source: Caselaw Access Project

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    WEBB, Appellant, v. ROCKEFELLER et al.
    Division Two,
    March 29, 1906.
    1. CORPORATION: Capita! Stock Not Paid: Liability of Incorporators. The incorporators of a cle facto corporation, to which the Secretary of State has issued a certificate of incorporation, are not liable to a creditor of the company, simply because the full amount of capital stock subscribed for by them was not paid up, as stated in the articles of association, nor because subh creditor, believing that the capital stock had been paid up, in good faith extended credit to the company.
    2. -: -: -: Fraud and Deceit. The creditor of a corporation, whose articles of association falsely stated that all its capital, stock was subscribed and fully paid up, cannot maintain an action for fraud and deceit against the incorporators, upon the theory that he read those articles, believed them and in reliance upon the representations made therein .as being true extended credit to the company, and such statements being false he was injured thereby.
    3. -: -: -: -: Purpose of Statutory Requirements. The statute (sec. 1312, R. S. 1899), requiring that the articles of association shall set out the amount of the capital stock of the corporation, that the same has been bona-fide subscribed, and that one-half thereof has been actually paid up in lawful money and is in the custody of the persons named as the first board of directors, prescribes the conditions precedent for obtaining a certificate .of incorporation from the Secretary of State and for obtaining a charter to do business in this State, but does not impose those requirements for the purpose of enabling the corporation, to procure credit from those who do business with it as such. ;
    4. -: -: --: Partners. It does not follow that because the incorporation of a company was a fraud upon' the State, it was likewise a fraud upon individuals having dealings with it. An individual having dealings with the corporation as such cannot maintain, as a ground for holding its in-' corporators liable to him as copartners, that their failure to pay for the stock issued to them, was a fraud upon him. If the company was a corporation, it was not a partnership; if a corporation, its stockholders are liable to its creditors to the ex-, tent of their unpaid stock, and the law affords a remedy to such creditors to enforce that liability. [Disapproving, on this ■point, ’Hyatt v. Van Ri¿er, 1’05 Mo. App. 1. c. 671.] ’

      5. -: -: -: -: Necessary Allegations and Proof. In order to hold one individual liable to another for fraud and deceit, it is indispensable to allege and prove the making by defendant of the representation, and that it was false, and either known by the party making it to be false, or so made as to imply that the maker knew it to he true, and that it was fraudulently made for the purpose of inducing defendant to give a credit which he would not otherwise have given; and it must be made to the defendant, or for the purpose of coming to his knowledge, or to the knowledge of a class of persons to which he belongs and thereby including him; and it must be alleged and proved that defendant relying upon it gave the credit which it was the purpose of the person making it to obtain. And the officers and stockholders of a corporation are liable for fraud and deceit upon the same grounds that individuals who are not incorporated are. But. statements made in the articles of association by them were addressed to the Secretary of State, and not to a subsequent creditor of the corporation, and if he had no knowledge that such statements were false at the time he extended it credit and did not extend it credit in reliance upon their being true, he cannot maintain an action against the incorporators for fraud and deceit.
    Appeal from Jackson Circuit Court. — Hon. W. B. Teasdale, Judge.
    Affirmed.

      H. W. Currey and B. W. Coleman for appellant.
    (1) The judgment of the court sustaining a general demurrer is erroneous if the facts stated in the petition authorize a recovery upon any theory. State ex rel. v. Edmondson, 71 Mo. App. 172. (2) The Constitution and statutes of this State require the capital stock of a manufacturing corporation to be paid in money or money’s worth, and forbids the issuing of stock or bonds of a corporation “except for money paid, labor done or property actually received;” and provides that all fictitious issue of corporate stock shall be void. Constitution, art. 12, sec. 8; R. S. 1899, sec. 962. And when a corporation is sent forth into the commercial world accredited by tbe incorporators with being possessed of a specified capital,' every person dealing with it, unless otherwise advised, has the right to extend credit to it on the faith of the fact that its capital stock has been paid and that the money, or its equivalent, in property, will be forthcoming to respond to his legitimate demands; and in this State, no countenance or toleration is given to the formation of a business corporation, except when all the capital stock has been bona fide and in good faith subscribed, and at least one-half thereof actually paid into the treasury in money or money’s actual equivalent at the time of the organization. And, whenever persons seeking corporative protection from individual liability have failed to comply with the statutory prerequisites made necessary to the obtaining of a corporate charter, and debts have been contracted by the incorporators in the name of the corporation on the faith that such prerequisites had been complied with, the court, while differing in naming the liability — whether in the nature of copartners or resting upon the ordinary principles of contract, and agency, or upon the grounds of fraud and deceit — have agreed in holding liable, for such debts, in some form, all who have engaged in the procuring of the charter of incorporation. Welchenberg v. Bank, 64 Fed. 90; Steam Stone Cutter Co. v. Scott, 157 Mo. 520; Hequembourg v. Edwards, 155 Mo. 514; Yancleve v. Berkey, 143 Mo. 109; Berry v. Rood, 168 Mo. 316; Patterson v. Arnold, 45 Pa. St. 410; McHose v. Wheeler, 45 Pa. St. 40; Barnes v. Beck, 83 G-a. 471; Farmers, etc., v. Floyd, 47 Ohio St. 525; Coal Co. v. Settle, 54 Kan. 424; Walton v. Oliver, 49 Kan. 107; Slocum v. Head, 105 Wis. 431, 50 L. R. A. 324; Bergeron v. Hobbs, 96 Wis. 614; Detroit Electrical Works v. Railroad, 29 S. W. 412; Water Works Co. v. Aspen, 5 Colo. App. 12.

      Gage, Ladd & Small and Frank Hagermcun for respondents.
   GANTT, J.

— This suit was begun February 4, 1902, by the plaintiff filing a petition in the office of the clerk of the circuit court of Jackson county, at Kansas City. The defendants were duly served and filed their demurrer to the petition, which said demurrer was sustained on the 20th of June, 1903, and final judgment rendered in favor of the defendants on June 27, 1903.

The facts stated in the petition are summarized by the plaintiff as follows:

“First. That on the 27th day of November, 1899, the defendants, and Frank Siegel and William Askew, signed and filed in the office of the recorder of deeds for Jackson county, and a certified copy thereof, subsequently, in the office of the Secretary of State, articles of association, and obtained a corporate charter, wherein it was specified that they were a body corporate, under the name of ‘ Siegel-Sanders Live Stock Commission Company. ’ That said articles of association specified: (a) That the name of the company should be Siegel-Sanders Live Stock Commission Company; (b) that the capital stock of the company should be $250,-000, divided into 2,500 shares of the par value of $100 each; (c) that all of said stock had been bona-fide subscribed and all thereof actually paid up, and was in the hands of the persons named as the first board of directors; (d) that defendant Frank Rockefeller had subscribed for 1,000 shares, that defendant Swain had subscribed for 500 shares, that defendant Matchette had subscribed for 250 shares, and that Frank Siegel had subscribed for 500 shares, and William Askew had subscribed for 250 shares.
“Second. That all of the capital stock was not, in fact, bona-fide subscribed and that one-half of .the capital stock was not, in fact, paid up.
“Third. That the subscriptions of Frank Siegel and R. D. Swain were not bona-fide but were simulated only.
“Fourth. That Siegel never paid any part of his subscription and had an agreement with the defendants that he was not to pay the same, and the same as to Swain.
“Fifth. That the incorporators agreed at the time of signing the articles of association that the capital stock should not be paid, but that they would obtain the charter and use it as a shield from individual liability.
“Sixth. That the defendants were named as the first' board of directors and were its officers, and that the company never had $250,000, nor one-half that amount.
“Seventh. That they dealt and contracted plaintiff’s debt in the corporate name.
“Eighth. That plaintiff, in good faith, believed the corporation had a paid-up capital of $250,000, and extended credit to the corporation on such faith, and parted with his money to the corporation, being deceived by the representation that the company had $250,000 capital paid up. And a prayer for judgment. We now ask the court to adjudge that the petition states a cause, and reverse and remand the case.”

I. The appeal in this case involves a number of the questions discussed and decided in First National Bark of Deadwood v. Rockefeller et al., reported at page 15 of this volume. The pleader in this case, however, alleges a perfect formal compliance by the defendants and Siegel and Askew with the statutes of this State, in procuring an incorporation of the SiegelSanders Live Stock Commission Company. It is not claimed in this petition that any of the original incorporators failed to acknowledge the articles of association, which were filed in the office of the recorder of deeds of Jackson county, and a certified copy thereof subsequently filed in the office of the Secretary of State; on the contrary, it is alleged that all of the steps prescribed by the statute as a matter of form were duly and literally complied with, and that a corporate charter was issued to them by the Secretary of State on the first day of December, 1899. But it is alleged in this case, as in the Deadwood Bank case, that all the capital stock of the said company was not in fact bonafide subscribed, and that one-half thereof was not in fact paid up, and that the incorporators agreed at the time of signing the articles of association that the capital stock should not be paid in full, and that plaintiff in good faith believing that the corporation had a paid-up capital of $250,000, extended credit to it on such faith, and parted with his money to the corporation, being deceived by the representation that the company had $250,000 capital paid up. Learned counsel for plaintiff does not charge anywhere in his petition that the defendants by reason of the aforesaid premises became and were copartners and liable to him as such. In fact, learned counsel ingenuously confesses that he has not named the cause of action upon which he' seeks to recover, but has left it to the court to denominate it. For the reasons assigned in First National Bank of Deadwood vs. these same defendants, it must be held that the defendants are not copartners and liable as such to the plaintiff merely because the full amount of the capital stock subscribed for by them in the original articles of association, was not paid up, either to the first board of directors at the time of the organization of the corporation, or into the treasury of said corporation at that time. The allegations of the petition on their face declare that the Siegel-Sanders Live Stock Commission Company was a de facto corporation by virtue of the articles of incorporation issued to it by the Secretary of State prior to the incurring of the debt, if any, for which plaintiff brought this action.

