# Third National Bank v. St. Charles Savings Bank

> Supreme Court of Missouri · July 2, 1912 · 244 Mo. 554

URL: https://www.frixlaw.com/law-library/cases/8018088

## Case

- **Full name:** THIRD NATIONAL BANK OF ST. LOUIS v. ST. CHARLES SAVINGS BANK
- **Court:** Supreme Court of Missouri
- **Decided:** July 2, 1912
- **Citations:** 244 Mo. 554; 149 S.W. 495; 1912 Mo. LEXIS 335
- **Precedential status:** Published
- **Opinion:** Dissent by Woodson
- **Judges:** Brown, Ferriss, Graves, Kennish, Lamm, Son, Valliamt, Wood, Woodson
- **Cited by:** 33 later opinions in the Frix Law Library

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## Opinion text

DISSENTING OPINION.
WOODSON, J.
The facts of this case are few, simple and undisputed and the principles of law governing them are plain and well understood, and there should be no difficulty in applying them to the facts, by court or counsel.
On and prior to October 13, 1904, one "W. J. Baird was indebted to the St. Charles Savings Bank in the sum of about $65,000, which was evidenced by his several promissory notes, held by the bank. In order to reduce that indebtedness, he and A. F. Mispagel, the cashier of the bank, arranged to go to St. Louis and have Baird borrow $20,000 from the plaintiff bank, and pay the same on his indebtedness to the St. Charles Bank. In pursuance to that arrangement, Baird and Mispagel, on said date, went to St. Louis, called at the banking house of the plaintiff, and made known to its proper officers the object of their visit, namely, that Baird wanted to borrow from the plaintiff bank the sum of $20,000, and pay it on Baird’s indebtedness to the defendant bank. After a full statement of the matter, the plaintiff agreed to lend said money to Baird, on his note, secured by the collaterals mentioned in the majority opinion, and provided the defendant bank would sign Baird’s note as guarantor.This was agreed to, and in pursuance thereto the officers of the plaintiff bank drew up the note of $20,000,. *590 for Baird to sign, the collateral contract pledging the notes and stocks of Baird to the plaintiff bank, as collateral security for the payment of said $20,000 note, and the guaranty contract of the defendant bank, guaranteeing the payment of said note.
After those documents had been prepared by the officers of the plaintiff bank, they were presented to Baird and Mispagel for execution, and .thereupon Baird signed the $20,000 note and the collateral contract, pledging' to the plaintiff bank the notes and stocks described therein, as collateral security for the payment of said $20,000; and at the same time, Mispagel, as cashier, signed the name of the defendant bank to the contract guaranteeing the payment of said $20,000 note. Therewith the plaintiff bank issued and delivered to the defendant bank two certificates of deposit each for $10,000, bearing three per cent interest, due in ninety days, the proceeds of the Baird loan.
At the same time, and as part of the same transaction, the defendant bank cancelled and delivered to Baird, in consideration of said $20,000 paid by him to it, through the plaintiff bank, $20,000 in face value of the notes it held against him, thus reducing his indebtedness to the defendant bank $20,000, leaving his indebtedness to it in a sum of about $45,000, instead of $65,000 before the payment was made.
At the maturity, the two certificates of deposit of $10,000 each were presented by the defendant, through the American Exchange National Bank of St. Louis, to the plaintiff bank, for payment, and payment was made. Some three years after said certificates were paid by the plaintiff bank to the defendant bank, it instituted this suit to recover from the latter the $20,000 loaned by the plaintiff to it as previously stated.
These are not only the plain unvarnished facts of the case, but they are undisputed and incontrovertible, for the reason that they are in writing, and those *591 writings were drawn and prepared by the plaintiff’s own agents, for the signatures of Baird and Mispagel, and they executed them in the form as they appear in this record, which are as follows: (The note of Baird to the plaintiff bank, for $20,000, and the collateral contract executed by him to it, pledging, certain notes and stocks of his to said bank as collateral security for the payment of said $20,000 note, if we understand the record correctly, were executed upon one piece of paper, but that is immaterial). The note reads:
“$20,000. St. Louis, Mo., Oct. 13, 1904.
