate trial was ordered by the court on those counts, as might have been done under section 694, Revised Statutes 1899, if the trial court had so directed. But this section also provides, “The judgment upon each separate finding shall await the trial of all the issues. ’ ’

The question here presented then is, whether upon the court overruling the plaintiff’s motion for new trial on the first count and sustaining defendant’s motion for new trial on the second count, the court could enter judgment in favor of the defendant on the first count but leave the second count undetermined. Given the premises that there can be but one final judgment in a case no matter how many counts there may be in a petition, and that the judgment on each count shall await the trial of all the issues, it follows that the trial court had no power to enter a judgment for the defendant on the first count until the issues presented by the second count were finally adjudicated. Then for the first time the court had power to enter a final judgment.

Prom the foregoing it logically follows that there is no legal final judgment in favor of the defendant on the first count, and, therefore, the ruling of the court with respect to that count isN not before this court on appeal, for a party cannot appeal until there is a final judgment in the lower court. Under the statute the plaintiff was entitled to an appeal from the interlocutory order of the trial court sustaining defendant’s motion for a new trial on the second count, and as the verdict upon that count was only for $1,500 and as that amount does not bring the case within the appellate jurisdiction of this court, and as no other jurisdictional fact is presented by the record, this court clearly has no jurisdiction of the appeal, unless it be that a verdict of a jury, like a judgment of a court, is an entirety, and that when set aside at all it is set aside in its entirety, in other words, unless the setting aside of the verdict in favor of the plaintiff on the second count destroyed the whole verdict and had the effect of also setting aside the verdict in favor of the defendant on the first count.

If there had been separate trials of the two counts in the petition, under section 694, Revised Statutes 1899, there can he no question that the verdict upon one of those counts would not he affected by the action of the court upon the verdict upon the other count, but that the verdict on the first count would stand until the determination of the issues under the second count, and the judgment would then be entered upon both counts in conformity to the separate verdicts. This is the policy of the statute. And, therefore, it can make no difference in principle whether the two counts were tried separately and separate verdicts rendered thereon, or whether the two counts were submitted to the same jury and a verdict in favor of the defendant was returned on one count and in favor of the plaintiff on the other and the verdict in favor of the plaintiff on the second count was set aside by the court. In such a contingency the verdict on the first count would stand until there was a final trial on the second count, and then one judgment would be rendered in the case in accordance with the verdicts upon both counts. The principle here involved came before this court in Needles v. Burk, 98 Mo. 474. In that case the petition was in two counts, each for a distinct cause of action. The jury returned a verdict for the plaintiff for $143.60 on the first count and for $5 on the second count. The defendant appealed, and this court reversed the judgment and remanded the cause. Afterwards, in the circuit court the plaintiff was ruled to give security for costs, within sixty days. Before the expiration of that time the plaintiff dismissed as to the first count and moved for judgment on the former verdict on the second count. Before this motion was passed on the case was dismissed for failure to give security for costs, and plaintiff appealed. Black, J., speaking for this court, said: “The argument of the plaintiff is that the original judgment in his favor was reversed only as to the first count; that upon dismissing as to that count, he had a right to a judgment on the second, without further trial. "Where there are several causes of action, the court may direct separate trials, the judgment to await the trial of all the issues. [R. S. 1879, sec. 3603.] In such cases the awarding of a new trial as to one count would not call for a new trial as to the other counts. If all the issues are tried at the same time with a verdict upon each cause, of action we can see no reason why the court might not award a new trial as to one cause of action and let the verdict stand as to the others. The question then is, what was done in this case? By looking to the opinion filed, when this ease 'Was here before, we see that the errors considered related to the first count only; but our judgment is general and without limitation. So far as our judgment is concerned, it might as well be said the judgment of the circuit court was reversed for errors in the trial of the second, as for errors in the trial of the first count. When the cause was remanded it stood for new trial just as if the motion made for that purpose in the circuit court had been sustained. Whether that motion asked a new trial on one or both causes of action is not disclosed by this record. As both causes of action were tried at the same time and nothing to the contrary appearing, we must assume that the motion called for an entire new trial, and our judgment awards relief to the full extent of the prayer of the motion. The contention of the plaintiff cannot he sustained on this record. ’ ’

In Wollman v. Loewen, 108 Mo. App. l. c. 587, Goode, J., speaking for the St. Louis Court of Appeals, to the question here involved, said: “In causes where there have been separate verdicts or findings, on distinct causes of action, appellate tribunals may, and to save costs, and expedite justice, often do-, reverse the judgment for an error committed in trying the" issues arising on one count, and remand the cause with a direction to retry those issues and let the verdicts on the other counts stand. [Citing cases.] This is done when it is possible to retry nothing bnt the cause of action erroneously tried at first, without prejudice to the rights of the par-ties. And if a trial court is directed to follow this course, we understand that, according to regular procedure in legal actions, the judgment on the undisturbed finding should be withheld until a verdict is returned on the issues to be retried, and then be rendered to cover that finding as well as the others; for there can be but one final judgment in a cause. ’ ’

In McFarland v. Railroad, 125 Mo. l. c. 275, in speaking of a trial of a cause where more than one issue, was involved, this court said: “Under our code it is the duty of the circuit courts to administer both legal and equitáble rights and remedies, when necessary, in the same civil action. The trial court is armed with the discretionary power to direct separate trials, where the nm ture of the issues on the pleadings require them. [R. S. 1889, sec. 2134.] The exercise of that power furnishes the remedy for such confusion as might otherwise be brought about by the attempt to administer law and equity in the same forum.”

Russell v. Railroad, 154 Mo. 428, was an action for damages for personal injuries. The petition was in two counts; the first, in equity, asking to have a release previously executed by the plaintiff set aside and vacated, and the second a claim for damages for personal injuries. The trial court tried the equity count first and rendered a decree cancelling same, and both parties appealed to this court. The record did not show whether the count at law had ever been tried or not. It was held that the appeal was prematurely taken because there could be but one final judgment in the cause which must dispose' of all the issues presented, and that the judgment on the equity count should not have been entered upon the finding upon that count until there had been a judgment on the other count in the petition, and that this was true no matter how many counts there were in the petition, and no matter if the finding on one of the counts was for the plaintiff and the other for the defendant or not, there could be only one final judgment in a cause. For that reason the appeal in that case was dismissed.

From the foregoing it necessarily results that there has been no legal judgment yet entered upon the first count in the petition, and there can be no such judgment entered thereon until the second count has been tried, •when one judgment must be entered upon both counts in conformity to the verdicts thereon. It further follows that the action of the trial court in granting a new trial on the second count did not have the effect of setting aside or disturbing the finding of the jury on the first count, and that the appeal in this case only brings up for review the action of the court in granting a new trial on the second count. When the second count has been disposed of, then a judgment upon the whole case must be entered; and if at that time plaintiff desires to have the action of the trial court and the verdict of the jury on the first count reviewed, he can then appeal. Until such is done, that ruling and the verdict on that count cannot be reviewed. The result follows that as the verdict on the second count was for $1,500 only, and as only the ruling of the court in granting the defendant a new trial on that count is involved in this appeal, this court has no jurisdiction of the case at this time, but the appellate jurisdiction over the question here involved is by the Constitution vested in the Kansas City Court of Appeals; and for these reasons this case is transferred to that court.