II. It remains then to be seen whether the action can be sustained upon the theory of fraud and deceit. If we grasp correctly the contention of the plaintiff on this point of the case, it is that as our statute (section 1312, Revised Statutes 1899), requires that the articles of association shall set out the amount of the capital stock of the corporation, the number of shares into which it is divided and the par value thereof, and that the same has been bona-fide subscribed and one-half thereof actually paid up in lawful money of the United States and is in the custody of the persons named as the first board of directors or managers, and that as the defendants and their associates stated in their articles of association that the capital stock of the Siegel-Sanders Live Stock Commission Company should be $250,000 and that all of said stock had been bona-fide subscribed and all thereof actually paid up, and was in the hands of the persons named as the first board of directors, and that as it is admitted that this statement in the articles was untrue, plaintiff was deceived by this representation made in the articles of association and parted with his money to the corporation. There is no allegation in the petition that the plaintiff knew at the time of advancing his money, as alleged, that the' company was or claimed to be a corporation under the laws of this State, or that he had any knowledge of the articles of association or the contents of them. But plaintiff insists that in dealing with said commission company, he was conclusively presumed to know of the required articles of association made, filed and recorded by the defendants and of the terms, provisions, statements and representations therein made by the defendants. But conceding that he had known of the filing of the articles of incorporation and had read them before giving credit to the company, and had given credit upon the faith of them, the question then arises whether upon these facts alone and the falsity of those statements as to the payment for the stock, he can maintain an.action as for fraud and deceit.

In Priest v. White, 89 Mo. 609, the action was for deceit against two of the original subscribers and incorporators of the Jackson Coal & Mining Company. The petition stated the indebtedness of the Coal & Mining Company to the plaintiff, and then alleged in substance that Bell and Hardin and two others each subscribed for $25,000 of stock in the said coal company and conspired together to cheat the corporation of its stock with a view of converting the same to their own use, and for the purpose of procuring money on worthless security; that having become officers of the corporation and there being no other stockholders, they had certificates of stock issued to themselves as paid-up stock, thereby claiming that the company had sold $100,000 of stock for cash at par, when nothing had been paid on the stock; that plaintiff gave credit to the corporation upon the belief that it had $100,000 invested in property and without notice that the stock had been fraudulently issued, and that by the said fraudulent acts, he was induced to part with his money. It appeared in evidence that as a matter of fact, the subscribers had turned over to the corporation property worth only about $12,000. The plaintiff in that case did not reduce his demand to judgment against the corporation, and the plaintiff in this case has not, nor did he seek to hold the defendants as owners of unpaid stock, nor did he proceed in equity to follow the money or property wrongfully abstracted or withdrawn by the officers or stockholders. This court, through Judge Black, among other things, said: “In the next place, if it he conceded to the plaintiff the most he can claim, and that is, that these incorporators committed a fraud upqn the corporation, still this does not give him, as a creditor, an action for fraud and deceit. The wrong was a wrong to the corporation, and not directed to any creditor or creditors. It might affect the credit of the company, bnt it does not follow that every creditor may sue tbe incorporators at law. ‘Tbe wrong committed by the officer of a corporation wbicb affects tbe stockholders generally, through their interests in tbe corporation, is not a wrong to them as individuals, but to tbe corporate entity.’ [Cooley on Torts, 518.] So, too, a wrong to tbe corporation wbicb may and does affect tbe credit of the company and tbe creditors generally is not a wrong to them as individuals, and they cannot maintain an action as for a tort.”

In Utley v. Hill, 155 Mo. 232, an action was brought by a depositor in tbe Bank of Slater against tbe directors thereof, to recover $8,000, lost by tbe failure of that bank. Tbe statute, then as now, required every banking corporation to furnish to tbe Secretary of State, when required by him, a statement, verified by tbe president and cashier and attested by three directors, of tbe actual condition of such corporation at tbe close of tbe business on tbe day designated. It also required this statement to be published in one or more daily newspapers published in tbe city or county where tbe bank was located, and in such a weekly paper, if there was no such daily, and a copy to be posted in tbe banking bouse accessible to all. It was alleged in that case that a false statement bad been made and published and that tbe same bad been posted in tbe banking bouse of tbe bank; that tbe plaintiff bad read it, and relying upon it, bad made bis deposit. It was held that tbe action could not be maintained for two reasons: That tbe duty of making tbe statement was a duty imposed by law, and that tbe law prescribed a punishment for tbe violation of it. Marshall, J., speaking for tbe court, said: “Nor can a false statement made by directors of a bank to tbe Secretary of State be made tbe basis of a common-law action for deceit. Tbe reason is plain. Tbe law exacts tbe statement; hence, it is not voluntarily made. Tbe statement is required to be made to tbe Secretary of State, so that he may take steps to close the bank if it is dangerous to the welfare of the people for it to continue business, but it is in no sense a statement made by the directors with intent to induce persons to deposit their money in the bank, and therefore a common-law action of deceit cannot be predicated upon it.”

In Hunnewell v. Duxbury, 154 Mass. 286, it appears that by the statute of Massachusetts every foreign corporation, before transacting business in the Commonwealth, was required to file with the commissioner a copy of its charter, a certificate of incorporation, and a statement of the amount of its capital stock and the amount paid in thereon to its treasurer, but if any part of such payment had been made otherwise than in money the statement must set forth the particulars thereof, and such statement must be subscribed and sworn to by its president and treasurer, and by a majority of its directors or others having the powers of directors. In that case the corporation was a foreign corporation, organized under the laws of Maine. It filed with the commissioner of corporations a certificate containing the above statements, duly sworn to. The plaintiff had taken notice of the contents of that certificate, and had it examined by an attorney whom he employed for that purpose, and he relied upon its statements in accepting the notes of the corporation. The statements were false and the notes proved worthless, and he sued the defendants in an action of deceit based upon the falsity of those statements. The Supreme Judicial Court of Massachusetts said: “To sustain such an action, misrepresentations must either have been made to the plaintiff individually, or as one of the public, or as one of a class to whom they are in fact addressed, or have been intended to influence his conduct in the particular of which he complains. This certificate was not communicated by the defendants, or by the corporation, to the public or to the plaintiff. It was filed with a State official for the definite purpose of complying with a requirement imposed as a condition precedent to the right of the corporation to act in Massachusetts. Its design was not to procure credit among merchants, but to secure the right to transact business in the State. The terms of the statute carry no implication of such a liability. Statutes requiring similar statements from domestic corporations have been in force here since 1829, and whenever it was intended to impose a liability for false statements contained in them there has been an express provision to that effect; and a requisite of the liability has' uniformly been that the person to be held signed, knowing the statement to be faise. . . To hold that the statute of 1884, chap. 330, sec. 3, imposes upon those officers of a foreign corporation who sign the certificate, which is a condition of its admission, the added liability of an action of deceit, is to read into the statute what it does not contain. If such an action lies, it might have been brought in many instances upon representations made in returns required of domestic corporations, and yet there is no instance of such an action in our reports. In Fogg v. Pew, 10 Gray 409, it is held that the misrepresentations must have been intended and allowed by those making them to operate on the mind of the party induced, and have been suffered to influence him. In Bradley v. Poole, 98 Mass. 169, the representations proved and relied on were made personally by the defendant to the plaintiff, in the course of the negotiation' for the shares the price of which the plaintiff sought to recover. . . . Nor do we find any English case which goes to the length necessary to sustain the plaintiff’s action. ... In the case at bar, the certificate was made and filed for the definite purpose, not of influencing the public, but of obtaining from the State a specific right, which did not affect the validity of its contracts, but merely relieved its agents in Massachusetts of a penalty. It was not addressed to or-intended for the public, and was known to the plaintiff only from the search of his attorney. It could not have been intended or designed by the defendants that the plaintiff should ascertain its contents and be induced by them to take the notes. It is not such a representation, made by one to another with intent to deceive, as will sustain the action. Its statements are in no fair sense addressed to the person who searches for, discovers, and acts upon them, and cannot fairly be inferred or found to have been made with the intent to deceive him.”