“Ninety days after date, I promise to pay to The Third National Bank of St. Louis, or order, at the banking house of said bank, at St. Louis, Mo., twenty thousand 001100 dollars, for value received, with interest at the rate of 8 per cent per annum, from maturity.
“W. J. Baird.”
The collateral contract reads:
“Having executed a promissory note, dated at St. Louis, Mo., on the 13th day of Oct., 1904, for $20,000. payable to The Third National Bank of St. Louis or order ninety days after date, with interest from maturity at the rate of 8 per cent per annum; and being desirous of securing the same, and all my other liabilities, actual and contingent, to said bank now existing or which may hereafter arise, I do hereby pledge to said bank and its assigns, as collateral security for said note and said other liabilities........ ..........$5,000 note W. J. Baird, dated 10-1-04 payable 90 days after date, $10,000 note W. J. Baird, dated 10-1-04 payable 6 months after date, secured by deed of trust, 73 shares McKittrick Milling Co., and agree to give additional security to keep up the present margin, whenever the market value of the above *592 collateral should decline, and within twenty-four hours after receipt of notice so to do from the holder of said liability. In default of payment of said note or other of said liabilities at maturity, or in default of my giving such additional security when so notified, or in case of suspension, failure or insolvency, or the commission of any act of insolvency on my part, said bank shall, in addition to the foregoing collateral, have a lien on all notes, drafts, bills receivable or moneys held by or in transit to said bank in my name or for my account, the same to be deemed to have been assigned to said bank as additional collateral for the payment of said note, and all other of my said liabilities actual and contingent; said bank or the holder of such liability, to have the option of any or all of said collaterals before sale, or of the proceeds thereof after sale, upon any, either or all of said liabilities as it may elect, and upon such default being made, I do hereby authorize said bank, its officers or the holder of said liability, to sell or cause to be sold any or all of said collaterals, or any substitutes therefor, at public or private sale at the Merchants’ Exchange in St. Louis, or elsewhere, at the option of the holder, with or without notice to me or the public, and to apply the proceeds, first to the payment of the expenses incurred by said sale, next to the discharge of my liabilities as hereinbefore set out. Any surplus left shall be paid to me. If the proceeds of such sale are not sufficient to pay all my liabilities hereby secured, I agree to pay the balance on demand. In case of a sale of any or all of said collaterals, said bank, or the holder of any liability hereby secured, may become the purchaser thereof, without any right of redemption on my part. If this agreement is signed by more than one party, it shall be held as made by and binding upon each and all the parties signing it.
*‘W. J. Baird.”
*593 Across the face of said note is the following:
“Protested for nonpayment at the city of St. Louis, Mo., this 14th day of January, 1905.
“Thos. F. Galt, Notary Public.
“Fee, $2.95.”
Indorsed on the back of said note is the following:
“3 ¡13-05, Paid 1200.
“11|13|05, Paid 203.90.”
The contract of guaranty executed by Mispagel, cashier of the defendant bank, reads:
“The Third National Bank of St. Louis.
“Whereas, W. J. Baird . . . has executed his promissory note dated St. Louis, Mo., Oct. 13, 1904, payable ninety days after date to the order of the Third National Bank, St. Louis, Mo., for twenty thousand 00/100 dollars, $20,000, and secured by $5000 and $10,000 notes of W. J. Baird, payable ninety days and six months from date respectively, the note of $10,000 being secured by deed of trust and 73 shares Connery Commission Co., and 209 shares McKittrick Milling Co., the same having been offered for discount to the Third National Bank.
