Summary
In McDaniel, the Supreme Court of Tennessee found that the issue of whether an insured's answer to a question in his insurance application regarding the existence of other insurance was false should have been submitted to the jury and not found to be a misrepresentation as a matter of law so as to void the policy.
Summary of this case from Frank v. Nationwide Mutual Fire Insurance CompanyOpinion
No. 21896.
June 15, 1953. Rehearing Denied October 5, 1953.
APPEAL FROM THE CIRCUIT COURT OF PUTNAM COUNTY, V. C. ROSE, J.
L. E. Atherton, Milan, for appellant.
Charles B. Fitzgerald, Unionville, for respondents.
The appeal herein was first taken to the Supreme Court. Inasmuch as it did not affirmatively appear that the amount in dispute was in excess of the sum of $7,500, that court transferred the cause to us. The background of the case is clearly set out by the Supreme Court, 251 S.W.2d 652, as follows:
"This is an appeal from a judgment of dismissal entered upon the trial court's sustention of defendants' motion to dismiss plaintiff's petition.
"Plaintiff, in the first count of his second amended petition, alleged that he and defendants had entered into a contract, November 22, 1950, by which he had sold to defendants the stock of merchandise, furniture and fixtures of a jewelry store for the sum of $10,000, `the same to run for ten years without interest as evidenced by note for the amount, with the second party (defendants) to have the privilege to pay on said note in January of each year' any multiple of one hundred dollars. It was further alleged the agreement contained the provision that `the second party agrees to keep up the stock of goods, furniture and fixtures to the unpaid balance of the said note.'
"Plaintiff further stated that defendants have executed their note to plaintiff for $10,000 and are in possession of the store; that it was the understanding of the parties that the contractual provision for keeping up the stock of goods, furniture and fixtures to the unpaid balance of the note was for the purpose of securing the payment of the purchase price; that the contract had been so understood and construed by the parties; and that `by reason of the premises said instrument created a vendor's lien and chattel mortgage,' and `should the stock of goods, merchandise and fixtures and furniture not be kept up to the unpaid balance on said note, a breach of condition would arise and plaintiff would be entitled to foreclose said lien or chattel mortgage by appropriate action * * *.'
"Plaintiff prayed the court to render judgment declaring the interests of the parties to the contract and to find that plaintiff has a lien and the defendants are required to keep the stock of merchandise, furniture and fixtures `to the unpaid balance on the note'; and that, in the event the stock of merchandise, furniture and fixtures falls below the amount of the note, the condition is broken giving plaintiff the right to foreclose.
"Plaintiff, in the second count of his petition, reaffirmed the allegations of the first count thereof, and further alleged that defendants have breached the contract by permitting the stock of merchandise, furniture and fixtures and the value thereof to fall below the unpaid balance of the note, on which note, it was alleged, the full sum of $10,000 remains unpaid. Plaintiff requested the findings that the condition of the lien had been broken and that he is entitled to enforce the lien by foreclosure; and plaintiff prayed for such an order and judgment.
"The trial court sustained defendants' motion to dismiss on the stated grounds,
"`1. That the second amended petition fails to state any facts sufficient to constitute a claim or cause of action upon which the relief prayed for in said second amended petition can be granted. * * *
"`3. That this Court does not have jurisdiction under the Declaratory Judgment Act in that the plaintiff, if he has a cause of action, has a suitable remedy at law.'
"Plaintiff-appellant contends the trial court erred in sustaining the motion to dismiss as to the first count of the petition. Plaintiff-appellant urges that the allegations of the first count entitled plaintiff to relief, under the Declaratory Judgments Act, Section 527.010 et seq. RSMo 1949, V.A.M.S., from uncertainty and insecurity with respect to his rights, status and other legal relations under the terms of the contract; and that the court erred in dismissing the second count of the petition, it having been alleged there was a breach of the condition of the alleged lien in that the stock of goods, furniture and fixtures had fallen in value below the amount of the unpaid balance of the note.