In Hindman v. First Nat. Bank, 112 Fed. 931, in the United States Circuit Court of Appeals, the facts were that under .the laws of Kentucky, any insurance company desiring to do business in the State could not begin business until all of its capital stock had been actually paid in any case, nor until the State insurance commissioner should be satisfied that this was the fact and should issue his license accordingly. On December 31, 1892, the insurance commissioner authorized the company to begin business and issued a certificate or license, which among other things certified that the company had a paid-up capital of $200,000, and a net surplus of $48,182.90, which is in cash and deposited in the First National Bank of Louisville as shown by the certificate of the cashier of said bank, and sworn to by the president and secretary of said company. The facts stated in the affidavit of the cashier and in the certificate or license, were false, and the plaintiff lost his money. Circuit Judge Lurton, for the court, among other things said: “To what extent did the plaintiff have a right to rely upon the truth of the representations contained in the cashier’s certificate? Some direct connection between the bank and the plaintiff in error in the communication of this certificate is essential to a recovery. If the statement was addressed to, and intended only to influence the action of, the State insurance commissioner in respect to the licensing of the insurance company, lie cannot sustain a recovery, even though he and others may have been led into the purchase of the shares of the insurance company as a consequence of the action of the insurance commissioner in admitting the company to do business upon the representation of the bank’s certificate. The plaintiff’s action, in the aspect of it now under consideration, is for fraud and deceit, and such an action must be bottomed upon false representations made to him, and with intent that he should be influenced thereby. The plaintiff does not sufficiently connect himself with the misrepresentations by the bare fact that he bought stock in a company which was improperly admitted to do business upon representations addressed to the State commissioner. The injury in such a case is too remote. In Bedford v. Bagshaw, 4 Hurl. & N. 538, an action was sustained against certain promoters and managers of a company who had made false statements in respect to the capital of the company in order to secure its insertion in the official lists of the stock exchange. The plaintiff, knowing that the rules of the stock exchange admitted no stocks to its lists until two-thirds of the shares had been paid up, bought on the exchange in reliance that the shares so bought had been paid up accordingly. This proving not to be the case, the plaintiff was suffered to recover, although the false representation had been made to the committee of the stock exchange, and not to the plaintiff directly. That decision was subsequently overruled in Peek v. Gurney, L. R. 6 H. L. 377. Lord Chelmsford, in commenting on the decision, said: ‘The action was brought upon the allegation of a false representation made to the plaintiff. But no representation at all was made which reached either his eyes or his ears. Prom his knowing the rules of the stock exchange, he assumed that a certain representation had been made, and acted upon it, ’ In Peek v. Gurney, a descriptive prospectus was put forth by directors of a company, in reliance upon which the plaintiff bought shares on open market. It was held that the prospectus in its terms was not an invitation to the public ultimately to become holders of shares, but to join the company at once by becoming original allottees of shares, and that only those drawn in by the misrepresentations of the prospectus to become allottees could have a remedy in action for the deceit. In line with Peek against Gurney, is the case of Hunnewell v. Duxbury, 154 Mass. 286.” After stating the substance of the decision of the Massachusetts court, which we have already noted, the learned judge proceeds to say, in Hindman v. Bank: “The Kentucky statute carries no implication of civil liability for a false statement, although it does make the giving of a false statement to the commissioner a criminal offense. The right of one of the public who has sustained a loss by the wrongful setting on foot of an insurance company whose capital has not been paid in, and of one who has bought shares or given credit to such a company in reliance upon the truth of representations made to the commissioner only for the purpose of inducing his action, must depend upon the general principle of law in respect of actions for false representations. It has never been a ground of action that the defendant made a dishonest representation, and that the plaintiff had relied upon it and sustained injury. The moral obligation to speak the truth is not ground for a civil action, unless the misrepresentation was intended to induce the very action by the plaintiff which has resulted in his damage. [Cooley on Torts, chap. 493; Wells v. Cook, 16 Oh. St. 67; Barry v. Croskey, 2 Johns. & H. 1.] However lamentable the eventual results of a dishonest representation to persons who in reliance thereon have come to grief, they cannot recoup such losses unless they are able in one way or another to bring themselves within the class of persons for whpm the representation was intended. ’ ’

Applying the principles of these cases, our own as well as those of the Massachusetts court and the Federal and English courts, it must he held that the certificate made by the incorporators to the Secretary of State and the facts therein stated, are made for the purpose of complying with the requirements of our laws, imposed as a condition precedent to the obtaining of a charter to do business as a corporation in this State, and not for the purpose of procuring credit from those who may do business with the corporation as such. And the foregoing cases and what we have said here in no sense conflicts with those cases in which the directors or officers of corporations have been held liable for fraud and deceit on account of false representations made as to the solvency of such corporations subsequently to their incorporation by which creditors are defrauded. Of this latter class of cases may be mentioned Steam Stone Cutter Company v. Scott, 157 Mo. 520. In that case the petition alleged that after said corporation was incorporated and the certificate issued as aforesaid and after the stock was paid for in a fraudulent manner aforesaid and in no other way, the defendants falsely and fraudulently represented to the plaintiff that said stock of said corporation had been bona-fide and fully paid up, when the said defendants then and there well knew that said stock had never in fact been paid by .them or either of them, but that such payment was a mere pretense and sham, and upon the faith of the truth of such representations the plaintiff sold and delivered to said corporation goods, wares and merchandise in payment of which debt the said corporation executed to the plaintiff the notes sued on. In that case it was said by this court: “Besides, under the allegations of the petition and the findings of the court the defendants are liable independent of the statute, upon the ground that they made false representations upon which they induced the plaintiff to give the credit to the corporation that resulted in the debts sued for. Under that theory the defendants are jointly and .severally liable at common law, although one or more of them may not have been indebted- at all to the corporation.” It is clear from the report of that case that this court, in speaking of the false representations, had no reference to the representations contained in the articles of association, but to the letter written to them after the incorporation in which the defendant stated that the company was incorporated August 1, 1889, on a fully paid-up capital of $70,000.

In First National Bank of Deadwood v. Rockefeller, we have had occasion to pass upon the effect of a false statement in the articles of association that the stock had all been bona-fide subscribed and all paid up, and what effect such statement had upon the granting of a charter by the Secretary of State- or other department of the government authorized so to do. From the great weight of authority we reached the conclusion that while such a statement was a fraud upon the State and would justify the annulling and forfeiting of the charter by a direct proceeding on the part of the State, a creditor -dealing with such a de facto corporation thus organized could not inquire into and assail the corporate existence on that ground in a collateral proceeding like the present. But our attention is called in this case to the decision of the Kansas City Court of Appeals in Hyatt v. Van Riper, 105 Mo. App. 664, l. c. 671, wherein that court discussed the liability of the incorporators to be held liable as copartners. It was conceded in that case that there were no- actual false representations made by the defendant to the plaintiff as to the capital stock having been fully paid up to induce the latter to enter into the contract, but the court in that case said: “The defendants in procuring, the incorporation without having paid any part of their subscriptions to the stock of the corporation no doubt committed a fraud upon the State for which upon the hearing of a writ of quo warranto its charter would be annulled, but its existence as a corporation can not be inquired into in this proceeding. If, however, its incorporation under the circumstances was a fraud upon the State, it was likewise a fraud upon third persons having dealings with it. And to so hold would in no sense be challenging its corporate existence. It is not a party to the suit, and notwithstanding plaintiff says it has no corporate existence, we think differently.” Accordingly the conclusion was reached that upon this ground alone the defendants could be and were held liable as copartners.

Unquestionably the learned Court of Appeals, in our opinion, was correct in holding that a failure to pay any part of their subscriptions to the stock by the incorporators, was a fraud upon the State, for which the State, in a direct proceeding, might have the charter annulled. It was also correctly held in that case that the existence of the corporation could not be inquired into in that collateral proceeding. But we cannot give our assent to the remaining proposition, in the language quoted above, to the effect that because the failure to pay the full amount of their subscriptions was a fraud upon the State it was likewise a fraud upon third persons having dealings with it, if, by this, it is meant that any individual dealing with the corporation as such, could allege such failure by the incorporators to pay their subscriptions to stock, as a ground for holding the incorporators liable as copartners to such third person upon the sole ground that such failure to pay them was a fraud upon him. On the contrary, the great weight of authority is to the contrary. We have fully reviewed the authorities on this subject in First National Bank of Deadwood v. Rockefeller, and reached the conclusion that the rule is well established that the courts are bound to regard a company, incorporated according to all the required forms of law, as a corporation so far as third parties are concerned, until it is dissolved by judicial proceeding on behalf of the government which created it. If a corporation, it is not a partnership; if a corporation, its members are liable to creditors of the company to the extent of their unpaid stock, and in this State various remedies are provided, as pointed out in the Deadwood Bank case, to enforce that liability. We accordingly find ourselves unable to agree with our brethren of the Kansas City Court of Appeals on this point, and with all due respect to the members of that court, so much of that' opinion as holds that the incorporators may be charged as partners in a collateral proceeding by a creditor of the company, on the sole ground that a failure to pay for their stock for which they have subscribed is a fraud, is disapproved to that extent. As said in Berry v. Rood, 168 Mo. l. c. 331: “But when they attempt to hide their individual liability in a corporation and launch upon the business community a company which they proclaim as solemnly as men can proclaim anything. has a full paid-up capital of $300,000 and invite confidence accordingly, when they well know that, so ■far as then developed, it has not five per cent of the amount available for use in the treasury, they violate both the letter and spirit of our laws on this subject arid rfeuder themselves individually liable, to creditors who have been misled, to the extent of their unpaid stock.” As held in Hindman v. Bank, 112 Fed. 931, the officers and stockholders of corporations are liable for actions of deceit upon the same grounds that individuals who are not incorporators are liable. In order to hold one individual liable to another for fraud and deceit, it is indispensable to allege and prove the making by the defendant of the representation, and that it was false and either known by the party making it to be false, or so made as to imply that the maker knew it to be true, and that it was fraudulently made for the purpose of inducing the party complaining to give a credit which he would not otherwise have given; that it was made to the party complaining or made for the very purpose of coming to his knowledge or that of a class of persons to which, he may belong and thereby including him, and that relying upon it he gave the credit which it was the purpose of the person making it to obtain. As already said, the representation upon which this action is founded was made in a statement required by law for the formation of a. corporation. It was not made to the plaintiff and it is not even alleged in the petition that the plaintiff knew, at the time of advancing his money, that the company was, or claimed to be a corporation under the laws of Missouri, or that he had any knowledge of the articles of association or the contents of them, but even if he had, the representations made in those articles were not addressed to the plaintiff, but to the Secretary of State for the purpose of forming and perfecting a corporation, and the great weight of authority is that an action for fraud and deceit cannot be predicated upon a statement or representation thus made for the purpose merely of obtaining a certificate of incorporation.