All concur.


source: Caselaw Access Project

author: VALLIANT, J.

license: Public Domain

text:
    FRANCES I. CAPEN v. GARRISON et al., Appellants.
    Division One,
    February 22, 1906.
    1. EQUITY: General Principles. Equity violates no law and does not assume to make a contract for the parties; it follows the law and upholds it, and when it comes to the relief of one to whom the law cannot afford adequate remedy, it does not in so doing infringe the law or impair its force, nor does it reconstruct the contract between the parties.
    2. -: Subrogation. Subrogation may result as the direct legal effect of a contract, as where a purchaser on agreed terms purchases a subsisting mortgage; or it may be imported into the transaction by equity where the contract is silent on the subject, yet is raised by equity as an implied part of the transaction and as manifesting the intention of the parties under the conditions surrounding it. But equity will not engraft subrogation on to the transaction if the conditions arising from the performance of the contract show that the parties did not intend that subrogation should result and the contract itself negatives the idea of subrogation and to imply it would be inconsistent with the contract.
    3. -: -: When Implied. If subrogation is not inconsistent with the contract or in violation of any one’s legal rights and if justice demands it, equity will imply it, though the parties may never have thought of it. But equity will not imply it if the contract forbids it.
    4. -: -: Usual Application. Subrogation is usually applied where a person at the request of a debtor pays the mortgage debt, or where one interested in the property pays an incumbrance to protect his own interest, or where he stands in the relation of surety to the debt.
    5. -: -: Curator’s Mortgage: Payment of Pre-existent Mortgage: Directed by Probate Court: Mistake. The law does not authorize the curator to mortgage his minor ward’s estate to pay a pre-existing incumbrance, and if he borrows money and gives a mortgage thereon to secure the loan and uses the money so borrowed to pay oif a subsisting mortgage left on the property by the minor’s deceased ancestor, the mortgagee in the curator’s mortgage is not subrogated to the rights of the mortgagee in the other, the evidence clearly showing that the lender did not rely on the old mortgage. And the fact that both parties thought that the curator’s mortgage, fortified by an order of the probate court directing him to borrow money to pay off the preceding mortgage and thereby prevent the foreclosure of that mortgage, was valid, does not alter the case. In that they were mistaken, but, though mutual, it wms -a mistake of law.
    6. CURATOR’S MORTGAGE: Meaning of Statute. The exprespression in the statute authorizing the minor’s estate to be mortgaged for his education and maintenance is an exclusion of the curator’s right to mortgage it for any other purpose.
    7. -: "-: Necessity. A curator’s mortgage cannot be upheld on the ground that it was necessary to mortgage the minor’s estate,in order to save it to him from sale under a pre-existing incumbrance. Nor can the court say that it is to his interest to replace a matured mortgage by a three-year mortgage.
    8. -: Equitable Lien. The lender is not entitled to an equitable lien on the minor’s property for money advanced by him to the curator to pay off a mortgage placed upon the property by the minor’s ancestor. There is no legal obligation on the minor to pay the pre-existing debt, and therefore there is no foundation upon which to build an equitable lien. Nor will a court of equity aid the curator to do by indirection what he is by statute forbidden to do directly. He cannot indirectly by an equitable lien or directly by a mortgage incumber his minor ward’s land for the purpose of obtaining money wherewith to pay an encumbz-ance placed thereon by the minor’s ancestor.
    Appeal from St. Louis City Circuit Court. — Hon. Jus. 11. Kinealy, Judge.
    Reversed and remanded (loith directions).

      T. Percy Carr for appellants.
    (1) The only purpose for which the statute authorizes a curator to mortgage the real estate of his ward under the direction of the probate court is the education, support and maintenance of the minor. R. S. ■1899, sec. 3504. The notes and deed of trust filed in this case, although executed by the curator under an order of the probate court, being beyond the statutory powers of both the curator and the probate court, are void. Woods v. Boots, 60 Mo. 546; Windleton v. O’Brien, 68 Mo. App. 675; In re Estate of Bouie, 94 Mo. App. 367; Johnson v. Bank, 56 Mo. App. 257; Leet.v. Gratz, 92 Mo. App. 422. (2) The plaintiff having voluntarily loaned her money for the purpose of paying off the Gerhard deed of trust, without fraud, undue influ 7 ence, accident or mistake, and not for the purpose of protecting any interest of her own in the property, occupies the position of a mere volunteer, and is not entitled to be subrogated under the deed of trust so paid off and released. Kleimann v. Gieselinann, 114 Mo. 437; s. c., 45 Mo. App. 497; Bunn v. Lindsay, 95 Mo. 259; McDonald v. Quick, 139 Mo. 500; Norton v. Highleyman, 88 Mo. 621; Price v. Courtney, 87 Mo. 387; Price v. Estill, 87 Mo. 378; Anglade v. St. Avit, 67 Mo. 437; Wooldridge v. Scott, 69 Mo. 669; Wade v. Beldmeir, 40 Mo. 486; Evans v. Halleek, 83 Mo: 376; Brown v. Bank, 66 Mo. 427; Lemmon v. Lincoln, 68 Mo. App. 76. (3) (a) The homestead of appellants, the minor children of C. K. Garrison, is made by statute not “ subject to the payment of the debts of the deceased, unless legally charged thereon in his lifetime.” R. S. 1899, sec. 3620. (b) The voluntary payment of the Ger-hard deed of trust had the effect of discharging the legal lien created during the lifetime of the father, and left the children’s homestead clear. Kleimann v. Gieselmann, 114 Mo. 445. (c) The decree below has the effect of creating an equitable lien which had no existence prior to such decree, for the payment of a debt of the father, and is, therefore, in contravention of the statutory provision that the children’s homestead shall not be subject to the payment of the father’s debts except where legally charged thereon in his lifetime. Dickason v. Fisher, 137 Mo. 362.