"Defendants-respondents contend the trial court correctly sustained the motion to dismiss because the facts, they say, as stated in the second amended petition were insufficient in stating a claim for relief or to authorize the trial court to render judgment under the Declaratory Judgments Act. Defendants-respondents argue that plaintiff's petition merely pleads a construction of the contract as interpreted by the pleader; and that, in examining the question of whether a petition states a claim as raised by a motion to dismiss, the court may consider only those allegations which are well pleaded, and may not consider as admitted the mere conclusions or interpretations of the pleader. Defendants-respondents assert that under the facts as well stated in the second amended petition plaintiff has no lien for the purchase price of the merchandise, furniture and fixtures, but must look solely to the personal responsibility of defendants for payment of the debt evidenced by the note."
We are of the opinion that the court below ruled correctly in sustaining the motion to dismiss. A motion to dismiss under the new Civil Code, Section 509.300 RSMo 1949, V.A.M.S., takes the place of the demurrer under the former practice. Bernhardt v. Long, 357 Mo. 427, 209 S.W.2d 112. And it does not admit the mere conclusions of the pleader. As stated in Meek v. Hurst, 223 Mo. 688, 122 S.W. 1022, 1024:
"For the purposes of a demurrer, all allegations (not absurd or impossible) of substantive fact well pleaded are taken as true. But this doctrine goes hand in hand with another, viz., that for the purposes of a demurrer these allegations of the bill announcing mere conclusions of law are not admitted; and, akin to the last proposition, there is another, viz., that the pleader's construction and interpretation of a written instrument lying at the root of his cause of action and set forth in the bill are not taken as true on demurrer. To the contrary, it is for the court, not the pleader, to put a construction upon an unambiguous and entire contract pleaded as the basis of recovery or relief, as here. * * *"
As said in Donovan v. Boeck, 217 Mo. 70, 84, 116 S.W. 543, 546: "A demurrer only admits facts well pleaded; it does not admit * * * the correctness of the ascription of a purpose to the parties when not justified by the language used."
The allegations of the amended petition that it was the understanding of the parties that the instrument created a vendor's lien on the goods, furniture and fixtures were mere conclusions and the motion to dismiss did not admit them.
It is the settled rule that liens can only be created by agreement, or by some fixed rule of law. In the absence of a lien given by law, neither party can create one without the consent or agreement of the other. It is not one of the functions of courts to create a lien. 33 Am Jur. par. 6, page 421.
The question before the trial court was whether or not the parties to the contract agreed that there would be a lien for the purchase price. There was certainly no express lien in the agreement. Was one implied? Possession of the business was given by the seller. The giving and receiving of the note, in and of itself, is evidence of no intention on the part of the parties to create a lien on the property sold. The provision in the contract calling for an inventory might under certain circumstances be made the subject of an action for breach of contract, but by itself, in view of the other terms of the contract, could not be considered as creating a vendor's lien.
The general rule is that where a sale has been consummated by an actual delivery of the goods to the buyer, the seller has no lien for the purchase price, but must look solely to the personal responsibility of the buyer for payment. 46 Am.Jur. par. 520, page 678. In the case of Conrad v. Fisher, 37 Mo.App. 352, at page 382, the court reviewing at great length the law relative to a vendor's lien said: "It is waived by giving time for payment, and especially by taking a bill or note to secure the payment of the purchase price * *." Finally, 37 Mo.App. at loc. cit. 422, the court reached the conclusion that "* * it is the transfer of possession, and not merely the transfer of title which cuts off the vendor's lien * * *." In the instant case, both title and possession of the goods had passed. This court in the case of Cass County Bank v. Hulen, 195 S.W. 74, 75, said: "* * * it must be borne in mind that a vendor of personal property has no lien for the purchase price. * * * His only advantage is that in an action for the purchase price the vendee cannot claim the property as exempt."
Under the above authorities, the trial court was correct in sustaining the motion to dismiss the first count of the amended petition. And, by so doing, the court could not have held the second count good, because it rested on the affirmance of the first.
Plaintiff in his brief cites cases involving real property. He admits that he can point to no case in Missouri dealing with personal property which affords him any aid.
The judgment is affirmed. All concur.