The circuit court properly sustained the demurrer . to the petition and its judgment is affirmed.

Burgess, P. J., and Fox, J., concur.


author: FOX, J.

text:
    KELLEY, Plaintiff in Error, v. LAWRENCE et al.
    Division Two,
    March 29, 1906.
    1. NEGLIGENCE: Master and Servant: Appliances: Undesigned Use.. The master is not liable for the negligent and careless use by the employee of appliances provided for him, or for injuries caused by the use of such appliances for a purpose for which they were not intended or designed.
    2. -: -: -: -: Viaduct Over Alley: Sitting On Banister. Defendants were the owners and lessees of a double-store building separated by an alley sixteen feet wide between the stores. Between the stores, on a level with the second floor or upper story, ran a bridge or viaduct, four feet wide, and guarded on each side hy a railing or hanister made of pieces of lumber two by four inches. Plaintiff, in the employ of the lessees as a salesman, crossed over the bridge from the main store, to the floor or room at the other end of the bridge, where were kept buggies, for the purpose of. showing and selling a buggy to a customer. Having shown him the huggy, but not having effected a trade, he came out on the passage way with the customer, and lingered there in talk about the trade, and sat down upon or undertook to sit down upon the railing. It gave way, he was precipitated to the rock road beneath and was injured. HeZd, that the railing was not designed to sit upon, and plaintiff’s injuries were due to his own carelessness and negligence, and he cannot recover.
    Error to Daviess Circuit Court. — Hon. J. W. Alexander, Judge.
    Affirmed.

      G. W. Bolster and Harter & Knight for plaintiff in error.
    (1) Regardless of what may be said as to tbe liability of Crain, there is no reason why tbe rule that “tbe master is bound to take ordinary and reasonable care not to subject bis servant to unreasonable, extraordinary dangers by sending bim to work in dangerous buildings, or dangerous premises, or with dangerous tools, machinery or appliances, and if failing in bis duty in any of tbe respects mentioned and tbe servant in consequence thereof is injured, tbe master is liable therefor,” should not apply to tbe employers of plaintiff, Lawrence and Enyeart. It was their duty, of course, to exercise reasonable care to see that tbe premises upon which they required plaintiff to work on or about, i. e., tbe crossing or viaduct, was in a condition of reasonable safety for such use and work. Muirhead v. Railroad, 103 Mo. 251; G-utridge v. Railroad, 105 Mo. 520; Henry v. Railroad, 109 Mo. 488; Rutledge v. Railroad, 119 Mo. 312, 123 Mo. 121; Gorham v. Railroad, 113 Mo. 408; Minnier v. Railroad, 167 Mo. 99; Zellars v. Railroad, 92 Mo. App. 107; Weldon v. Railroad, 93 Mo. App. 668; Steinhauser v. Sproul, 114 Mo. 557. This duty was an imperative and continuous one. Rodney v. Railroad, 127 Mo. 676; Suttle v. Railroad, 127 Mo. 336; Gorham v. Railroad, 113 Mo. 408.- (2) It was not the duty of plaintiff to seek for any defects in the viaduct, hut having no knowledge to the contrary, he had the right to assume that defendants had discharged the duty the law exacted of them towards him- for his protection. Turner v. Drake, 71 Mo. 286; Reber v. Tower, 11 Mo. App. 199; Porter v. Railroad, 71 Mo. 66. (3) There is no evidence to in any wise warrant the taking of it from the jury by reason of any contributory negligence or assumption of risk upon the part of plaintiff. Hurst v. Railroad, 163 Mo. 309; Thompson v. Railroad, 86 Mo. App. 141; Herbert v. Shoe Co., 90 Mo. App. 305; Pauek v. Dressed Beef & P. Co., 159 Mo. 467, 166 Mo. 639; Zellars v. Light Company, 92 Mo. App. 107. (4) The viaduct being erected as it was over a public alley of the city, and no authority being shown therefor, and the burden of showing such authority, if any there was, being upon defendants, and said viaduct having been erected by Crain prior to tenancy of his co-defendants, he is also liable with the other defendants. Pope v. Boyle, 98 Mo. 52.

      Boyd Dudley for defendants in error.
    (1) The master is not liable for a servant’s unauthorized use of a tool, appliance or place, which are safe and suitable for the purposes intended, but which we used by the servant for some purpose of use for which they were not intended and the servant is injured thereby. Moran v. Brown, 27 Mo. App. 490; The Persian Monarch, 5 C. C. A. 117,14 IT. S. App'. 158, 49 Fed. 669; Butterworth v. Clarkson, 22 N. Y. Supp. 714; Ryerson v. Bathgate, 2 Am. Neg. Rep. 300; 20 Am. and Eng. Ency. Law (2 Ed.), 78, 141; York v. Railroad, 117 Mo. 405. The viaduct had been used for years without accident by persons for the purpose for which it was intended. The plaintiff had been in the wareroom with his customer, in a safe place, had just come out of the wareroom door, and voluntarily left a safe place, either on the wareroom floor or viaduct floor, to sit down on a weak rail. His daily use and constant observation, as shown by his own evidence, was bound to bring home to him a conviction that it was not strong enough to support his weight. He. left a safe place to sit down on a frail banister that he knew was not intended to sit on, and he was not required to sit on, and that his employers did not want him to sit on, and having voluntarily left a safe place for one of danger, without thought, careless of his own safety, and negligent of the danger, he cannot recover. (2) The demurrer was properly sustained, because, where the plaintiff’s own evidence establishes contributory negligence, there is no disputed fact for the jury to pass upon, and the plaintiff should be nonsuited, or the jury directed to return a verdict for the defendant.' Roberts v. Tel. Co., 166 Mo. 370; Hudson v. Railroad, 101 Mo. 13; Milburn v. Railroad, 86 Mo. 104; Schlereth v. Railroad, 96 Mo. 509; Stone v. Hunt, 94 Mo. 475; Buesching v. Gas Co., 73 Mo. 219. (3) In the absence of a covenant, the landlord is under no' obligation to repair the premises during the course of the tenancy. Nor is he liable to the tenant for injuries resulting to him from failure to repair. In the absence of contractual obligations, the landlord, as to his tenant, is only liable for acts of misfeasance and not of nonfeasance. Roberts v. Cottey, 100 Mo. App. 503; Whiteley v. McLaughlin, 183 Mo. 160; Rogan v. Dockery, 23 Mo. App. 313. The same rule applies to a member of the tenant’s family or his employees. Whiteley v. McLaughlin, 183 Mo. 160; 18 Am. and Eng. Ency. Law (2 Ed.), 238; O’Brien v. Capwell, 59 Barb. (N. Y.) 497; Jaffe v. Hartman, 56 N. Y. 401; Quay v. Lncas, 25 Mo. App. 4. As a general rule, the landlord is not liable for injuries to third persons during the tenancy, from the defective repair of the demised premises. 18 Am. and Eng. Ency. Law (2 Ed.), 238; Quay v. Lucas, 25 Mo. App. 4; Ward v. Pagan, 28 Mo. App. 116; Mayer v. Schrumpf, 85 S. W. 915; Roberts v. Cottey, 100 Mo. App. 500; Peterson v. Smart, 70 Mo. 34. Where, at the time of the letting, the premises are in a proper state of repair, and they are permitted by the tenant to get into a condition dangerous to the public or third persons, the landlord is not, as a general rule, liable to third persons for injuries caused therefrom during the tenancy. Deutsch v. Abeles, 15 Mo. App. 398 ; Pope v. Boyle, 98 Mo. 527; Stoetzele v. Swearingen, 90 Mo. App; 588. Unless there is an express covenant on the part of the landlord to repair, he is not bound to keep the premises in repair. Yai v. Weld, 17 Mo. 232; Morse v. Maddox, 17 Mo. 574; Burnes v. Fuchs, 28 Mo. App. 2791; Ward v. Fagan, 101 Mo. 669; Gordon v. Peltzer, 56 Mo. App. 602; O ’Brien v. Capwell, 59 Barb. 497; Roberts v. Cottey, 100 Mo. App. 500; Rogan v. Dockery, 23 Mo. App. 313; Mayer v. Schrumpf, 85 S. W. 915.
   FOX, J.

— This cause is here upon a writ of error sued out by the plaintiff for the purpose of having the judgment and proceedings of the Daviess Circuit Court, in the above cause, reviewed by this court.