“Now for value received, and in consideration of one dollar paid to the undersigned, receipt of which is hereby acknowledged, and in consideration of the discount of said note, by said bank, and other valuable considerations to them moving the St. Charles Saving Bank for themselves, their successors or assigns,' hereby guarantees to the Third National Bank of St. Louis, Mo., its successors or assigns, the prompt payment of the aforesaid note, as well as any renewals thereof. Whenever said note, or renewals thereof, shall become due and remain unpaid, the undersigned will, on demand and without notice of dishonor or protest, pay the amount due thereon to said Third National Bank of St. Louis, its successors or assigns, *594 and it shall not he necessary for said bank in order to enforce payment, to first institute suit or exhaust its remedies against the other parties liable on said note.
“St. Charles Savings Bank, “per A. F. Mispagel, Cashier.”
“Date, Oct. 13, 1904.”
Neither the validity of this transaction, as a whole, nor the execution and validity of the note, the collateral contract or the contract of guaranty, just copied, are challenged for fraud or otherwise, in the pleading or evidence.
I. At the trial, the plaintiff bank, over the objections of counsel for defendant, offered and the court admitted a great mass of parol testimony, covering about one hundred pages of the record, contradictory of the written instruments introduced in evidence, and tending to prove the facts of the transaction to be as they are stated by my learned associate, who wrote the majority opinion. That action of the court is assigned here as reversible error.
It is elementary, and it seems to me that a citation of authorities is unnecessary to support the proposition, that parol evidence is inadmissible to contradict, add to, take from, or explain the meaning of a written contract; nevertheless, that horn-book principle of law was most flagrantly violated by the learned trial court in this case.
The textbooks and adjudged cases announcing that doctrine, are as old or older than our jurisprudence, and as numerous on both sides of the Atlantic as are the grains of sand on the sea shore.
However, at the risk of being criticised by the bench and bar for doing such a useless thing, I am going to cite a few of our own later adjudications, bearing upon this “same old, old story.”
In the case of Morgan v. Porter, 103 Mo. 135 , *595 l. c. 140 and 141, this court in discussing this question used this language. “ ‘No rule of evidence is better established than the one which says, when the parties have put their contracts in writing in the absence of accident, fraud or mistake, it is conclusively presumed that the whole engagement and the extent and manner of their undertaking was reduced to writing.’ This is the language of Judge Black in the case of State ex rel. Yoeman v. Hoshaw, 98 Mo. 358 . This rule we apply to the case at bar, and the court below, when defendant utterly failed to prove that a portion of the contract was omitted from the writing, either by accident, mistake or fraud, ought to have excluded all the evidence which was intended to show that Ellison agreed to build a house on the premises. The doctrine laid down by Judge Black in the case cited above is indeed well settled on principle and authority. Indeed, no rule is better settled.”
In Tracy v. Union Iron Works, 104 Mo. 193 , l. c. 198 to 200, this court said: ‘ ‘ The general rule excluding evidence of contemporaneous, or prior verbal agreements, varying or contradicting the terms of a valid written instrument, is the outgrowth of the common experience of man. It is of great antiquity and appears in other systems of jurisprudence besides our own. [Corp. Jur. Civ., Cod. Lib. 4, Tit. 20; Tait’s Evid., pp. 326, 327.] It rests on principles somewhat analogous to those which underlie the doctrine of the conelusiveness of judgments upon parties thereto. It is said to be the interest of the State that there should be an end to litigation. Accordingly, the record that closes a forensic controversy is regarded as merging the matters litigated to the extent declared in the judgment. So, in private adjustments of reciprocal rights, it is wisely considered that, when parties have deliberately put their mutual agreements into the form of a completed written contract, that expression of their intention .should be accepted as a *596 finality, in which, is merged all prior negotiations within the scope of the writing. But the rule has too long occupied a place as a corner stone in the law of evidence to require, at this day, any justification of its existence. We may, however, properly remark that the adoption of the modern practice, admitting as witnesses the parties directly interested in the action, seems to add a cogent reason to those existing at the common law, for a close adherence to the rule under discussion. If the uncertainty of ‘slippery memory’ furnished a ground for excluding such verbal testimony in the days of Lord Coke [Countess of Rutland v. Earl of Rutland (1604), Coke’s Reports, part 5, 26a], how much stronger reason for such exclusion to-day when the influence of self-interest is so likely to render the memory of litigating parties more , ‘slippery’ than was that of the witnesses of olden time. In Missouri the general rule has been repeatedly approved in early, as well as recent, decisions. [Woodward v. McGaugh, 8 Mo. 161 ; Walker v. Engler, 30 Mo. 130 ; State ex rel. v. Hoskaw, 98 Mo. 358 ; Morgan v. Porter, 103 Mo. 135 .]”