      George W. Easley with Boyle & Priest for respondent.
    (1) If the plaintiff furnished the money to pay off the mortgage defendants were bound to pay, and at the request of the defendants, she was not a volunteer. Norton v. Highleyman, 88 Mo. 624; Evans v. Halleek, 83 Mo. 379 ; Wilson v. Brown, 13 N. J. Eq. 277; Grans v. Thieme, 93 N. Y. 232. The petition, and the order of the probate court cannot be read without a strong implication arising that there was an agreement that the plaintiff was in fact buying the lien of the first mortgage and the taxes. Certainly, she was to have a lien upon the property for the money she advanced. That money went to the extinguishment of a prior subsisting lien, and, if necessary that it shall rest upon contract, the court will do no violence in implying such contract from the facts and circumstances in this case. Crippen v. Chappel, 35 Kan. 495. The purpose and intent of the parties was clear, that the first mortgage should be paid off, and that plaintiff should have a first lien upon the property for her money. That lien not having been given, she is entitled to be subrogated to the lien of the first mortgage discharged with her money. Griffith v. Townsley, 69 Mo. 13; Valle v. Fleming, 29 Mo. 152; Jones v. Manly, 58 Mo. 559; Evans v. Snyder, 64 Mo. 516; Sims v. Gray, 66 Mo. 613; Snider v. Coleman, 72 Mo. 568; Schaefer v. Causey, 76 Mo. 365; Henry v. Mc-Kerlie, 78 Mo-. 428; James v. Lane, 33 N. J. Eq. 30; Barman v. Frost, 17 Gratt. 398. (2) Plaintiff has an equitable lien on the property, which a court of equity will enforce. If for any technical reason the doctrine of subrogation or substitution does not apply, we are entitled to have the property in this case charged with a lien, and such charge arises from the equities growing out of the contract or acts of the parties. We insist that the acts of the parties in this case and the admitted facts are sufficient to charge the property in this case with the lien of the money advanced by the plaintiff, which went to the extinguishment of the former mortgage. (3) The defendants cannot make any valid contention under the homestead statute. The homestead was acquired after the debt, paid off by plaintiff’s money, accrued. 0 ’Shea v. Payne, 81 Mo. 316.
   VALLIANT, J.

— This is a suit in equity in which plaintiff seeks to subject certain real estate belonging to minors to the payment of money loaned by the plaintiff to the curator of the minors for the purpose of paying off a pre-existing encumbrance on the property.

The main facts in the case are these:

The property in question is a dwelling house and lot in St. Louis. Cornelius K. Garrison bought the property in 1893 and resided in it as his home until his death in 1895. He left a widow, Mary B. Garrison, and three minor children, who, together with Daniel E. Garrison, the duly appointed curator of the children, are the defendants in this suit.

When Cornelius K. Garrison bought this property it was encumbered with a debt of $5,200' principal, secured by deed of trust, the payment of which he assumed, but which he left unpaid at his death.

In March, 1899, there was due on this debt the whole of the principal and $182 of interest, and the creditor was demanding payment; besides this, there was .due the State and city, for taxes, the sum of $742.22, -a portion of which was required to be paid at once to avoid suit. There was no personal property available to the curator for the payment of these encumbrances, and he feared that the real estate of his wards would be sacrificed in the threatened foreclosure sales. Thereupon, he petitioned the probate court, stating these facts, and praying to be authorized to borrow $5,500 with which to pay these encumbrances and to secure the loan by a. deed of trust to be executed by bimself as curator for the children and by the widow of Cornelius K. Garrison. The probate court made the order as requested, the curator borrowed the $5,500 from the plaintiff in this suit, and he in his representative capacity and the widow executed a note for that amount due in three years, with six semiannual six per cent interest notes, and a deed of trust on the real estate mentioned to secure the same.

The plaintiff was represented in the transaction by a real estate agent. The curator said to the agent that he desired to conduct the business with as little expense as possible and therefore preferred to have the old deed of trust and notes transferred to the lender, but the agent said that Ms clients preferred to take new papers and accordingly when the negotiations were ended and agreement reached, the agent received from his client the $5,500, and with it went to the bank where the old notes were, paid them, had the old deed of trust satisfied on the record, and presented to the curator an account of the expenditures, one item of which was $5,474.50 paid to the bank on the old notes and deed of trust besides $0:70 paid for releasing the old deed on record, expense of executing new deed of trust, the agent’s own commissions and other items, the aggregate of all which exhausted the $5,500, and showed a balance of $62.74 as due the real estate agent, which balance Mr. Garrison, the curator, paid with his individual check. Mr. Garrison also paid the accumulated taxes. The old notes and deed of trust, after being can-celled and entered as satisfied on the record, were delivered to the curator. The new deed of trust was duly recorded. A title examiner gave the certificate of title on which this transaction was based and which was delivered by the real estate agent to the plaintiff (or to her son who acted for her), along with the new deed of trust. In this certificate, referring to this new deed of trust, was this notation: “This is an equitable lien, and a decree of the circuit court will be necessary to foreclose as to all interest of minors.” .

The interest notes on this loan were paid as they matured except the last one due when the principal fell due three years after date. At that time the curator was unable to renew the note or obtain a new loan, no lender could he found who would take a curator’s deed and the curator having no means of his wards with which to pay the debt this suit resulted.

The prayer of the petition is, first, that the deed of trust be decreed to he a valid lien and that it he foreclosed as a mortgage; second, if that cannot be done, then that an account he taken to show the amount of plaintiff’s money that was used to pay off the former encumbrances, that the entry of satisfaction of the old deed of trust he set aside and the plaintiff subrogated to the rights of that creditor; third, if that cannot be done, then that the debt due plaintiff he decreed to he an equitable lien on the property in question and a foreclosure accordingly. The trial court took the last-named theory as the correct one, declared plaintiff’s claim an equitable lien on the property, and decreed a foreclosure.. From that judgment the minors appeal.

Subrogation is a doctrine of equity jurisprudence. “It does not depend on privity or contract, express or implied, except in so far as the known equity may be supposed to be imported into the transaction and thus raise a contract by implication.” [27 Am. and Eng. Ency. Law (2 Ed.), 203.] It is a consequence which equity jurisprudence attaches to certain conditions. The parties may not have contracted for it either expressly or by legal implication, hut if, in the performance of that contract which they did make, certain conditions have resulted which make it necessary for equity to interpose its authority in this respect it will do so, provided that in so doing it will violate no law and not alter the contract. Equity violates no law and it does not assume to make' a contract for the parties; it follows the law and upholds it, and when it comes to the relief of one to whom the law cannot afford adequate remedy it does not in so doing infringe the law or impair its force, nor does it reconstruct the contract between the parties.

Whilst the right of subrogation as understood in equity jurisprudence is not the direct legal effect of a contract, yet parties may by express contract accomplish the same practical result; for example, you may agree with a mortgagor to purchase and hold, on agreed terms, his outstanding mortgage obligation and when you have made the purchase you stand as to the security in the shoes of the original mortgagee, but that is the direct legal consequence of your purchase, it is not the equitable subrogation that we are now discussing. Whilst the right of subrogation, as imported into the transaction by equity jurisprudence, does not flow as a direct legal consequence from a contract expressed or legally implied, yet to this extent it is dependent on the contract, that is, it grows out of conditions resulting from the due observance of the contract and it must not be inconsistent with the terms of the contract.