This is an action for personal injuries, and is predicated upon substantially the following state of facts:

On the 22d day of March, A. D. 1900, and prior thereto, defendants M. W. Lawrence and John J. Enyeart were engaged in the sale of hardware, implements, buggies, etc., at Gallatin, Daviess county, Missouri. The hardware was kept in the first floor of the building on the east side of the square, and the buggies, after being uncrated and ready for sale, were kept in the second story of the building across the alley some sixteen feet from the the main store building. This room was known and used as the buggy salesroom. In the lower part of this last-mentioned building were kept implements of various kinds. The entrance to the salesroom was had by porch and steps at the east end of the hardware-room, connecting with a viaduct and this viaduct extending from said storeroom building to the salesroom, across the sixteen foot alley before mentioned. This viaduct or passageway was built and used for a passage or walkway from said main store building to the buggy-room for the purpose of employees of said defendants engaged in the showing and selling of the buggies to make use thereof in passing to and fro with customers. It had been erected as early as 1898, during the occupancy of a Mr. Pierce, and was built by the use of three stringers or sleepers running across the alley from the stairway to the building in which the buggies were situated, a floor about four feet in width of pine lumber being placed upon these sleepers, and a railing or banister of two by four pine lumber about two and one-half feet high being placed on either side thereof. It was not fastened at the stairway'. It had been nailed to an upright piece on the implement building, and was fastened in the middle by being nailed to an upright piece running from said sleepers. It was about sixteen feet from this viaduct to the surface of the alley below. This alley had been macadamized, at least a large amount of rock had been placed therein prior to the date of plaintiff’s injury. The. buildings and viaduct before mentioned were the property of defendant Thomas Crain, and leased by him to the defendants Lawrence and Enyeart. On the 22nd day of March, 1900, the two last-named defendants employed the plaintiff as general salesman for hardware, implements and buggies. Plaintiff continued in said defendant’s employ until the 16th day of July, 1900, at which time he went with Mr. Cyrus Musselman from the general salesroom to the buggy-room, by means of tbe viaduct before mentioned, for tbe purpose of showing, and if possible selling to Mr. Musselman a buggy. After examining tbe buggies, remaining in tbe buggy-room from ten to twenty minutes in so doing, Mr. Musselman proposed exchanging bis old buggy for one shown him by plaintiff. Mr. Musselman and plaintiff started to leave tbe buggy-room by means of tbe viaduct; upon reaching tbe viaduct plaintiff baited, and while discussing tbe buggy deal with Mr. Musselman, started to sit down, or did sit ■down, be is not positive which, upon tbe railing on tbe south side of this viaduct, and while making use of tbe viaduct in that manner, tbe railing or banister gave away, plaintiff and railing or banister falling from said viaduct to tbe surface of tbe alley below, by reason of which fall be was injured.

Tbe negligence complained of is thus stated in the petition: “That on tbe 16th day of June, 1900, de-. fendant Thomas Crain was tbe owner of tbe buildings occupied by said defendants Lawrence and Enyeart in conducting their said business, and was for a long time prior and a long time after said date tbe owner thereof, and tbe landlord and lessor of said firm for tbe said purpose of conducting said business.

“That it was tbe duty of said Crain as said landlord and lessor, and tbe defendants Lawrence and Enyeart as well, to put tbe said premises and keep tbe same in reasonably safe condition for tbe purpose and use for which they were let to and used by said defendants Lawrence and Enyeart, their agents and servants.

‘ ‘ That tbe buildings occupied and used by said last-named defendants Lawrence and Enyeart, in conducting their said business, consisted of two two-story buildings with a stone-paved alley or passageway between ■the same. That tbe upper stories of tbe said two buildings were used by said defendants as storage and salesrooms in and about their said business, and connection was had and passage was made from one to the other of said upper-story rooms of said buildings by means of a wooden viaduct, bridge, or passageway placed there for that purpose and so maintained and used by said defendants as owner and lessor and users and tenants as aforesaid.

“That it was the duty of said defendants Lawrence and Enyeart, and of said Crain as well, to see that said viaduct, bridge, or passageway was in a reasonably safe condition, for which, as they and each of them well knew, it was to be, and was so used, and keep the same in such reasonably safe condition for such use.

‘ ‘ The plaintiff was in the month-----, 1900, and a short time prior to the 16th day of June, 1900, employed by defendants Lawrence, and Enyeart, as clerk and salesman in and about their said business and entered upon the discharge thereof.

“ That on the said 16th day of June, 1900, the said viaduct, bridge or passageway was in a rotten, unsafe and dangerous condition for use for the purpose for which it was let and used, which rotten, unsafe and dangerous condition all of said defendants well knew, or by the exercise of reasonable diligence might and would have known. . . . That the part thereof which by reason of its said condition gave way and caused plaintiff’s fall as aforesaid, was the guard-rail or banister and rotten parts thereon unknown to plaintiff, all of which were rotten, insecurely fastened and unsafe.”

To this charge of negligence the defendants filed the following answer:

“Come now defendants and for their amended answer to plaintiff’s petition herein deny each and every allegation therein contained.
“Further answering, defendants say that plaintiff’s injuries, if he was injured, were caused by the breaking of a certain guide-rail, built of light two-by-four-inch pine stuff, the purpose thereof being to mark the sides of a certain bridge or viaduct constructed across the alley, and connecting the store or salesroom in which defendants Lawrence and Enyeart were doing business and the wareroom in which their surplus stock was stored; that said bridge or viaduct was built solely as a passageway between said storeroom and ware-room; that said guide-rail was not built to sit on or lean against, but was built and solely intended as a guide-rail to mark the sides of said bridge or viaduct to prevent persons thereon from walking thereoff; that plaintiff had been employed for a long time, to-wit, about six months, by said defendants Lawrence and Enyeart; that during all that time he had worked in and about said premises and well knew that said guide-rail was built solely for the purpose of preventing persons on said bridge or viaduct from walking thereoff, and solely to mark the sides thereof, and well knew that said guide-rail was not built or intended as a seat to sit upon, or to bear weight;-that said plaintiff had daily opportunity to see and observe said guide-rail; that he knew or by the use of ordinary care might have known the condition thereof; and that the defects therein, if any, were fully apparent to him; that his opportunity for knowing the condition thereof was equal to that of defendants, and that at the time of the injury, if any, plaintiff was sitting and bearing his weight on said rail, well knowing at the time that it was not constructed for or intended for that purpose.
“And for further answer defendants say that plaintiff’s injuries, if any he received, were due to and 'caused by plaintiff’s own negligence, carelessness and want of due care contributing thereto.
“And having fully answered, defendants ask to go hence with their costs in this behalf laid out and expended. ’ ’

It is unnecessary to give a detailed statement of the testimony. It will suffice in order to dispose of the legal propositions presented, to say that the testimony of plaintiff tended to establish the facts as heretofore indicated, upon which this action was predicated.

It is conceded by plaintiff in error that the plaintiff testified in this cause substantially as follows, as to this accident: Pie said: “In standing there talking to Mr. Musselman about the buggies I backed up against the banister and I started to sit down and may have got down, . . . still talking, you understand, not thinking that I was going, and over it went. I went over backwards into the alley. ... I could not say positively that I sat on- the railing. I know I started to sit down and may have gotten my weight on the railing. I was talking to Mr. Musselman about the buggy deal and was not thinking of anything else. ... I never looked to see whether the banister was cracked or split. If I had taken the pains to have examined it, I could have seen, but I never thought about doing it. . . . I don’t absolutely know whether I sat down on the banister or not. Know I started to and that it broke. .... I know I started to sit down and might have gotten my weight on the banister. Would not swear that I did not.....About selling that buggy was what I had in my mind. . . . There was nothing hidden about it that I could not have seen if I had wanted to examine it. But I did not do it. Supposed that the place was safe. It was not absolutely necessary for me to sit down there in discharging my duties. It is true that they were not paying me a salary to go out there and sit on that railing. I did not know anything about whether it was put there to sit on. Of course, it was not put there for a seat. Did not think about that. Was not discussing in my mind as to whether this thing was put there to sit on or not to sit on. The fact is that it was there and I backed up against it to sit down on it, just like any other man would have done under the same circumstances. I know and you know that any other' man would have done just as I did under the same circumstances. . . . Nobody directed me to sit down.. I did not direct myself. ... I just simply backed np against it like that, and it struck me along here, and I was talking buggy. And I may have got down, I don’t say that I did or did not, and I went down.”

At tbe close of plaintiff’s evidence tbe court sustained a demurrer to tbe evidence, as requested by defendants, and instructed tbe jury that plaintiff was not entitled to recover. Plaintiff took a nonsuit, with leave to move to set tbe same aside, and judgment was rendered in favor of defendants.

Plaintiff in proper time filed Ms motion to set aside tbe judgment of nonsuit and for a new trial, wbicb motion was by tbe court overruled.

Upon tbe judgment as heretofore indicated plaintiff sued out of tMs court a writ of error, and the cause is now before us for consideration.

OPINION.

The record in this case presents for our consideration but one legal proposition, and that is in respect to the action of the court in sustaining the demurrer to the evidence interposed by defendants at the close of plaintiff’s case.

Plaintiff in this action seeks to recover damages for personal injuries received while in the employ of defendants by the use of a viaduct provided by defendants in the transaction of their business. This viaduct or passageway was used by defendants for a passage or walkway from their main store building to the buggy-room; it was built across an alley or open space about sixteen feet and was used by the employees of the defendants in going to and from the main building to the room in which buggies were kept in showing and selling to customers buggies located in that room. It was erected in 1898 during the occupancy of the premises by a Mr. Pierce ; it was built by the use of three stringers or sleepers running across the alley to the storeroom or building in- which the buggies were situated. The floor of this viaduct was about four feet in width, being made of pine lumber placed upon these sleepers or stringers, and there was placed on either side of the viaduct a railing or banister, made of two-by-four pine lumber and this banister or railing was about two feet and a half high. Plaintiff, on the day that he was injured, went with Mr. Musselman from the salesroom to the buggy-room over this viaduct for the purpose of showing and selling him a buggy; they were in the buggy-room a short time and started to leave it, returning by way of the viaduct. Upon reaching the viaduct, plaintiff still talking to Mr. Musselman about the buggies, undertook to sit down or at least started to sit down upon the banister or railing on one of the sides of the viaduct; the banister or railing not being sufficient to support his weight, gave way, and he- received injuries of which he is complaining in the petition filed in this cause. Upon this state of facts we are simply confronted with the question as to whether the trial court properly or improperly sustained the demurrer to the evidence interposed in this cause.