In Laclede Construction Co. v. Moss Tie Co., 185 Mo. 25 , l. c. 61 and 62, this court said: “The controversy in this case demands a construction and ascertainment of whát in truth and in fact was the contract between the defendant and plaintiff as to furnishing railroad ties by defendant to plaintiff. Whatever that contract was, it must settle the respective rights of the parties to this action. Both at common law and in this State it is the settled rule that when parties have put their engagements in writing, in such terms as import a legal obligation without any uncertainty as to the object or extent of such engagement, it is conclusively presumed that the whole engagement of the parties and the extent and manner of their undertaking were reduced to writing; and all oral testimony of previous colloquium between the' parties or of conversations or *597 declaration at the time when it was completed or after-wards, as it would tend in many instances to substitute a new and different contract for the one which was really agreed upon, to the prejudice, possibly of one of the parties, is rejected. In other words, as the rule is now more briefly expressed, parol contemporaneous evidence is inadmissible to contradict or vary the terms of a valid written instrument. [Tracy v. Iron Works, 104 Mo. 193 ; 1 Greenleaf, Ev. (16 Ed.), sec. 275.]”
In Reigart v. Coal & Coke Co., 217 Mo. 142 , l. c. 160, this court said: “In the case of Boyd v. Paul, 125 Mo. 1 . c. 13, and 14, Sherwood, J., used this language: ‘In the first place, it is one of the fundamentals of the law of evidence that all precedent as well as all contemporaneous negotiations in relation to a contract afterwards reduced to writing, are, in the absence of accident, etc., conclusively presumed to have been swallowed up by, and entirely merged and expressed in, the written instrument, which thenceforth becomes the sole expression of the will and agreement of the contracting parties. This rule has been unvaryingly observed and announced by this court from its earliest to its more recent decisions. [State ex rel. v. Hoshaw, 98 Mo. 358 , and cases cited; Tracy v. Iron Works Co., 104 Mo. 193 , and cases cited; Jones v. Shepley, 90 Mo. 307 , and cases cited.] In the second place, that portion of the contract which was dehors the written assignment of the lease rested in parol, and could not be introduced in evidence without acting in plain contravention of the Statute of Frauds. Where your memorandum under the statute is scant in measure you cannot piece it out by verbal additions. This subject has been recently and satisfactorily discussed in Ringer v. Holtzclaw, 112 Mo. 519 , per Gantt, P. J.’ ”
To the same effect, are Bank v. Terry, 67 Mo. App. l. c. 16, 17, and 18; Helmrichs v. Gehrke, 56 Mo. 79 to *598 81; Squier v. Evans, 127 Mo. 514 , l. c. 518 to 520; Harrington v. Brockman, 107 Mo. App. 418 ; Farmer's Bank v. Bayless, 35 Mo. 428 ; Same v. Same, 41 Mo. 274 .
And a promissory note is a written contract within the meaning of this rule, and can no more be contradicted, added to, taken from, varied or explained, than can any other character of written contracts.
In 2 Parsons on Bills and Notes, 510, the rule is thus stated: “If the defendant endeavors to prove an oral bargain between himself and the plaintiff which differs in its terms from the written note, it will be remembered that it is a firmly settled principle that the parol evidence of an oral agreement, alleged to have been made at the time of the drawing, making or indorsing the note or bill, cannot be permitted to vary, qualify, or contradict, add to, or subtract from, the absolute terms of the written contract. The exceptions to this rule are eases of fraud, illegality, or want of consideration.” On page 507 of the same work, it is further said, that “parol evidence of the contemporaneous agreement that a note in the usual form was intended to stand in place of a receipt, and that the sum for which it was given was intended as payment of a previous debt of defendant’s father, is not admissible;” and on page 525 of the same author, it is said, that “in the ease of a note in the usual form and regularly delivered, parol evidence cannot be admitted to prove any special purpose directly repugnant to the terms of the note.”