As the law-writer above quoted, in effect, says, subrogation is to this extent implied, that is, we will presume that the parties making the contract knew of-this equity principle and contracted in reference to it, so if the contract will bear the importation and the conditions demand it, subrogation will be imported into it. The contract may be silent on the subject, yet its terms may leave it open to the introduction of this equitable principle and in such case the principle may be applied. But the terms of the contract and the conditions arising from its performance may be such as to show that the parties did not intend that subrogation should result and in such case it will not result. Equity will not engraft this doctrine on the transaction in the face of a contract that negatives the idea of subrogation. In other words, the. contract ma.y be silent on the subject yet not inconsistent with the idea of subrogation, or, on the other hand, it may be silent on the,subject yet its terms expressly or by implication forbid the application of the doctrine. So it may be said that equity may apply the doctrine although the contract does not either expressly or by legal implication call for it, but it will not apply it if the contract either expressly or by legal implication forbids it. The parties may not have had subrogation in their minds at all when they made the contract, but that fact alone would not control in a question of application of the doctrine; equity will apply it though the parties may never have thought of it, if it is not inconsistent with the contract or in violation of any one’s legal rights and if justice demands it. And the fact that the parties may, through ignorance of the legal consequence of their contract, have thought that they were providing adequate new security for the money advanced, will furnish no foundation for the interposition of this equitable principle if the contract forbids it; equity cannot reform the contract so as to make for them a contract which it may be conjectured the parties would have made for themselves if they had known what the law was.

The usual application of this principle occurs where a person at the request of the debtor pays the mortgage debt, or where one interested in the property pays an incumbrance to protect his own interest, or where he stands in the relation of surety to .the debt. [Evans v. Halleck, 83 Mo. 376; Norton v. Highleyman, 88 Mo. 621; Bunn v. Lindsay, 95 Mo. 258; 27 Am. and Eng. Ency. Law (2 Ed.), 203.]

The text last cited concludes the sentence with these words: “or wherever a denial of the right would be contrary to equity and good conscience.” That of course is understood to mean equity as prescribed and circumscribed by the rules of equity jurisprudence and the dictates of good conscience within the same boundaries. To quote the language of Judge Scott in his dissenting opinion in Valle v. Fleming, 29 Mo. l. c. 166: “No man is wiser than the law; and miserable is that system of jurisprudence under which the rights of litigants depend on the notion of right or wrong entertained by any man or set of men.”

The doctrine of subrogation has frequently been considered by this court. In the case last referred to, Valle v. Fleming, 29 Mo. 152, it was held that a. purchaser of land at an administrator’s sale who failed to get a title because of irregularity in the proceeding, but who had paid the purchase money and the administrator had applied it to the discharge of a pre-existing mortgage, was, as against the heir, entitled to be subrogated to the rights of the mortgagee. In that case the purpose for which the sale was ordered by the probate court was one for which the law authorized such sale to be made, that is, to pay debts, and the reason the administrator’s deed was void was that he had not given the notice that the statute required. The court held that it would be inequitable to allow the heirs to repudiate the deed for irregularity in the proceeding yet retain the advantage of a discharge of the mortgage by use of the plaintiff’s money. The difference between that case and this is, ■ that the administrator’s sale was for a purpose for which the law authorized a sale and the only reason the salé was not valid was irregularities in the proceeding, whereas in this case the proceedings were in due form, but the purpose for which the probate court essayed to authorize the curator to execute the deed was not one for which the law authorized the curator to encumber his ward’s land.

In Evans v. Halleck, 83 Mo. 376, an administrator paid off a mortgage on the land with funds belonging to the estate under the belief that there was enough person al assets to pay the mortgage and also the debts allowed against the estate, which proved to be a mistake; it was held, in favor of the widow and heirs, that in paying off the mortgage the administrator was a mere volunteer and not entitled to subrogation.

In Norton v. Highleyman, 88 Mo. 621, the defendant Highleyman owned the land subject to a mortgage given by a former owner to the county; on default in payment a sale to foreclose was advertised by the sher- , iff; on the day appointed the plaintiff appeared and informed the sheriff and Highleyman that he was willing to bid the amount of the mortgage debt and costs for the land, but they told him that there would be no sale that day, and thereupon he went away; after he left, however, the sale did occur and the land was struck off to Highleyman, but Highleyman did not then pay his bid, and had not done so seven days thereafter, when the plaintiff appeared before the county court and offered to pay the amount of the debt and costs for the land; his offer was accepted by the county court and he ■ paid the amount into court supposing that he was to have a deed, but he did not get a deed and failing to get what he expected, he brought suit against Highleyman seeking to be subrogated to the rights of the mortgagee; it was held that he was a mere volunteer and entitled to nothing. In that case Highleyman was permitted to take the benefit of the plaintiff’s payment of the mortgage and keep the land. It was a hard case, but the fact was the plaintiff through ignorance of the law had volunteered to pay another man’s debt, and the court could not relieve him of the consequence of his own blunder.

In Bunn v. Lindsay, 95 Mo. 250, Lindsay, the owner of the land, executed a deed of trust on it to secure a debt to a building company, which deed was duly recorded, after that a judgment was rendered against Lindsay, a transcript of which was filed in the office of the clerk of the circuit court of the county in which the land lay, and it was duly entered on the judgment roll; after that Lindsay borrowed from Bunn money with which to pay the debt covered by the deed of trust to the building company, and executed a new deed of trust for the loan, which was recorded. In the application for the loan it was expressly stated that the money was to be used to' pay off the debt covered by the then existing deed of trust, and Bunn’s agent who conducted the business for him (like the real estate agent of the plaintiff in the case at bar) himself handled the money and with it paid the debt and attended to the releasing on the record of the former deed of trust. The negotiations for the new loan were begun before, but were not concluded until after, the judgment creditor had had the transcript of his judgment filed and entered on the judgment roll. Bunn’s agent had failed to examine the judgment roll and he had no actual notice of this judgment. The land was sold under the judgment and Bunn brought suit seeldng to be subrogated to the rights of the first mortgagee. The court denied his prayer, saying, per Brace, J.: ‘ ‘ The debt due by Lindsay .to the building company and the lien given to secure it were absolutely extinguished by the payment. Such was the intention of all parties to the transaction. The plaintiff relied for security for the money he advanced solely upon the deed of trust which he took at" the time, and the sole ground upon which a court of equity is asked to intervene in his behalf in this case is the assumption that he would not have parted with his money to make the loan and payments if he had known in January that Paramore’s judgment lien had attached to the premises in December.”

In the case at bar the only ground on which a court of equity is asked to intervene in the plaintiff’s behalf is that she would not have parted with her money if she had known that a curator had no authority in law to make such a deed.