We have carefully considered the disclosures of the record before us and have read in detail all of the testimony developed at the trial, and we are unable to conceive upon what theory plaintiff can maintain this action, and have reached the conclusion that the court very properly sustained the demurrer to the evidence. It will be observed that in the statement of the cause in the petition the plaintiff alleges that this viaduct was rotten and unsafe, and by reason of the negligence of defendants in failing to keep it in proper repair the plaintiff received the injuries complained of; but when we reach the testimony upon which the plaintiff seeks a recovery, the record is absolutely silent as to any defect in the viaduct which caused his injuries, except the defect in the banister or railing. It is not pretended in this case that the injuries complained of resulted from any defective, rotten or unsafe condition of the part of this viaduct upon which plaintiff had to walk in order to reach the buggy-room or in returning from it, but it is earnestly urged that he is entitled to recover by reason of the defective condition of the banister or railing which gave way, under the circumstances detailed by him in his testimony.

There is no dispute as to the rules of law applicable to the relation of master and servant. The law upon that subject is firmly established by the uniform and unbroken line of decisions in this State. That it is the duty of the master to use reasonable care and prudence for the safety of those in his service in providing them with machinery and appliances reasonably safe and suitable for their use, and that the master will be held liable for any injury from any accident that may happen through any defect in the machinery or appliances provided by him for the use of his servant, which was or ought to have been known to him, no one will seriously question. On the other hand, it is equally well settled that the master is not liable for the negligent and careless use of appliances provided for him by the master, or in using such appliances in a manner or for a purpose for which they were not intended or designed.

Applying these well-settled rules of law to the conceded facts in this case, there is no escape from the conclusion that whatever injuries plaintiff received were the result or his own carelessness and negligence in the use of a part of an appliance provided for him by the defendants.

The floor of this viaduct was four feet wide, and it was such floor that was designed as the passageway or walkway for the use of employees in going to the buggy-room or returning therefrom, and so long as plaintiff was walking upon this floorway or standing upon it he was entirely safe, and it was not until he undertook to improperly use the banister or railing which was placed on either side of this walk, for a purpose for which such banister or railing was not intended or designed, that he was in any danger of being injured. That this railing or banister on either side of this viaduct was not placed there to be used as a seat or resting place for employees in using such viaduct, is too plain for discussion. No,one will seriously contend that, in the placing of that railing or banister on either side of the viaduct, it was designed for any other purpose than simply a guardrail and to prevent those who should use the viaduct in an ordinarily careful manner from being hurt. That plaintiff knew that this railing or banister was not intended for the purpose of a seat or resting place by persons going backward and forward over the viaduct is not disputed, for he says in his testimony, in speaking of this railing or banister, “Of course it was not put there for a seat.” It being conceded by plaintiff that this railing or banister was not placed on either, side of this viaduct to be used as a seat, it must be held that if he undertook to use it for a seat and sat down upon it, or attempted to sit down upon it, he did so at his own risk, and any injuries received by him by reason of such improper and careless use of such railing or banister cannot be made the basis of a complaint that such injuries were the result of the negligence of his employers.

In order to maintain this action the negligence of the defendants must be the proximate cause of the injury, and when we look to the evidence as to what was the proximate cause of this injury, there is but one answer, and that is the improper, careless and negligent use of a railing or banister by the plaintiff for a purpose not intended or designed in the erection of such railing or banister.

In York v. Railroad, 117 Mo. 405, it was ruled by this court that the plaintiff was not entitled to recover for injuries received in the use of a push-car in a manner and for a purpose for which the car was not intended or designed, and this court, in announcing its conclusion in that ease, said: “The death of deceased was not caused hy any defect or deficiency in the car affecting its safety when used in the usual manner and for the purposes for which it was designed, and there was no negligence on the part of the defendant in ordering its use. ” So it may be said in the case at bar,' that the injuries received by plaintiff were not caused hy any defect or deficiency in the viaduct affecting its safety when used in the usual manner and for the purpose for which it was designed, hut such injuries, as is clearly disclosed by the testimony of the plaintiff, were received by reason of the improper and careless use of a banister or railing on the side of the viaduct for a purpose for which such banister or railing was neither intended nor designed. •

In Sindlinger v. Kansas City, 126 Mo. 315, plaintiff sought a recovery from the defendant city for injuries received hy reason of a defective railing or banister on a viaduct in one of the streets of said city. Gantt, J., speaking for this court, in that case, very clearly indicated the views of this court as to the purposes of a railing or banister on the side of a viaduct. He said: ‘ ‘ The railing was put there as a warning of the danger and to prevent those who should use the viaduct in an ordinarily careful manner from being hurt. It will be remembered that the way was constructed solely for pedestrians. It was not to .he supposed that grown-up men would expect to propel themselves against it in running races, and of course was not constructed with such a view. But that it was entirely sufficient for the purpose for which it was erected we think clearly appears, not only from the plaintiff’s evidence, but was abundantly established hy that of defendant.” So it may he said in the case at bar, that in the placing of this railing or banister on the sides of this viaduct it was not to he supposed that employeés or any other person using it, would expect to use such railing or banister as a place to sit upon and rest, for it was certainly apparent to any person of ordinary intelligence in using it that such railing or banister was not constructed for the purpose of furnishing a seat or resting place for anybody. Such railing or banister on the sides of the viaduct now under consideration was clearly placed there for no other purpose than a guard-rail or to mark the limits of that part of the viaduct within which persons might safely travel and to furnish a warning of the danger.

In Stickney v. City of Salem, 3 Allen 374, the Supreme Court of Massachusetts, in an opinion by Chief Justice Bigelow, held that the city was not liable in damages to one who, while stopping in a highway for the purpose of conversation, leaned against a defective railing and was injured. He said: ‘ ‘ The legal obligation of keeping a sufficient railing upon a highway is imposed only when it is necessary to mark the limits of the part of the road within which persons may safely travel, or to furnish a guard against dangerous places, so that proper protection may be afforded to those who, in the exercise of due care as travelers, while passing or standing on the way, might otherwise be exposed to accident or injury;” and a demurrer to the evidence was sustained.

We see no necessity for pursuing this subject further. The plaintiff in this cause, as disclosed by the evidence preserved in the record, was entirely familiar with the use of this viaduct; he used it frequently for a considerable length of time; he concedes that he knew that this railing or banister was not placed on the sides of the viaduct to be used as a seat or a resting place, and that it was not intended or designed for that purpose ; hence the use of it by him in the manner disclosed by the evidence, which resulted in the injuries complained of, must be attributed to his own carelessness and negligence, and this being so, the defendants should not be beld liable for snob injuries, and tbe court properly sustained tbe demurrer to tbe evidence interposed by defendants at tbe close of tbe plaintiff’s case.

Tbe judgment in this ease should be affirmed, and it is so ordered.

All concur.


author: BURGESS, P. J.

text:
    MARY J. McCORMICK v. ELSIE F. PARSONS et al., Appellants.
    Division Two,
    March 29, 1906.
    1. APPEAL: Equity Cause: Admission or Rejection of Evidence. The action of the court in admitting evidence over the objection of appellant, or its failure to pass upon objections when made, in an equity cause, will not justify a reversal. In an equity cause, improperly admitted or rejected evidence will be disregarded on appeal. So that where appellant at the trial objected to the admission of various records and proceedings in former suits involving the same subjects in litigation, the failure of the chancellor to then and there pass upon the objections and his announcement that he would pass upon them later, which he never did, do not authorize a reversal.
    2. DEED OF TRUST: Description: Void for Uncertainty. A deed of trust, conveying 39 acres of land, given to secure the payment of two notes of $8,500 each, contained this clause: “And for every $600 that is paid on said notes said parties of the third part obligate themselves to release one acre of the tract conveyed from the lien of this deed of trust.” Held,, that this description of “one acre of the tract” to be released on the payment of $600, was insufficient to identify the acre to be released, and that part of the deed of trust was void for uncertainty. So that, a payment by the mortgagee of $9,500 on the debt, and a demand; after foreclosure but before the trustee’s deed was made to the purchasing mortgagor, that he and the trustee release from the operation of said deed of trust 15 5-6 acres off of the east side of said thirty-nine-acre tract, cannot be specifically performed, for the validity of the release clause depends entirely upon the sufficiency of the description of any one acre of the 39, which description is wholly insufficient.

      Appeal from Jackson Circuit Court. — Ho». Andrew A. Evans, Judge.
    Affirmed.