The Supreme Court of Iowa in the case of Dickson v. Harris, 13 N. W. 335 , held that a defendant while admitting that he executed a promissory note with full knowledge of its terms, could not, by parol contemporaneous testimony, transform such note into a memorandum or receipt for money páid.
The same doctrine has been decided by this court in the case of Jones v. Shaw, 67 Mo. 667 , where it was *599 held that parol evidence was not admissible for the purpose of showing that a promissory note, absolute in its terms, was only intended as evidence of ,the amount of money which had been advanced by the plaintiff to aid in carrying on a partnership business, and which it was agreed, was to be returned to plaintiff only in the event the business should turn out prosperously.
The same is stated in Smith v. Thomas, 29 Mo. 307 ; Bunce v. Beck, 43 Mo. 266 ; and Woodson, Executor, v. Ritchie, 36 Mo. App. 506 .
According to the law as announced by the authorities before cited, the action of the trial court in admitting parol evidence tending to prove that the loan of $20,000 made by the plaintiff bank was, as a matter of fact, made to the defendant bank, or to Baird, for its use and benefit, and not to Baird individually, as shown by the note, collateral contract and contract of guaranty read in evidence, was clearly erroneous and should have been excluded.
If the court had excluded this parol evidence, as clearly it should have done, then the written agreement between the parties would have been all the evidence left in the case, and upon that evidence standing alone in the case, as it should, then there could have been no doubt but what the plaintiff, on that evidence, would not have been entitled to a recovery and in that view of the case, the defendant’s demurrer to the evidence should have been sustained without it should be that the contract of guaranty signed by Mispagel, as cashier, would have authorized a recovery against the defendant.
Since, however, the undisputed evidence shows that the contract of guaranty, signed by Mispagel, as cashier, was accommodational and unauthorized by the defendant bank, or by its board of directors, it must be held to be null and void, under the statutes of the State and the decisions of this Court. [R S. 190.9, *600 secs. 1099 and 1112; Sprague v. Rooney, 104 Mo. 358 ; Board of Trade v. Brady, 78 Mo. App. 585 ; Bank v. Hughes, 62 Mo. App. 576 , l. c. 581 to 584; Chew v. Ellingwood, 86 Mo. 260 ; Savings Ass’n v. Sailor, 63 Mo. 24 ; Hume v. Eagon, 83 Mo. App. 576 ; Vansandt v. Hobbs, 84 Mo. App. 628 ; Bacon, Dawson & Co. v. Bank, 79 Mo. App. 406 ; Powers v. Woolfolk, 132 Mo. App. 362 ; Downing v. Ringer, 7 Mo. 585, 586 ; Rothwell v. Gibson, 121 Mo. App. 279 ; Tiedeman on Commercial Paper, section 116; 1 Amer. and Eng. Ency. Law (2 Ed.), 348; Morse on Banks and Banking (3 Ed.), sec. 65; 5 Cyc. 523; Fort Dearborn National Bank v. Seymore, 72 N. W. 724 .]
If the law as thus announced is applied to this case, and is enforced, then there is no theory under the sun upon which the plaintiff is entitled to a recovery regardless of the form of action.
If this is not the law, then, as suggested by counsel for defendant, “if a party to a written contract, unambiguous in its terms, brings suit on the contract, he will not be permitted to contradict or vary its terms by oral evidence; but if he will just change the form of his action to a common count in assumpsit or for money had and received, he may recover on the same transaction to which the written contract relates, and by oral evidence may freely contradict or vary the terms of the written contract to suit the emergencies of his case.”