The casé at bar is very much like that of Kleimann v. Gieselmann, 114 Mo. 437; same case, 45 Mo. App. 497, in its most important features. In that case the father died leaving his homestead encumbered with a mortgage, leaving also' a widow and minor children; the new loan was obtained for the purpose of paying off the old mortgage and the money so obtained was used for that purpose, the new mortgage (or deed of trust) was executed by the widow alone, she and the lender both believing at the time that under the terms of her husband’s will she was the sole owner of. the property, which was a mistake in their interpretation of the will. After the mistake was discovered, it was sought to have the doctrine of subrogation applied to the transaction on the ground that the children had obtained the benefit of the new loan in the discharge of the mortgage which encumbered the property when it descended to them, and that equity and good conscience demanded that the new loan should be placed in the position of the old one. But the St. Louis Court of Appeals, in an opinion by Rombauer, J., which when the cause came here was, in an opinion by Burgess, J., adopted as the opinion of this court, held that in so far as the children were concerned the new lender was a mere volunteer and not entitled, as to them, to subrogation. This court said that the mistake under which the parties labored, though it was mutual, was a mistake of law, and therefore no room for equity interference was found on the ground of mutual mistake. In the case at bar, both parties doubtless thought that the deed of the curator, fortified with the express order of the probate court, was valid; in that they were mistaken, but it was a mistake of law.

There are other eases in our books in which this court has discussed this doctrine of subrogation, but the cases above referred to are sufficient to show the view that this court has from the first taken of this sub-' ject.

The statute prescribes the only purposes for which a curator, even with the sanction of the probate court, may mortgage his ward’s lands, and the borrowing of money to discharge a pre-existing encumbrance is not one of those purposes. [Sec. 3504, R. S. 1899.] If a power in the curator might be implied from the necessity of a case, surely no more important purpose could be imagined than the education and maintenance of the ward, therefore under such a theory there would have been no necessity for a statute expressly authorizing the curator to incumber the ward’s property for his education and maintenance. The expression therefore of that particular purpose in the statute is in effect the exclusion of all others, and it means that the power to encumber the ward’s property does not exist except for the purposes expressed in the statute and except that it be exercised in the manner prescribed by the statute.

It is urged in the argument that this transaction was manifestly for the interest of the children, that foreclosure was threatening, and they had no means with which to discharge the encumbrance. It may or may not, as a matter of fact, have been for the best interest of the children. Whether it would have resulted more to their advantage to have allowed the property to go to sale at the time of the threatened foreclosure, than to postpone it three years until the new mortgage should mature, depends on circumstances. There is nothing in this record that would justify us in saying that these children were any better off at the end of the three years’ limit of the new mortgage than they were before, and on the other hand if it is a fact that the property would have sold better under the old mortgage, either because the market was better then or the title was clearer, the children have been deprived of that advantage by this transaction. But this is said only in response to the suggestion that the new mortgage was manifestly to the interest of the minors; it is not on that ground that the decision must rest. We are not authorized to speculate on what may have been best for the minors in such a case; it is sufficient for us to know that the law does not authorize a curator to dot what this curator attemped to do, and therefore his act was void.

The evidence shows that the lender did not rely on the old mortgage, but the contrary, the lender’s agent himself, with the money loaned, paid the old debt and saw to it that the satisfaction of the old deed of trust was entered on the record. In order to subrogate the plaintiff to the rights of the original mortgagee we would have to make a new contract for the parties and give a different interpretation to the equitable doctrine of subrogation from that given in the cases above referred to.

The learned trial judge decided that this was not a case for the application of the doctrine of subrogation and in that respect his conclusion was correct, but he held that the plaintiff was entitled to an equitable lien and under that theory gave the plaintiff practically the relief prayed.

The doctrine of equitable lien follows closely on that of subrogation. They both come under the maxim ‘ ‘ equality is equity, ’ ’ and they are applied only in cases where the law fails to give relief and justice would suffer without them. But the doctrine -of equitable lien has its prescribed boundaries as well as that of subrogation; it is not a limitless remedy to be applied according to the measure of the conscience of the particular chancellor, any more than, as an illustrious law-writer said, to the measure of his foot. The right to an equitable lien arises when a party at the request of another advances him money to be applied and which is applied to the discharge of a legal obligation of that other, bnt when, owing to the disability of the person to whom the money is advanced, no valid contract is made for its repayment. For example, if money is advanced to a minor to pay a debt which he has incurred for necessaries furnished him, no action at law lies to recover of the minor on a contract express or implied for the repayment of the money loaned, yet as the money was loaned to discharge a debt for which the minor was liable at law and it was used for that purpose a court of equity will charge a lien on the minor’s property to repay the sum advanced. [3 Pomeroy, Eq. Juris;; sec. 1300.] The doctrine of equitable lien is not limited to an advancement to a minor, but it is limited to cases where the same principle applies as is illustrated in the above supposed case. In the case at bar, there was no legal obligation on these minors to pay this debt, and therefore there was no foundation on- which to build an equitable lien. The doctrine of equitable lien applies no more in favor of a mere volunteer than does the doctrine of subrogation.

In vain would a statute prescribe the limit of a curator’s power to mortgage his ward’s property if a court of equity should, by giving it another name, whether it be subrogation or equitable lien, invest an unauthorized deed with substantially the same effect it would have had if it had been expressly authorized by the statute.

The court erred in holding that the plaintiff was entitled to an equitable lien. The judgment is reversed and the cause remanded to the circuit court with directions to enter judgment for defendants, and dismissing the plaintiff’s bill, without prejudice, however, to the plaintiff’s right to foreclose her deed of trust as to the interest of Mrs. Mary B. Garrison.

Brace, G. J., and Marshall, J., concur; Lamm, J., dubitante.


author: BRACE, P. J.

text:
    METROPOLITAN LEAD & ZINC MINING COMPANY v. WEBSTER, Appellant.
    Division One,
    February 22, 1906.
    1. NEW TRIAL: No Ground Specified: Appeal. Although the court did not specify the ground upon which a new trial was granted, it will, nevertheless, on appeal, be sustained if, on any of the grounds set forth in the motion, it ought to have been sustained.
    2. -: Weight of Evidence: Undisputed Facts. The appellate court will not interfere with the discretion of the trial court in granting one new trial, supposably upon the assigned ground that the verdict was against the weight of the evidence, unless, upon the undisputed facts in the case, no verdict for the party ashing for a new trial could ever be allowed to stand.
    3. CORPORATION: Subscription: Fraud: Parol Evidence. The subscriber to articles of association of a corporation, when sued thereon by the company for the unpaid amount of his subscription, may show, by parol evidence, that the articles were a fraud and his signature thereto obtained by fraud.
    ■1. WRITTEN CONTRACT: Fraud: Parol Evidence. The rule ■ that a written contract cannot be contradicted or modified by parol evidence has never been held to preclude parol evidence tending to prove that the instrument itself was a fraud or that the signature of a party thereto was obtained by fraud.
    5. CORPORATION: Fraud: Unpaid Subscription: New Trial. Where it appears from the undisputed evidence, in a case brought by a corporation against a subscriber to its articles of association to compel him to pay for the stock therein stated to have been subscribed by him, that the company was a mere paper corporation; that those who subscribed to its articles never paid any money or turned over any property to the company; that it has not and never had any capital, either in property or money; that it never carried on the business for which it was incorporated or attempted to do so, and hence has no creditors whose rights need be considered; that defendant’s name to its articles was obtained by false representations that it owned certain valuable mining leases, and that he was to be paid certain money for his interest in valuable properties, which was not paid; and that he never participated in its organization or operations, no verdict for plaintiff could ever be permitted to stand, and the court erred in granting it a new trial after verdict for defendant.