      John A. Sea for appellants.
    (1) The court should, at time of hearing the cause, when the objection was made by defendants as to the admission in evidence of the various records and proceedings in former suits, have passed upon said objections at that time and not withheld its decision, in fact virtually making no decision so far as record shows. Appellant is wholly unable to state now whether any of such evidence was admitted or excluded, or what effect any of it had on the finding of the court. Since the court made no ruling on the evidence objected to, appellant is compelled to assume a burden both in the court below and in the court here that is both unjust and inequitable. This is reversible error. Moechel v. Heim, 134 Mo. 576; Asbury v. Hicklin, 181 Mo. 658. (2) If the court finally admitted the records, evidence and proceedings of former litigation between McCormick and Parsons, or these appellants, it erred in this: said records, evidence and proceedings were irrelevant and immaterial in the absence of evidence on the part of plaintiff that this claim of appellants was expressly included in the terms of such compromise settlement. Appellee claiming same to be included, the burden is on him to show that fact. Perry’s Admr. v. Roberts, 17 Mo. 36; Wade v. Hardy, 74 Mo. 400. (3) In addition, the burden was on appellee to show that the personal representatives of Parsons, settling a claim against the personal estate, had authority to make a settlement including rights of these appellants to their interests in the land. Relying upon an instrument executed by agent, he must prove agent’s authority. Soné v. Palmer, 28 Mo. 539. (4) Contract to release is part of the general contract under which appellee claims. If by any fair construction an instrument can be sustained in all its parts, that construction should be given. Wiggins Ferry Co. v. Eailroad, 128 Mo. 224; Glover v. American Casualty Co., 130 Mo. 173; Belch v. Miller, 32 Mo. App. 387. The court will ascertain the meaning of the contract from all the provisions and not from single words and phrases, and when the intention is thus ascertained, that intention will be effectuated unless it violates some inexorable rule of law. Meyer v. Christopher, 176 Mo. 580. Words will be taken in their plain, common, ordinary and usual sense. Missouri Edison Electric Co. v. Bry, 88 Mo. App. 135. It needs no authority to sustain the proposition that an undivided interest can be held in lands. The contract shows an incumbrance of $435 on each acre of land.’ It provided that on payment of $600, one acre should be released from the lien of the deed of trust. A release is “the giving up or abandoning of a claim or right to the person against whom the claim exists or the right is to be enforced.” Winter v. Eailroad, 160 Mo. 175. A release extinguishes a pre-existing right. Equitable Securities Co. v. Tolbert, 22 So. 762; 7 Words and Phrases, p. 6060. There wa,s thirty-nine acres of land; the payment of $600 extinguished the lien on one acre, or one thirty-ninth of the land. The payment of $9,500 extinguished the lien on fifteen and five-sixths acres, undivided, it is true, but easy of apportionment. The fact that the purchaser was obliged to pay $600 per acre for land incumbered for $435, is proof that both the seller and purchaser intended this payment to be the price of an absolute release of the land from the lien. It is impossible to reconcile such payment at such price with any other intent. Neale v. Dempster, 179 Pa. St. 569. Appellant made payment of $600 which, under terms of deed, pro tanto discharged the indebtedness. As to plaintiff, when his secured indebtedness had been met and discharged under the terms of .the deed, the deed of trust as to one acre became a lifeless instrument. Snow v. Bliss, 174 Mo. 167. (5) The right to the release is not limited; it runs with the land and is not forfeited by being in default as to other payments. Gammel v. Goode, 103 Iowa 301. By its terms the covenant, or obligation, to release is unconditional. The demand for release was made before the completion of sale, and release should have been made. Yawter v. Crafts, 41 Minn. 14; Lane v. Allen, 162 111. 426.

      Peak é Strother and William D. Majors for respondent.
    (1) There was no error in admitting in evidence the testimony of Lyman Parsons preserved in the bill of exceptions in the attachment suit of McCormick vs. Parsons. R. S. 1899, sec. 3149. (2) Even if the evidence were “irrelevant and immaterial,” as defendants contended in their objection to its admission, such admission, in this equity suit, was not reversible error. Kleimann v. Geiselmann, 45 Mo. App. 501, 114 Mo. 443; Evangelical Synod v. Schoeneich, 143 Mo. 658; Sheridan v. Nation, 159 Mo. 41. (3) The judgment of the circuit court in the attachment suit conclusively fixed the amount due McCormick from the estate of Lyman Parsons, deceased, and hence established the validity of the sale under the deed of trust; because such amount was dependent upon that sale. Moody v. Peyton, 135 Mo. 482; Jamison v. Wickham, 67 Mo. App. 575. (4) The agreement for a release contained in the deed of trust is equivalent to a contract to convey land; and is void for the reason that it is so vague and uncertain in its terms, and particularly in its description of the property to be released, as to be altogether incapable of specific enforcement. Bell v. Dawson, 32 Mo. 87; Alexander v. Hickox, 34 Mo. 500; Carter v. Holman, 60 Mo. 498; Freed v. Brown, 41 Ark. 495; Thompson v. Gordon, 72 Ala. 455; Armstrong v. Short, 95 Ind. 328; Palmer v. Albee, 50 Iowa 429; Moulton v. Bgery, 75 Me. 485; Breoid v. Munger, 88 N. C. 297. (5) Even if this agreement for a release were such as could be enforced, still, by its very terms it would only bind the parties of the first and third parts named in the deed of trust. Pierce v. Kneeland, 15 Wis. 672. (6) By the terms of the deed of trust, itself, upon the default of Tuttle and wife and Parsons, in the payment of-the balance of principal and interest due on the second note, McCormick was entitled to require the trustee to sell, and the trustee was bound to sell, all the land then unreleased, if such sale was necessary to pay the note and costs of sale. Reed v. Jones, 133 Mass. 116; Werner v. Tuch, 52 Hun 272; Bull & Cozzens, Petitioners, 15 R. I. 534; McComber v. Mills, 80 Cal. Ill; Bank v. Hiller, 106 Mich. 118; Chrisman v. Hay, 43 Fed. 555. (7) The trustee’s deed conveyed to McCormick the legal title to the land. The only remedy left to defendants, if any, was a suit to redeem. If their answer is equivalent to such a suit, they were and are entitled to no relief unless they are willing to pay the full amount of principal, interest and costs of sale due McCormick. Garland v. Watson, 74 Ala. 325; Collins v. Riggs, 81 U. S. (14 Wall.) 491; Kline v. Yogel, 11 Mo. App. 211, 90 Mo. 239; Schanewerk v. Hoberecht, 117 Mo. 22; Kennedy v. Siemers, 120 Mo. 73; Springfield Engine, etc., Co. v. Donovan, 120 Mo. 423.
   BURGESS, P. J.

— This suit was instituted in the circuit court of Jackson county by James P. McCormick in his lifetime, for the purpose of determining and quieting the title to certain real estate lying in said county, and described as being all of the northeast quarter of the southwest quarter of section 34, township 50, range 20, except one acre out of the northwest corner thereof.

The plaintiff obtained judgment in the circuit court, from which judgment defendants appeal. Since the appeal to this court the original plaintiff died, and the cause has been duly revived in the name of his widow, his legatee.

On March 14, 1888, Herbert E. Tuttle and Ida C. Tuttle, his wife, who were the owners of the land in suit, executed to Archibald C. Majors and Erastus Smith, two negotiable promissory notes, each for the sum of $8,500, and due on or before one year and on or before two years after date, respectively, with eight per cent compound interest from date, said notes being ■given for part of the purchase price of said land. To secure the payment of said notes they executed a deed of trust, dated March 14, 1888, whereby they conveyed said land to William D. Majors, as trustee for said Smith and Majors. This deed of trust, which was duly recorded in the office of the recorder of deeds at Independence, Jackson county, Missouri, contained this provision: “And for every $600 that is paid on said notes said parties of the third part obligate themselves to release one acre of the tract hereby conveyed from the lien of this deed of trust, said notes being given as part of the purchase money of said tract of land.”

Shortly after the execution of .said notes, and before'their maturity, they were for value sold, indorsed and delivered to James P. McCormick, the original plaintiff herein.

Thereafter, on the 21st day of November, 1888; Tuttle and wife conveyed the said tract of thirty-nine acres, together with another tract of four acres, to Lyman F. Parsons, the ancestor of the defendants in this suit, by warranty deed duly recorded in the office of said recorder of deeds at Independence, on December 14, 1888, which said deed contained the following provision: “Said forty-three acres of land are hereby conveyed subject to the incumbrances placed thereon by the said H. E. and I. C. Tuttle, and of record in the said county of Jackson, all of which incumbrances are assumed by said grantee herein. ’ ’

On the first day of September, 1894, the trustee named in said deed of trust sold, at public sale, under the terms of said trust, said property, at the front door of the court house in the city of Independence, the same being purchased by James P. McCormick, the holder of the notes described in said deed of trust, at the price and sum of $4,000; but on the same day, and prior to the execution of the trustee’s deed, the said Lyman F. Parsons caused to be served upon the said Majors and McCormick, trustee and purchaser, respectively, a notice stating that $9,500 had been paid 'on said notes, and demanding that they release from the operation of said deed of trust sixteen acres, or fifteen and five-sixths acres, of said land, off of the east side of said tract of thirty-nine acres, which notice further stated that he, the said Parsons, would hold them responsible for any loss by reason of said sale. Notwithstanding said notice, the trustee, on the third day of September, 1894, executed to said purchaser a deed under said sale, which deed was duly recorded in the said recorder’s office. Thereafter, on the 16th day of July, 1902, said James P. McCormick instituted this suit in the circuit court of Jackson county, under the provisions of section 650, Eevised Statutes 1899, against the heirs and legal representatives of Lyman F. Parsons, said Parsons having died after the sale of said property by the trustee aforesaid, and the cause was tried at the December term, 1902, of said circuit court.