In oral argument counsel for plaintiff contended that the law did, in certain eases, tolerate just what counsel for defendant state in the foregoing suggestions, and referred to actions to recover on a quantum meruit. While that is true, yet the principle underlying that class of cases has no application whatever to this case. Those cases are based upon the theory that where one person has performed labor, or furnished materials, under a contract, either written or oral, to another, and that other has accepted and re *601 tains the same, then equity and good conscience require that he pay the laborer or materialman what the labor and materials are reasonably worth, not to exceed the contract price. But, notwithstanding that fact, where the contract in such a case is in writing, the written contract cannot be contradicted, added to, taken from, or explained, any more than if the question of quantum meruit was not in the case.
This rule has been well stated by this Court in the case of Mansur v. Botts, 80 Mo. 651 . In that case the defendant, under a special contract, employed the plaintiff to represent him in two law suits pending in the circuit court of Linn county. After having fully performed the services according to the terms of the contract, the plaintiff instituted a suit, not upon the contract, but for quantum meruit. The defendant answered, and pleaded the contract, and charged divers breaches thereof; also that the plaintiff caused the defendant to lose said cases in the Linn Circuit Court, on account of his default, negligence and unskillfulness in the management and trials thereof, to his damage, etc. A promissory note also figured in the case, but it is not material to the question here presented, and for that reason will not be further noticed. At the close of the plaintiff’s case, the defendant asked the court to instruct the jury that the plaintiff could not recover on a quantum meruit, where the evidence showed that the services were performed under a special contract. In discussing that question the court used this language: “The principal question discussed by counsel in their briefs is, as to whether the court erred in permitting proof by plaintiff of the special contract. Defendant contends that it was a clear departure from the issues tendered in the pleadings; that the action being on an account, as for a quantum meruit, it, in effect, said there was no special contract as to any part of the services rendered. It is a rule of the common law long established, that indebitatus *602 assumpsit will lie to recover the stipulated price due on a special contract, where the contract has been fully executed, and it is not necessary in such case to declare upon the special contract. [Bank of Columbia v. Patterson, 7 Cranch, 299 .] In Chesapeake & O. C. Co. v. Knapp, 9 Pet. 565 , Mr Justice McLean very succinctly stated the rule thus: ‘There can be no doubt that where the special contract remains open the plaintiff’s remedy is on the contract, and he must set it forth specially in his declaration. But if the contract has been put an end to, the action for money had and received lies to recover any payment that has been made under it. . , . But if the contract remain open, the'plaintiff’s demand for damages arises out of it, and then he must state the special contract, and the breach of it. It is a well-settled principle, where a special contract has been performed, that a plaintiff may recover on the general counts.’ So in Dermott v. Jones, 2 Wall. 9 , Mr. Justice Swayne says: ‘While a special contract remains executory, the plaintiff must sue upon it. When it has been fully executed according to its terms, and nothing remains to be done hut the payment of the price, he may sue on the contract, or in indebitatus assumpsit, and rely upon the common counts. In either case the contract will determine the rights of the parties.’ This may he considered as the generally accepted' doctrine. [Felton v. Dickinson, 10 Mass. 292 ; Knight v. New Eng. W. Co., 2 Cush. 271 .] Nor can it be maintained, as suggested, that there is anything in the provisions of our code of practice which renders the rule inapplicable in this State. For in Stout v. St. Louis Tribune Co., 52 Mo. 347 , this court declared the common law rule in' all its force, as above stated. This point is, therefore, ruled against the appellant.”
In Williams v. Railroad, 112 Mo. 463 , l. c. 491, this court said: “Now while it is perfectly clear that, in a suit on thé contract, this was necessary he- *603 fore they could go into the measurements made by engineers, not named in the contract, it is urged upon us that plaintiffs had a right, under their second count of quantum meruit, to recover the value of their work and materials. At common law, a party could sue in assumpsit to recover the stipulated price due on special contract where the contract had been fully executed, and nothing remained to be done but the payment of the agreed price. [Mansur v. Botts, 80 Mo. 651 ; Chesapeake & O. Canal Co. v. Knapp, 9 Peters, 565 ; Dermott v. Jones, 2 Wall. 9 .] In such a case he does not repudiate the contract, nor seek to avoid it, but, under his common count of quantum meruit, he offers the contract in evidence to sustain his case, and his proof of compliance with its terms. Nor does this necessarily work injustice, as might at first appear.”