      Appeal from Jasper Circuit Court. — Ho». Hugh Dabbs, Judge.
    Reversed and remanded (with directions).

      G. H. Montgomery for appellant.
    (1) The answer of defendant alleged, and the undisputed proof conclusively established, that defendant was induced to sign the subscription for stock by fraudulent misrepresentations as to the leases and property which belonged to the company, this suit being by the pretended corporation and the rights of no creditors being involved. Where a subscription to corporate stock has been procured by fraudulent misrepresentations, the contract is void, and the subscriber may even recover back what he paid, the creditors taking no part in the proceedings. Ramsey v. Manfg. Co., 116 Mo. 313; Fire Kindler Co. v.Rischert. 74 Mo. App. 541; Wills v. Jones, 41 Mo. App. 1; Ins. Co. v. Owens, 81 Mo. App. 201. (2) An incomplete written contract may be aided by parol evidence and the actual consideration may always be shown, especially where the consideration is not stated in the contract. Hequembourg v. Edwards, 155 Mo. 514; State v. Cunningham, 154 Mo. 172; Sanders Co. v. Columbia Co., 86 Mo. App. 169; Ittner v. Hughes, 154 Mo. 65; Newburry v. Durand, 87 Mo. App. 290; Roe v. Bank, 167 Mo. 406; Christian v. Smith, 85 Mo. App. 117; Bowring v. Railroad, 90 Mo. App. 324; Van Ravensway v. Co., 89 Mo. App. 73; Liebke v. Knapp, 79 Mo. 22. A different kind of consideration may be shown from that mentioned in the deed. Jackson v. Railroad, 54 Mo. App. 636; Edwards v. Latimer, 183 Mo. 610; Trust Co. v. McMillan, 188 Mo. 547; Hequembourg v. Edwards, 155 Mo. 514. This so-called corporation never in fact had a legal existence. It was a sham and a legal fraud from the very beginning. (3) A corporation illegally organized cannot collect capital stock. 1 Purdy’s Beach on Priv. Corp., secs. 124, 125; Ins. Co. v. G-azhorn, 2 Mo. App. 206; Bank v. ICeith, 85 Mo. App. 409; Fenton v. Ham, 35 Mo. 409; Hamilton v. Schull, 25 Mo; Banking Co. v. Manfg. Co., 168 Mo. 646.
    . G. E. Nearing and G. V. Buckley for respondent.
    (1) The court erred in permitting defendant to offer any evidence tending to vary the written contract of subscription. Cook on Stockholders,' sec. 138; Ollesheimer v. Mfg. Co., 44 Mo. App. 181; Hotel Co. v. Wright, 73 Mo. App. 243. (2) Defendant was not in any manner defrauded, but on the contrary was attempting to defraud the company by attempting to procure the payment to him of $8,000 with a secret understanding that a large portion of this was to be divided among some of the officers. (3) Appellant makes no showing but that the court was correct in granting a new trial on account of error in the instructions or in the admission or rejection of evidence.
   BRACE, P. J.

— This is an appeal by the defendant from an order of the Jasper Circuit Court granting a new trial in an action for the recovery of an alleged unpaid subscription to the capital stock of the plaintiff company, in which the verdict was for the defendant.

The petition and answer in the case are as follows:

PETITION. '

“Plaintiff for cause of action states that it is a corporation organized and existing under and by virtue of the laws of the State of Missouri. That the above-named defendant was one of the original incorporators, and a member of the first board of directors of this plaintiff. That on or about the 3rd day of January, 1901, defendant subscribed for one hundred shares of the capital stock of this plaintiff, of the par value of $100 each, and thereupon became obligated to pay plaintiff the sum of ten thousand dollars. That payment thereof has been demanded and no part of the same has been paid.
“Wherefore, plaintiff asks judgment against defendant for the sum of ten thousand dollars and interest thereon from January 3, .1901, together with its cost herein expended. ’ ’

ANSWER.

“Defendant for answer to plaintiff’s petition denies that on the 3rd day of January, 1901, or at any other time, defendant subscribed for one hundred shares of the capital stock of the plaintiff, at the par value of one hundred dollars each, and thereupon became obligated to pay plaintiff the sum of ten thousand dollars, or any other sum. Defendant denies each and every other allegation of said petition, and having fully answered, asks judgment for costs of suit.
“2. Defendant for a further defense and answer to plaintiff’s petition states: That at and before the signing of the articles of association of plaintiff, as hereinafter set out, and at and prior to the 3rd day of January, 1901, defendant was the owner of an undivided seven-twelfths interest in a mining lease known as the 49 Lease, the same being a lease upon the following described forty acres of land, described as follows, to-wit: The northwest quarter of the southeast quarter of section seven, township 27 of range 33, in Jasper county, in the State of Missouri, and was also the owner of a sixty-ton crushing and cleaning mill, situate upon said lease; which said interest in said mill was of the value of six thousand dollars, and the said interest of the said defendant in the said lease and mill was of the value of eighteen thousand dollars.
“That at and before the signing by him of the articles of association of plaintiff as herein set out, M. W. Clay, a promoter of said plaintiff company, who was then engaged in inducing parties to subscribe for the stock of plaintiff corporation, falsely and fraudulently represented to defendant that said plaintiff company was the owner of mining leases on fifteen hundred acres of mining land, in Newton county, Missouri, near the towns of Dayton and Spurgeon, Missouri, and that ore had been developed on said land, and that said leases were for a period of ten years and at a royalty of eight per cent on all ores to be mined from said laud; and that said leases had been delivered and were in the hands of persons to be conveyed to plaintiff corporation. And defendant avers that said representations were false and fraudulent, that said leases were never transferred to any one to hold for said plaintiff corporation, neither have they or any of them ever been transferred to said corporation.
“That by reason of the false and fraudulent representations aforesaid, defendant was induced to agree to trade his undivided seven-twelfths interest in said mining lease and mill for ten thousand dollars fully paid up and non-assessable stock of the plaintiff corporation, and fifteen hundred dollars in money, to be paid by plaintiff corporation to defendant, and in futherance of said arrangement and by reason of the false and fraudulent representations above set out, the defendant was induced to sign the articles of association of plaintiff corporation and in no other manner, and for no other purpose. That the said plaintiff at all times refused to comply with said agreement to issue any stock to defendant or pay defendant any money. And that no stock of plaintiff company was ever issued to defendant. And defendant alleges that no property or money was ever paid or delivered by any one to' said corporation, in payment for the capital stock of said plaintiff corporation, or for any part thereof, and defendant having fully answered asks judgment for costs.”