Plaintiff offered in evidence, in support of the issues on his part, the record of a certain suit which had been instituted by him against said Lyman F. Parsons, after the- sale aforesaid, in the circuit court of Jackson county, Missouri, on September 7, 1894, which said suit was for the purpose of recovering a balance of $4,947.50 remaining unpaid on one of the notes after crediting the same with the net proceeds of the sale made as aforesaid, in which said suit the answer of said Parsons alleged that the assumption of the note as set out in the deed to him was wholly without his knowledge, and was in direct violation of the terms of the contract, said deed having been placed of record without his having examined the same. It appears from the record of said suit that said Parsons died before the termination of said suit, and the same was revived in the name of John A. Kerr, as administrator, and said cause was-prosecuted to a judgment, which was against said administrator ; that the administrator appealed,- and that the suit was afterwards settled and compromised for the sum of $3,0Q0.

Plaintiff also offered in evidence the record of a suit brought by said administrator against the said McCormick for the purpose of setting aside said trustee’s sale and releasing the fifteen acres of the land from the lien of the said deed of trust. He further introduced in evidence the said note, deed of trust, warranty deed and trustee’s deed.

On the offer to introduce the records and papers-in the cause of McCormick against Parsons aforesaid, defendants objected, for the reason that they were immaterial, irrelevant, and showed on their face that there had been an adjustment of the matters between the parties themselves in the nature of a compromise. The court then and there said that he would hear and pass upon the objection later on. On the introduction of the second suit the same objections were made, and the same answer was made by the court; but it does not appear that the court ever made any ruling thereon.

Plaintiff then offered in evidence extracts from the printed testimony of Lyman F. Parsons in thfe case of McCormick v. Parsons aforesaid, to the introduction of which defendants objected on the ground that such evidence was incompetent, irrelevant and immaterial, and that the said cause was dismissed for the purpose of carrying out a compromise between the parties, and was not finally litigated, but compromised and settled; to wbicb objection tbe court answered, “I will consider further, and pass on all of it together.”

The plaintiff further offered, in support of the issues on his part, a receipt which was given to Elsie F. Parsons, administratrix of the estate of Lyman F. Parsons, in full settlement of the issues set out in the cause of McCormick v. Parsons aforesaid, which was objected .to by defendants as being irrelevant, but which objection was not passed upon by the court.

On the part of the defendants it was shown that said Parsons was ignorant, until about the time of the sale by said trustee, that the deed from Tuttle and wife to him contained a clause “assuming” the incumbrance on the land, but supposed that he had bought “subject to” the same. It also appeared that Parsons was ignorant of his rights under the deed of trust until about the date of sale, and that as soon as he learned of the clause in the deed to him rendering him personally liable for the debt on the land, he took all steps in his power to protect his rights. That before the completion of the said trustee’s sale, the said Parsons, by and through his agent, John A. Kerr, notified the trustee, Majors, and the purchaser, McCormick, that he demanded a release of fifteen and five-sixths acres of the land, under the terms of the deed of trust.

The reply of plaintiff admits the making of the deed of trust and the payment of $9,500 on said notes; admits that said deed of trust contained the aforesaid release clause, but sets up as a defense that said release clause was void by reason of being vague and uncertain. in its terms. It also sets up that 'the defendants are barred by the ten-year Statute of Limitations from making claim to said property, and further, that Parsons, having made no payments on the note for a long time prior to the sale, was guilty of such neglect and laches as would estop him, or those claiming under him, from making any claim to said land.

The defendants claim that the release clause set out in said deed of trust entitled said Parsons, and those claiming under him, to a release of one acre of land on the payment of each and every $600, and that on such payment one acre of the tract of thirty-nine acres became free from the lien of the deed of trust, and that if parties did not select and set out such acre, an undivided one thirty-ninth of the lands was released by such payment. That decedent, Lyman Parsons, was not guilty of negligence or laches during his lifetime, but acted promptly as soon as he was informed that he was personally bound by his assumption of the incumbrance on said land, and did all in his power to protect his rights. That Parsons was owning and holding said-land at the time of the sale, September 1, 1894, subject to said deed of trust, and that McCormick took adversely to him only from September 4,1894, the date of the execution and delivery of the trustee’s deed, and that plaintiff had been in possession of the land only eight years at the time of the commencement of this suit.

Defendants also complain of the failure of the court, upon objections made by them to the admission in evidence of the various records and proceedings in former suits, to pass upon such objections at the time. But neither the action of the court in admitting this evidence over the objection of defendants, nor its failure to pass upon the objections, would justify a reversal of the judgment, this being an equity case, fot in such cases evidence improperly admitted will be disregarded by this court. In the case of State ex rel. v. Jarrott, 183 Mo. 204, Gantt, J., in speaking for the court, said: “Indeed, this court has held in a number of cases that on an appeal in an equity case it would consider evidence which was improperly excluded by the trial court or reject evidence improperly admitted, when preserved in the bill of exceptions, without reversing the judgment for that reason.” [Barrett v. Davis, 104 Mo. 549; Hanna v. South St. Joseph Land Co., 126 Mo. 16; Goodrich v. Harrison, 130 Mo. 269; Davis v. Kline, 96 Mo. 401; Kleimann v. Gieselmann, 114 Mo. 437.]

It is said for defendants that when the deed of trust was made by Tuttle and wife to secure the two notes of $8,500 each, the parties to that instrument intended that each part of it should have a meaning; that when they inserted the following clause, to-wit: “And for every $600 that is paid on said notes, said parties of the third part obligate themselves to' release one acre of the tract hereby conveyed from the lien of this deed of trust, said notes being given as a part of the purchase money of said tract of land, ’ ’ it was intended to have some force and effect, and that the holder of the notes, on payment of $600 thereon, became obligated to release one acre of the land whether demand was made or not. The tract of land described in the deed of trust contains thirty-nine acres, and the position of plaintiff is, that if this were a contract to convey, out of a tract of thirty-nine acres of land, one acre for every $600 paid, and there were a payment of $9,500, there could be no specific performance of such contract because of lack of certainty in the description of the land to be conveyed, and the contract would be void. It may be conceded that if a person who owns a certain tract of land enters into an agreement otherwise valid to convey to another a certain undivided interest therein, the specific performance of such contract may be enforced. But that is not this case. This was a contract to release one acre out of a tract of thirty-nine acres, without designating or describing the particular acre to be released.

Campbell v. Johnson, 44 Mo. 247, was a suit in ejectment broughttoreeoverpossessionof thenorthwest quarter of the southwest quarter of section eleven, township fifty- three, range sixteen, in Randolph county, embracing an area of forty acres. But the deed on which the suit was based only described the land as the southwest quarter of section eleven. It was held that a quarter section contained four forty-acre tracts, and as there was nothing in the deed to show to which forty acres it applied, the ambiguity was patent, and because the description was inaccurate and rendered the identity of the land sought to be conveyed wholly uncertain, the deed was void for uncertainty. So in the case at bar, the acre of land claimed to have been released from the lien of the deed of trust upon the payment of the sum of $600 was merely described as “one acre of the tract,” which description was wholly insufficient to identify the acre to be released, and, under the rule announced in the Campbell case, supra, rendered that particular provision in the deed of trust void for uncertainty of description. [2 Devlin on Deeds (2 Ed.), sec. 1010.]

Bell v. Dawson, 32 Mo. 79, was an action of ejectment, wherein plaintiff relied for title on a deed which described the land as follows: “A lot of one arpent in front by forty arpens in depth, situated in the Grand Prairie, bounded on the one side by Mr. Laclede and on the other side by the said vendor, such as it now exists, which the said Ortez says he knows and is satisfied therewith.” At the time of the execution of the deed the grantor owned a tract of land three arpens wide by forty arpens deep, bounded on both sides by lands of Laclede. It was held that the deed was void for uncertainty of description.

In Brandon v. Leddy, 67 Cal. 43, it is held that a deed which shows upon its face that there are two lots to which the description equally applies is void for uncertainty, and parol evidence is inadmissible to explain the ambiguity. In this case the description of any one acre to be released from the lien of the deed of trust applies alike to each and every acre of the tract of thirty-nine acres.

Armstrong v. Short, 95 Ind. 326, was an action to correct the description of land in a mortgage, and to foreclose it. One of the tracts was described as the south part of the northwest quarter of section thirty, etc., containing seventeen acres; the other, as the north part of the east half of the northwest quarter of section thirty-one, etc., containing forty-five acres. The court said: “It is very clear from appellant’s testimony that there was no mistake of fact as to the descriptions; they are just what he understood and knew them to be, and, apparently, just what he wished them to be. If he is not able to recover anything by them, it is not because there was any mistake in the insertion of them in the mortgage, but because he misconceived the legal effect and import of them. It is just as clear that the descriptions are entirely defective and insufficient.” _

Nor could the clause in the deed of trust which we hold to be void for uncertainty of description of the acre of land to be released upon payment of $600 be aided by a demand for the release of sixteen acres, or •fifteen and five-sixths acres of land, off of the east side of said tract of thirty-nine acres after the payment of the full amount of said notes. The records that were read in evidence by plaintiff were immaterial as to the vital issue in this case; that is, the validity of the release clause in the deed of trust, which depends entirely upon the sufficiency of the description of any one acre of the thirty-nine acre tract which might be released from the lien of said deed of trust upon the payment of $600 upon the notes secured by said deed, which description is wholly insufficient. It must, therefore, follow that the result of this appeal in no way depends upon the various records in question, but upon the validity of the release clause alone. Our conclusion is that the judgment should be affirmed. It is so ordered.

All concur.