209 Mo. 662 | Mo. | 1908
In a suit then pending in the St. Louis Circuit Court in which F. J. McMaster, assignee, etc., was plaintiff, and the Ozark Onyx Company, a corporation, was defendant, A. Moore Berry, the plaintiff in this suit, was appointed receiver to collect the assets and wind up’ the affairs of the corporation which was in that suit adjudged to be insolvent. Among orders made in that suit was one directing the receiver to ascertain who were creditors and how much was owing each and to bring suit against the stockholders of the corporation to collect the balances, if any, due on their stock subscriptions to the extent of a sufficient
This is the second appeal in this case. The pro*ceedings in this court on the first appeal are reported in 168 Mo. 316, to which we how refer for a more complete statement of the issues and facts than will be herein given. [Berry v. Rood, 168 Mo. 316.]
Reference to that report will show that when this cause came on for trial in the circuit court it was sent to a referee to try all the issues. A lengthy trial was had before the referee, who at its conclusion made a report to the court in writing and with the report filed in court a record of all the evidence taken at the trial.
By the referee’s report it appeared that the defendants, as incorporators and subscribers to the stock, launched the corporation on the business community with an ostensible full paid capital stock of $300,000, whereas in truth the stock was not paid for in money or money’s worth, hut only in property, the real value of which turned out to be inconsiderable. But the referee found that whilst that was so, yet when the defendants gave in the property they had such confidence in its prospective value that they really believed it was worth the face value of the stock and because they acted in good faith the referee held that they were not liable.
When the report came in plaintiff filed exceptions to it, both as to the findings of fact (chiefly to the findings that the incorporators acted in good faith), and also to the conclusions of law on the facts found. Defendants filed no exceptions to the report. Pending the exceptions filed by the plaintiff, the court re-referred the case to the same referee with instructions to ascertain and report if the defendants as officers of the corporation acted with ordinary business judgment
The plaintiff interpreted that opinion and judg
.The defendants on the contrary interpreted the opinion and judgment of this court to mean that the judgment of the circuit court was reversed and the cause remanded to be tried anew in conformity to the law as declared in the opinion. The trial court sustained the plaintiff’s motion and ruled that the defendants would be allowed to introduce evidence only going to show that since the former trial matters have occurred which may lessen their liability as, for example, payment of creditors. Defendants duly excepted.
On the hearing of the motion the testimony of several expert witnesses was adduced on the part of the plaintiff to the effect that the services of the attorneys in the case were worth $5,000, and of the receiver himself from $1,000 to $1,500. There was evidence also of expenses paid out- in various amounts aggregating $59.75, all of which went in over the objections of defendants and exceptions were duly saved.
Plaintiff also read in evidence the report of the referee in the former trial and the articles of association of the Ozark Onyx Company.
Defendant read in evidence the pleadings and certain of the proceedings in the original suit of McMaster v. The Ozark Onyx Company in which the receiver was appointed and in which the receiver was ordered to bring this suit. Defendants also introduced proof to show that since the former trial the debts due the National Bank of the Republic and the Huttig Sash and Door Company had been paid.
I. Defendants’ first suggestion is that, in the light of recent decisions of this court, the judgment of the trial court in the former appeal should have been affirmed because the appellant did not bring up all the evidence adduced at the trial, and in support of this suggestion defendants refer to State ex rel v. Jarrott, 183 Mo. 204; Patterson v. Patterson, 200 Mo. 335; Pitts v. Pitts, 201 Mo. 356; and Gruinan v. Donnell, 201 Mo. 173.
The law as laid down in those cases is that in an equity case it devolves on the appellant, who seeks to reverse the judgment, to incorporate into his bill of exceptions all the evidence that was heard at the
But it was said the abstract was insufficient. Section 813, Revised Statutes 1899', and rules 11 and 12 of this court provide that if the respondent is dissatisfied with the abstract filed by appellant he may file an abstract of his own making, and if in the end it turns out that he was justified in filing his abstract he may recover his costs. There is perhaps an element of unfairness in the law that imposes on the respondent a burden that justly belongs to appellant, but it is the law as prescribed by statute and as regulated by rules of court, and it is in the spirit of our code practice. It is in the same questionable light as to fairness as is the law that requires pleadings to be construed liberally instead of strictly as was the rule at common law; if a petition is vague and shadowy in its meaning, the law seems to say to the defendant, It is your duty to point out either by demurrer or motion to make more definite and certain wherein the plaintiff’s pleading is defective. That practice is not altogether free from the charge of unfairness, but as already said it is within the spirit of our code of civil procedure and, since it has been the practice so long, we may presume that on the whole it has been found to work out justice.
There is another reason why thes'e defendants have no cause to complain of the absence of the evi
We have said there- was no exception filed by defendants to this report, but we have not overlooked the fact that after the report was filed the cause was re-referred for a finding on a particular question and when that supplemental report came in two of the defendants filed an exception to the finding, but that finding was on a totally immaterial point. Under the law as laid down in the former appeal it was immaterial what the parties may in fact have thought as to the value of the property or how good judgment the officers of the corporation exercised in receiving it as full p-ay for the stock; if the property was not worth the face value of the stock the defendants were liable for the difference.
II. We come now to a consideration of the question, were the defendants entitled to a trial de novo of all the issues 1
We have seen that there were certain facts found by the referee at the first trial and upon those facts it was decided by this court that these defendants were liable to the extent indicated in the opinion and the cause was remanded to the circuit court with directions to proceed to adjust the rights of the parties in accord-' anee with the law as therein laid down. We have also seen that as to the facts so found the defendants did not-avail themselves of the opportunities the law afforded either in the trial court or this court to question the correctness of the findings.