The same doctrine is announced in Stout v. St. Louis Tribune Co., 52 Mo. l. c. 346. On page 346 and 347 this court said: “It is Insisted by the plaintiff in this case, that his suit was not brought on the contract read in evidence, but was simply an action on an account to recover for the value of the services rendered, and that therefore he was not bound to show that the defendants were liable to pay under the provisions of the contract. It is very true, that where work is done or services performed under a special contract, and the plaintiff had fully performed the contract on his part and nothing remains but a duty on the part of the defendant- to pay the price agreed on, the plaintiff is not in such case bound to sue on the written contract, but may use the common counts in assumpsit, but still when the contract is produced on the trial; the plaintiff will be required to prove that he has performed the contract on his part, and that by virtue of the provisions of the contract, the defendant is required to pay the price agreed on; if any fact, necessary to create a liability on the part of de *604 fendant to pay, is wanting, the plaintiff cannot recover.”
These authorities make it perfectly plain that this last contention of counsel is unsound, and that the law is not-, that where parties have put their contracts in writing they may, by changing the form of the action, put aside the written contract, vary its terms, add to or subtract therefrom by parol evidence. Such is not and cannot be the law, for the reason that it would nullify and set for naught the wise rule which prohibits the admission of parol testimony to contradict, vary, add to or subtract from the terms of a written contract.
But if it should be held that such is the law, then the wisdom of reducing contracts to writing becomes farcical in the extreme.
II. It is next insisted by counsel for plaintiff, that the finding and judgment on the first count of the petition was proper, “because the defendant ratified and adopted the unauthorized guaranty, by collecting, retaining and appropriating the proceeds of the certificates of deposit, issued to it by plaintiff, after full knowledge that such certificates had been obtained on the strength, and by the means of the guaranty.”
In support of this insistence, we are cited to many authorities. Among others are Bank v. Lyons, 220 Mo. 538 ; Donnell v. Bank, 80 Mo. 165 ; People’s Bank v. National Bank, 101 U. S. 181 ; First National Bank v. Bank, 109 N. W. 61 ; Auten v. Bank, 174 U. S. 125 .
Clearly these cases are inapplicable to the facts of this case. They proceed upon the theory that a bank as such has power to borrow money, and that it did so, but in a manner prohibited by law; but having recovered the proceeds of the loan and retained them, the law will compel the repayment of the money in a suit, not upon the note, but for money had and received, notwithstanding the illegal form of the loan.
*605 Pox instance, in the case of Bank v. Lyons, supra, the cashier of the Middleton Bank, of which Lyons was the receiver, without authority of the hoard of directors, but in violation of sections -1281 and 1294, Revised Statutes 1899, which provide that the cashier or other officer of the bank shall have no authority to make or issue bills payable or to rediscount them without the consent of the board of directors, borrowed from the plaintiff bank, for the use of the defendant bank, the sum of $10,000, and issued bibs payable therefor on the latter bank, by him as cashier. Said bills not having been paid when due, suit was brought by the former bank against the latter for money had and received. The defense was, that the cashier had no authority to borrow money upon said bills, and that they were therefore null, and void, and that the money could not be recovered by the lending bank, against the borrowing bank, because of said statutes. After an exhaustive review of the authorities, the court held that while the bills payable issued by the cashier for the $10,000 borrowed were null and void, and that a recovery could not be had upon them, nevertheless, since the bank had authority to borrow money, but not in the manner resorted to in that instance, it must repay it upon the ground that it would be unjust and inequitable to allow the defendant to plead the illegality of the bills upon which it received the money, and still retain the money obtained thereby.