The answer contained two other pleas: one of which was withdrawn, and upon the other no evidence was offeréd and they are, therefore, omitted.

The reply was a general denial. -

The plaintiff to sustain the cause of action introduced in evidence the following articles of association:

“State of Missouri, County of Jackson: ss:
‘ ‘ Know all men by these presents:
“That we whose names are hereunto subscribed, do hereby associate ourselves together for the purpose of forming a corporation under the provision of article nine, chapter twelve, of the Revised Statutes of 1899, and for that purpose do hereby adopt the following articles of association and incorporation, to-wit:
“.First. The name of the corporation shall he the Metropolitan Lead & Zinc Mining Company.
“Second. The principal office of this corporation shall he located at Kansas City, in the county of Jackson, State of Missouri.
“Third. The capital stock of said, corporation shall he one hundred thousand dollars, divided into one thousand shares of the par value of one. hundred each. The same has been bona-fide subscribed and one-half thereof actually paid up in lawful money of the United States, and is in custody of the persons hereafter named as the first hoard of directors.
“Fourth. The names and places of residence of the several share-holders and the number of shares subscribed by each are as follows: Elmer Webster, Joplin, Missouri, 100 shares; A. M. Earhart, Kansas City, Missouri, 300 shares; M. W. Olay, McElhaney, Missouri, 300 shares; Y. D. Snyder, Kansas City, Missouri, 50 shares; Wm. A. Shuman, Kansas City, Missouri, 250 shares.
“Fifth. The business of this corporation shall be managed by a board of directors, consisting of five; and tbe following named persons to-wit, W. M. Clay, Elmer Webster, V. D. Snyder, A. M. Earbart, Wm. A. Sbnman, shall constitute the said board of directors for the first year.
“Sixth. This corporation shall continue a body corporate for the period of fifty years.
“ Seventh. The purposes for which this corporation is formed are as follows:
“To carry on and conduct a general mining business, such as procuring lands by purchase or otherwise, and mineral leases thereon; to prospect and operate the same for mineral substances and deposits; to sell, convey, or otherwise dispose of 'the same by deed, mortgage, lease, bond or otherwise; own and operate all machinery and improvements necessary to successfully prosecute and carry on said business and carry on a general real estate business.
“Witness our hands and seals this 7th day of January, 1901.
“Elmer Webster,
“ A. M. Earhart,
“M. W. Clay,
“V. D. Snyder,
“Wm. A. Shuman.”

The articles were duly acknowledged by the defendant on the third of January, 1901, and by the other parties on the seventh of January, 1901, and on the same day were duly recorded.

The plaintiff then introduced the certificate of the Secretary of State of its incorporation therein, dated January 8, 1901, duly recorded on the 9th of January, 1901, and rested its case.

Thereupon, the defendant demurred to plaintiff’s evidence, his demurrer was overruled, and the defendant, over the objections of the plaintiff, introduced parol evidence to sustain his defense. The facts disclosed by this evidence are substantially stated in tbe brief of counsel for appellant as follows:

“Defendant is and was a hardware merchant in Joplin, Missouri. In the year 1900 he owned an undivided seven-twelfths interest in a first lease on 49 acres of mining land for an unexpired term of four and one-half years and at a royalty of twelve and one-half per cent, known as the 49 Lease, and was also the owner of a seven-twelfths interest in a sixty-ton crushing and cleaning mill on said lease and that his interest in the lease and mill was worth $18,000 to $20,000. He had spent about $8,500 to $8,600' in developing- it, and not having the money to go ahead with the development, wanted to sell his property, or get some one interested with him.
“In the fall of 1900, M. "W. Clay was in the real estate business in Kansas City, Missouri. He went to Joplin frequently, and on such occasions went to defendant ’s store, and talked to him about selling his lease and mill.
“In December,1900, Clay dropped into defendant’s store several times and during these visits told the defendant that he and others had organized a corporation, the Metropolitan Lead & Zinc Mining Company, and that this corporation would buy his property. Clay told defendant that this corporation had leases on fifteen hundred acres of mining land in Newton county, near Spurgeon, a booming mining camp, at a royalty of eight per cent, a very low royalty, two drill holes in ore and one shaft in ore on this land. Clay also stated that these leases were in possession of one Earhart for the company. Clay proposed to defendant that this corporation would buy his seven-twelfths interest in his lease and his seven-twelfths interest in the mill and would pay him fifteen hundred dollars in cash, and ten thous- and dollars in full-paid-up and non-assessable stock of this corporation, and that the company would send down twenty-five thousand dollars in cash to develop the lease. Clay also said that the corporation had sold stock and had this amount on hand to develop this lease. That on account of these statements and representations as to the large amount of mining land leased at such a low royalty, near the then booming mining camp of Spurgeon, and the ore developments on the same, defendant agreed to trade his seven-twelfths interest in said lease and mill for said paid-up stock-and money. Clay sent corporation papers down for defendant Webster to sign to carry out this arrangement and defendant signed them to consummate this trade and for no other purpose. Defendant testified that he knew but little about corporations, and signed the papers without reading them, relying on the representations of Clay that the corporation would do as agreed.,
“Time went on and no money was sent down by the corporation to develop the property or .to pay defendant for his interest in the lease and mill. After repeated demands for the money .due him under the contract, the secretary and general manager, Earhart, notified defendant that the representatives of the company would be down to Joplin to see defendant about his lease on the 29th day of January. On January 29th Director Snyder, Vice-President Clay and Secretary and General Manager Earhart went to Joplin, and then and there defendant Webster tendered them his lease and interest in the mill, and demanded his fifteen hundred dollars, as per agreement. These representatives of the company said it was a good property, but they wanted the whole of it. They also wanted it for less royalty and for a longer time. Webster informed them that the owner of the land would give a new lease for a royalty of ten per cent for a period of ten years, but the company owning the land would require a payment of one hundred dollars per month rental, whether ore was produced or not. Defendant Webster informed them that he could acquire the whole lease and make this change. So these representatives of the plaintiff authorized defendant to make this change; acquire the whole property, surrender the old lease and take a new one on the terms proposed, and they agreed that the company would pay him for such new lease and the mill $6,500 additional to the first arrangement of $1,-500, making $8,000 in cash, and $10,000 in paid up and non-assessable stock of said corporation.
“In compliance with this agreement defendant acquired the other five-twelfths interest in the lease and mill, surrendered his old lease, and took a new lease for ten years at a royalty of ten per cent, with an arbitrary rental of $100 per month to he credited on royalty if ore was produced, hut if none was produced, to be paid anyway, and paid the first month’s rental himself. He notified the company what he had done, and demanded that the company comply with its agreement, hut the company never did, it never paid him any money or delivered him any stock under either agreement.
‘‘ In February following the signing of the corporation papers, defendant was asked to participate in a meeting of the company, hut refused to do so, and stated that until the company complied with its contract, he did not consider that he was a stockholder. He was also named in the corporation papers as director, and also elected treasurer, hut refused to serve in either capacity because he claimed he was not a stockholder.
“After this he learned that the corporation had no money; that the members of the company relied on Snyder selling $25,000 treasury stock at par, hut he was unable to dispose of any. He also learned that the leases on fifteen hundred acres of land in Newton county, near Spurgeon, had never been turned over to the corporation, neither had they ever been delivered to any one for the corporation. He learned that Clay and the other members of the corporation had had a difficulty, and that Clay was to retain these leases and not turn them over to the corporation at all. He also learned that no one had paid in anything on their stock, and that the company had neither money nor property. Under the first arrangement defendant was to receive $1,500 individually in .addition to the. stock, but after-wards Clay and Earhart insisted that this money be used to develop the lease, and defendant agreed to it. Clay and Earhart also insisted that the balance of the $8,000, that is $6,500, which was coming to defendant under the second agreement, be also divided among members of the company, and defendant agreed that all over the actual cost of the five-twelfths interest should be so divided.
“In answer to defendant’s demands that the company pay him the $8,000 under the last agreement, the members of the company objected to the rental clause. Clay, however, testified, and it was not disputed, that the company had no real objection to that clause, and that the objection was only urged because Snyder could sell no stock, and the company could raise no money to pay defendant for his lease and mill, and that the objection was only an excuse which the company put forward for not paying defendant, as agreed. The company not being able to raise any money, Clay proposed to Snyder to pay in $50 apiece and accept the lease with the rental clause in it, but Snyder said he did not want to put any money into it until he sold some treasury stock. Defendant now found himself in this predicament : on the faith of the promises of ample money to develop the lease he had surrendered a lease which did not require any payment except the royalty on the ore actually produced, and had taken a lease which required a payment of $100 a month whether any ore was produced or not. He had also gone on at the request of the members and officers of plaintiff company and incurred considerable expense in acquiring the whole of the lease and mill. He now found himself unable to either make the payments or dispose of his lease, and he lost his whole investment so far as the lease was concerned. ’ ’