In the face of the fact, as shown by the record, that all the property that the corporation had taken in payment of $300,000 of stock — land, machinery, plant and everything — was sold by the receiver under direction
The trial court did not err in holding that the cause was not open for a trial de nova.
III. The point is made that after McMaster, as assignee of the Providence Jewelry Company, began the suit he made a re-assignment back to the Jewelry company and that the record does not show that the Jewelry Company by order of court was substituted as plaintiff in the cause. That is so, but the record does show that the Jewelry Company after the re-assignment came into court and filed an amended petition reciting the fact of the re-assignment and thereafter assumed the position of plaintiff in the cause and was so treated by the court. There should have been an order of court entered on the record authorizing such substitution, but that was overlooked. We do not think, under the circumstances of this case, the omission was fatal to the further proceedings. Besides, if there was any merit in the point it should have been made in the trial
IV. On the hearing of the cause on plaintiff’s motion for a judgment the evidence showed that the two largest debts of the corporation had been paid since the judgment of this court on the former appeal, and there were left unpaid only a few small debts amounting in all, with interest for several years, to $246.78. Why the receiver did not pay those small ■ cMs out of what was left in his hands of the $4,000' he ■ eived as proceeds of the sale of the tangible property after paying the seven per cent dividend to the creditors does not appear, but at all events the only real contention now remaining in the case is the claim of the receiver that the stockholders are liable to him for $1,000 as compensation for his services and $5,000 a* compensation, for the services pf his attorneys. There was expert evidence on the part of the plaintiff to the effect that $1,000 to $1,500 would be a reasonable amount to compensate the receiver for his services, and that the services of the attorneys were worth $5,000'. There was also evidence that expenses for various items had been incurred by the receiver amounting to $59.75-. The court seemed to take the opinions of the experts as conclusive and found that it would require $6,000 to pay the receiver and his attorneys what their services were worth. Opinion evidence is not conclusive when the trier of the fact is competent to form an opinion of his own. The judgment was that the defendants should pay, in proportion to their stock holdings, sums sufficient to pay the $246.78 debts, the $59.75 expenses, and $6,000 to create a fund out of which to pay compensation to the receiver and his attorneys.
There has been no allowance made by the court to the receiver for compensation for himself or Ms attorneys in the suit in which the receiver was appointed, ¡that is, the suit of McMaster v. The Ozark Onyx Com-
When a receiver is rightfully appointed he is entitled to payment for his services out of the funds that come into his hands as receiver and the amount of his compensation in the first instance is to be fixed by the court which appointed him. If litigation ensues and the receiver needs the aid of an attorney he may, with leave of the court, employ one, and the receiver is entitled to an allowance out of the estate in his hands with which to pay his attorney, the court fixing the amount. It has been held that these fees and expenses when allowed by the court are entitled to be paid out of the assets in the receiver’s hands before other demands. [Alderson on Receivers, p.. 833.] That preference goes on the theory that the services rendered are for the benefit of the creditors or those otherwise interested in the property, and therefore payment for the same is a proper charge on their interest. In the case of an insolvent concern the receiver undertakes to collect the assets for the benefit of the creditors, and it is not unreasonable therefore that the funds collected to pay their debts should be tolled for the cost of collection. If the assets that come into the hands of the receiver are sufficient to pay all the debts in full and a surplus of assets remains the expenses of the administration may be paid out of that surplus. But the appellants raise this point: they say that if they are liable at all it is only for a sum sufficient to pay for the debts of the corporation, that they are not liable for attorney’s fees or receiver’s fees. It is argued that this is a suit ostensibly in the interest of the creditors, that the statute
Our attention is also called to what the defendants regard as an unreasonable disproportion between the amount of the debts established against the corporation, the amount of its tangible assets and the asserted expenses of the receivership. The litigation was begun by McMaster as assignee of the Providence Jewelry Company, stating in his petition that the corporation was insolvent, that it owned about $15,000 of assets, and that it owed the Providence Jewelry Company about $16,000 besides other debts. After the receiv
The case is hardly ready for a decision on the question of whether the stockholders are liable for receiver’s fees and attorney’s fees or, if so, whether the sums now demanded are reasonable, because those questions have not been passed on by the trial court. The only court that can, in the first instance, pass on the question of allowances to the receiver for himself and his attorneys, is the court in which the suit in which the receiver was appointed is still pending, and even then the allowances made by that court in that case are not binding on the stockholders, because they are not parties to that suit. But after the court in that case makes allowances the receiver will be authorized to come into the court in which this suit is pending and ask in this suit for judgment against the stockholders to satisfy the allowances, and then both questions that the defendants now raise will be open. The trial court in this case will then have to exercise its own judgment as to whether the defendants are liable for such fees and if so what is a reasonable amount and from the judgment so rendered either party may appeal.
In the judgment now before us for review the trial court has not decided either that the defendants are liable or that the amount claimed is just compensation; the effect of the judgment under review is to provide a fund of $6,000 out of which to pay the allowances if ever they are ordered, and the surplus, if any, to be returned to the defendants. The course that the trial court took in rendering that judgment is not without precedent and under some circumstances might be proper procedure, but in the case at bar’ there was no occasion to take up the subject before the court in the
Both these are suits in equity in which the original points in litigation have been decided, and they are both held open now only for the purpose of making orders in relation to costs and expenses and to carry into effect the judgments rendered.
The judgment is reversed and the cause remanded to the circuit court with directions to proceed with the cause in conformity with the law as herein expressed.