The ruling there announced was correct, and is supported by the consensus of opinion throughout the country. But that is not this case. The cashier of the St. Charles Bank never borrowed from the Third National Bank the $20,000 mentioned in the evidence, for himself or for the St. Charles Bank. He only undertook to guarantee for his bank a loan the Third National made to Baird, who received the proceeds of the loan and paid or turned them over to the St. *606 Charles Bank in payment of a portion of his indebtedness to it (which was clearly in violation of said statute). The difference between the two cases is this: In the Lyons-Bank case, the bank itself borrowed and received the money and retained and used it, but in the case at bar the St. Charles Bank never received the money of or from the Third National, but received it from Baird, who borrowed the same from the latter and who had a perfect legal right to pay and did pay it to the former bank in the discharge of so much of his indebtedness to it.
Suppose under exactly the same facts that exist in this case, Baird, instead of paying the $20,000 to the St. Charles Bank, had paid it to some other creditor, would it be seriously contended that the plaintiff could recover the same from either the St. Charles Bank, on the guaranty, or from such other creditor simply because it received the money? I apprehend not. Yet there is no difference in principle between the two cases.
The mere fact that Mispagel attempted, as cashier, to guarantee the payment of Baird’s note to the Third National, does in no manner militate against the rule just announced. He had no authority, legal or moral, to sign the name of the St. Charles Bank to the contract of guaranty, and the plaintiff knew that fact as well as did the officers of the St. Charles Bank.
While statements and representations made by the cashier of a bank in the ordinary course of business are binding upon the bank, yet when he is transacting business which is outside and beyond his duties and authority as such cashier, his conduct, representations and statements are not binding upon the bank. [Bank v. Froman, 129 Mo. 427 , l. c. 430; Bank v. Lovitt, 114 Mo. 519 , l. c. 525, 526; Benton v. Bank, 122 Mo. 332 , l. c. 339, 340; Traber v. Hicks, 131 Mo. 180 , l. c. 192; Hickman v. Green, 123 Mo. 165 , l. c. 176; Keyser v. *607 Hinkle, 127 Mo. App. 62 , l. c. 73; Smith v. Boyd, 162 Mo. 146 , l. c. 157.]
I am nnable to understand how it can be contended, in the light of these authorities, that Mispagel and Baird were representing the St. Charles Bank, while borrowing this $20,000 from the Third National, with which to cover up their crime and shortage with the St. Charles Bank, especially when it had no knowledge of the shortage or of this loan made to Baird.
I am, therefore, clearly of the opinion that the plaintiff was not entitled to recover upon the first or upon any other count in the petition.
III. It is also, contended that equity may look beyond the mere form of a transaction and deal with its substance, and by applying that rule to the case at bar, it will be seen and must be held that the St. Charles Bank.was the real borrower of the $20,000, and not simply a guarantor as the contract of guaranty read in evidence indicated.
In answer to that, I wish to state that this is not a suit in equity, nor is the character of that contract assailed in the pleadings. It is pleaded and relied upon as a contract of guaranty, and the court below, at the instance and request of the plaintiff, held it valid as such, and rendered judgment thereon for the plaintiff.
Moreover, this contention ignores the well-settled principle of law which prohibits the reformation of a contract, except where the suit is for that purpose, and where the evidence shows clearly that the contract as executed does not express the tine agreement of the parties. But this suit is not of that character, nor was there a scintilla of evidence introduced which tended to show that the contract of guaranty did not express the real intention of the parties; and even if it had been introduced it would have been clearly inadmissible, for the reason that a written contract can *608 not be contradicted, changed, added to or subtracted from by parol testimony. See cases previously cited upon this point.
This contention is also unsound, and should be ruled against the plaintiff.
IY. There are several other points made and' discussed by counsel, for both parties, but in my opinion they are subsidiary to those considered; and what is here said would, if applied to them, confirm the conclusions before stated; but the lack of time prevents further discussion of a lost but a just and meritorious defense to this unjust action.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/8018088. Public record. Not legal advice.