The plaintiff offered no evidence in rebuttal, but at the close of the evidence each of the parties asked for a peremptory instruction in his favor, which being refused, the issues were submitted to- the jury on instructions, which need not be set out, as no point is made upon them.

The jury returned a verdict for the defendant, and in due time plaintiff filed its motion for a new trial as follows:

' “Comes now the plaintiff and moves the court to to set aside the verdict of the jury herein and grant it a new trial in this cause for the following reasons, to-wit:
“Í. The court erred in admitting incompetent and improper testimony on the part of the defendant, and erred in refusing to admit competent and proper evidence on the part of the plaintiff.
“2. The court erred in refusing proper and legal instructions offered by the plaintiff, and erred in giving improper and illegal instructions on the behalf of the defendant, and on the court’s own motion, to-wit, all the instructions given for defendant as aforesaid.
“3. The verdict of the jury is contrary to the weight and preponderance of the evidence, and all evidence; contrary to the law, and instructions given by the court; that said verdict was the result of pi'ejudice by the jury and improper remarks and conduct on' the part of the defendant’s attorneys in the trial of said case, and is without any evidence to support it.
“4. On the entire evidence and pleadings the verdict should have been for the plaintiff, and the court should have so directed the jury.
“Wherefore plaintiff prays that said verdict be set aside and it have a new trial herein.”

The court sustained the motion, without specifying the grounds upon which the new trial was granted, as required by statute (R. S. 1899, sec. 801), and the defendant appealed.

I. Although the order of the court did not specify the grounds upon which new trial was granted, the order will be sustained if, on any grounds set forth in the motion, it ought to have been sustained. [Hewitt v. Steele, 118 Mo. 463; Bank v. Wood, 124 Mo. 72; Kreis v. Railroad, 131 Mo. 533.]

And for the plaintiff it is contended that the order ought to be sustained on the ground that the court committed error in admitting defendant’s parol evidence. It is urged that this was error, because such evidence tended to contradict the written contract of subscription, meaning, of course, defendant’s contract of subscription manifested by the articles of association. This contention is based upon an entire misconception of the nature of the defense set up in the answer and of the purpose of the evidence introduced in support of it. The defendant in his answer admitted signing the articles of association, did not seek to change or alter the same in any part, and did not introduce any evidence contradicting any of' its contractual terms. His defense was that the articles of association was a fraud and that his signature thereto was obtained by fraud, and the evidence which he introduced was for the purpose of proving the fraud. The rule that a written contract cannot be contradicted or modified by parol evidence has never been held to preclude parol evidence tending to prove that the instrument itself was a fraud or that the signature of a party thereto was procured by fraud, and nothing to that effect can be found in the authorities cited in support of this contention, or elsewhere. “Contracts to take stock in a corporation stand upon the same footing as all other conventional obligations. If induced by fraud they create no obligation and the injured party lias a right to have them abrogated.” [2 Thompson on Corporations, par. 1362.]

This contention based on the first ground stated in the motion for new trial is, therefore, untenable and is the only ground specifically pointed out by counsel for plaintiff on which.it is claimed the motion for a new trial ought to.have been sustained, but there is another ground in the motion upon which it may have been sustained, i. e., that the verdict is against the weight of the evidence; and as this was the first trial of the ease it was within the discretion of the court to grant a new trial on that ground, .a. discretion that this court will no interfere with unless, upon the undisputed facts in the ease, no verdict for tbe plaintiff would ever be allowed to stand. [Ottomeyer v. Pritchett, 178 Mo. 160; Warner v. Railroad, 178 Mo. 125; Herndon v. Lewis, 175 Mo. 116.]

Is this such a case? We think it is. It appears from the undisputed evidence in the case that the plaintiff is a mere paper corporation; that those who subscribed to the articles of association never, in fact, paid any money or turned over any property of value to the corporation; that it has not now and never had any capital whatever either in money or property, and that it never carried on the business for which it was incorporated or , attempted to do so, and hence has no creditors whose rights need be considered. Can such a sham corporation, in itself a fraud and an abortion, have any standing in court to enforce an obligation to pay for its fictitious stock based upon no capital whatever? No authorities can be be cited answering this question, for, so far as we have been able to discover, this is the first instance in which such an attempt was ever made, and long may it be the last, for the courts of this country will never lend their assistance to the maintenance of such a fraud, and that is a sufficient answer to the question. Hence, a verdict against the defendant, who was induced to sign the articles of association of this sham corporation by fraudulent representations, and thereafter never participated in its organization or operations, if any it had, could never be sustained. Therefore, the order of the circuit court setting aside the verdict was error, for which the same will be reversed, and the cause remanded with directions to the circuit court to enter judgment for the defendant on the verdict.

All concur.