Farmers Bank v. Gallaher, 43 Mo. App. 482

43 Mo. App. 482 | Mo. Ct. App. | 1891

Lead Opinion

Gill, J.

“If any company formed under this chapter dissolve, leaving debts unpaid, suits may be brought against any person or persons who were stockholders at the time of such dissolution, without joining the company in such suit,” etc. R. S. 1879, sec. 745. This statute is intended to authorize such, actions as the one here prosecuted by this plaintiff, and this suit is clearly brought; under this statute. It is not a suit in equity, but an action at law authorized by the terms of an act of the legislature. McGinnis v. Barnes, 23 Mo. App. 413; Chouteau v. Dean, 7 Mo. App. 210.

There is, too, no substantial objection to the petition. The allegations of fraud, it may be,'are unnecessary, yet such statements in the petition do not destroy the material portions, nor convert this action at law into a suit in equity. These allegations may be rejected, and yet sufficient remains to constitute a good cause o.f action against the defendant. Clark v. Edgar, 84 Mo. 106. Plaintiff’s petition contains every material allegation required to fasten on defendant a legal obligation to pay the plaintiff’s claim. To hold defendant liable it is only necessary to allege and prove, first, that plaintiff is an unsatisfied creditor of the defunct corporation, the said Terra Cotta Company, and, second, that defendant at the dissolution of the said corporation was the holder of stock therein not fully paid up. These propositions established, it follows therefrom that plaintiff should recover to the extent of such unpaid stock, limited by the amount of his claim against the dissolved corporation. These allegations appear on the face of the petition, and the record abounds with testimony in support thereof. The unpaid stock subscriptions belonged to the creditors of the dissolved corporation to the extent of their claims against it; and this plaintiff, as one of such creditors, had the legal right to subject the same, ora sufficient amount thereof, to the payment of his judgment. Gill v. Balis, 72 Mo. 424, and cases cited.

It is contended by defendant’s counsel that a dissolution of the corporation, the said Terra Cotta Company, must be shown before -a creditor can sue a stockholder with stock unpaid. This is correct, but it is well established that a dissolution will be presumed in favor of the creditors, when it is shown that the corporation has practically surrendered its corporate rights, has ceased to do’ business and has transferred all of its assets. Instruction, numbered 3, given by the court on plaintiff ’s motion is a clear declaration of the law as applied to this case. Kehlor v. Lademan, 11 Mo. App. 550, 553.

We have considered in detail the several different points raised in defendant’s brief, and have here given our views on such as deserve notice in an opinion. We conclude, from a review of the entire record, that the cause was fairly tried and submitted on instructions clearly declaring the law of the case, and that the judgment should be affirmed.

All concur

---

Rehearing

ON MOTION FOB BEHEABING.

Gill, J.

Defendant’s counsel asks a rehearing,and, with characteristic persistency, urges again, practically, the same points already made and passed on. It is not the purpose of these motions for rehearing, to let in simply a reargument of the case, but such motions “ must be founded an papers showing clearly that some question, decisive of the cause, and duly presented by counsel in their brief, had been overlooked by the court, or that the decision is in conflict with an express statute, or with a controlling decision to which the attention of the court was not called.” Rule number 20 of this court. However, through deference to the efforts of industrious counsel, we have traveled over the way again, and have this to say in addition to what has already been said.

I. It is again zealously contended that we are wrong in considering this proceeding as an action at law. It is said by counsel to be a suit in equity, pure and simple. Now, however this may be, is defendant in any situation to complain ? He has all the time until his appearance in this court treated the action as one at law. From the tiling of the petition to a verdict and judgment in the circuit court, defendant never, in a single instance — by objection or ^suggestion — sought a trial of this cause as equity suits are heard. He appeared, filed answer, went to trial before a jury, submitted instructions and argued the case ; all, in the circuit court, and never once suggested even that the suit was one of equity. More than this, in his motions for new trial and in arrest of judgment, no objection was made as to the form or manner of trial, or that said action was erroneously tried as a suit at law. Hence defendant cannot complain now. Still we adhere to what has already been said. This is an action at law and not a suit in equity. For- additional authorities see opinion by us in Bagley v. Tyler, ante, p. 195, and cases cited. Hodgson v. Cheever, 8 Mo. App. 318.

II. Again we are blamed in not writing something in answer to the point made as to the alleged invalidity of plaintiff’s judgment, which it had obtained against the corporation, and which serves as the basis of this action. Our excuse for this alleged omission is apparent from the face of the record, since-no question of that nature was ever made in the court below, and hence cannot be made here. The record, as presented by defendant (page 9 of his abstract) states, that “the plaintiff, thereupon read in evidence the judgment roll in case of Farmers Bank of Frankfort, Indiana, plaintiff, v. Montserrat Terra Cotta Company, which was as follows.” Then follows a judgment against the company in the usual form of judgments by default. Defendant in his abstract accompanies this judgment with a copy of the summons and sheriff’s return of service thereon. Plaintiff corrects defendant’s abstract of record by inserting the following from the bill of exceptions, to-wit: “Plaintiff next introduced in evidence the petition, note, judgment and execution” in the above-entitled cause, and asserts that the summons and return were not introduced by either party. This being so, then any objection as to the service, as may be shown by the return on the summons, is not in the case. Admitting, however, that it was, yet the record shows no-objection made in the lower court. The evidence was not objected to, nor was the attention of the trial court ever called to the point now made in this' court. Hence, in no event, do we regard this as a question before us.

III. It is strenuously insisted that even though defendant may have taken the stock of the corporation, as full paid by a clear overvaluation of his property, yet in order to hold him for the difference between the par value of the stock, and the .property, fraud must be alleged and proved. The argument of counsel, on this point, it is conceded, is able and plausible, and his position,too, is sustained by respectable authority. However, the question is settled in this state, and adversely, too, to counsel’s contention. Shares of stock issued by the corporation to its stockholders at less than its par value — whether for cash or for labor, materials or other property — are, in this state, held to be chargeable by the corporation’s creditors for the difference between the cash paid, or labor or property furnished, and the said par value. Such a transaction is regarded as a mere partial payment on the stock, and the stockholder is held liable for the balance regardless of the question of actual fraud. Shickle v. Watts, 94 Mo. 410; Chouteau v. Dean, 7 Mo. App. 210; Kehlor v. Lademan, 11 Mo. App. 550; Pickering v. Templeton, 2 Mo.App.424; Thompson Liability of Stockholders, secs. 127, 201. “The stock * * * of a corporation shall be issued only for money paid, labor done, or money or property actually received,’’etc. R. S. 1879, sec. 727. Some dis: tinction seems to be made by some of the text-writers and courts where the fictitious stock is issued for a discount in cash or for overvalued property, as in authority cited by defendant’s counsel. Cook on Stock & Stockholders, sec. 42. It is there admitted that where the issue is for cash for any amount less than the par value, then fraud need not be shown. In this state the rule is said to be the same, whether the stockholder gives money or property for the stock. Shickle v. Watts, supra. Nor do I see why any different rule should, apply. As said in Chouteau v. Dean supra: “The' directors have no more right to accept property worth manifestly less than the face value of the stock, than they have to take depreciated or counterfeit currency as an equivalent on the same face value.” Page 215. And as announced in Kehlor v. Lademan , supra, page 555 : “Creditors have aright to claim, that, for every share issued to him, the stockholder shall render to the assets its par equivalent, in money or property, or shall be responsible to the creditors for whatever may be lacking to make up such equivalent.” These decisions from the St Louis Court of Appeals are cited with approval by the supreme court in Shickle v. Watts, supra, p. 417.

Motion for rehearing overruled.

All concur.