150 Mo. App. 102 | Mo. Ct. App. | 1910
A petition in the nature of a bill in equity was filed against James G. Owen, Andrew F. Howe, Hattie Owen and James G. Owen, Jr., but was dismissed before judgment as to all the defendants except James G. Owen; that is to say, dismissed voluntarily by plaintiff against Andrew Howe, Hattie OAven and James G. OAven, Jr., and a decree taken against James G. Owen alone. In February, 1902, Andrew F. Howe and Elmo O. Owen (brother of James G. OAven, husband of Hattie OAven and- father of James G. Owen, Jr.) were joint patentees and owners of the entire right, title and interest in and to letters patent of the United States, No. 678619, for an improvement in Ball Bearing Journal Boxes for Railroad Gars. The patentees
“'For and in consideration of one dollar and other good and valuable considerations, receipt of which is hereby acknowledged, I hereby transfer, assign and set over to James G. Owen, my undivided half interest in and to a certain patent and invention No. 678,619, on a ball journal bearing for railroad and street cars, etc., issued to A. F. 1-Towe and E. C. Owen, July 16, 1901. In trust for the following purposes:
“1st. Said Janies G. Owen shall organize a corporation and transfer to said corporation my undivided interest in and to said patent and invention, and the transfer by said A. F. Howe to said corporation of his undivided one-ha] f interest in and to said patent and invention, in consideration for the entire capital stock, that is for said entire patent interest of said Howe and Owen.
“2d. To transfer to T. F. Leyden 101250 of said capital stock. Said Howe to transfer from his capital stock a like proportion, both in consideration of the advance by said Leyden of $5000 as demanded.
“3d. From the stock in said trustees’ hands 5|500 to be transferred to W. W. Wilcox. Said Howe to transfer a like amount in consideration of services rendered.
“From the balance of said capital stock in said trustees’ hands, he shall retain as his own personal property 21 2-3 [250 out of said capital stock and said Howe shall transfer a like amount to said James G. Owen in consideration of services rendered and to be rendered in the organization and promotion of said company. The balance shall be held by him in trust for Mrs. Hattie Owen and child, James G. Owen, Jr., as their interest may appear, during the full term of patent, reissues, etc.
Elmo C. Owen.
“Attest: F. M. Williams, A. F. Howe.
“I hereby consent and agree to the above conditions this 29th day of April, 1902.
“It is hereby agreed by and between said trustee and A. F. Howe and James G. Owen individually, that the stock held by them shall not be assigned,- transferred nor hypothecated by either or any of them, under any conditions, without mutual consent in writing, duly signed by them; the purpose being to retain centrol of said company in our own hands.
April 29, 1902. “James G. Owen, Trustee,
“James G. Owen,
“A. F. Howe.”
After the death of Elmo C. OAven, his brother James G. Owen, defendant herein, formed a corporation under the laws of the State of Maine, known as the Howe and Owen Ball Bearing Company, with a capital stock of $1,000,000, divided into 10,000 shares of the par value of $100 each, and stood ready to assign to said corporation the half interest in the letters patent Avhich had been assigned to him by his brother Elmo C. OAven. He demanded of Howe that the latter assign to the corporation Howe’s interest in the letters patent, all in accordance with the contract of April 29, 1902. Howe refused to make the assignment and the result was the commencement of a suit in equity by the Howe and Owen Ball Bearing Company against Howe in the United ■States Circuit Court of this district, to compel him to do so. To that suit plaintiff Leyden was a party, as was also a man named Wilcox, who had a slight interest in' the patent, not necessary to be noticed in the present-case. The litigation in the Federal courts ended in the affirmance by the Federal Court of Appeals, of a decree compelling Howe to assign his interest in the letters patient to the corporation and directing the corporation to
“The court doth thereupon order, adjudge and decree, that defendant James G. Owen be and he is hereby perpetually enjoined and restrained from selling, assigning, transferring or in any other manner disposing of or causing to be disposed of to any person, firm or corporation, other than to said plaintiff Thomas F. Leyden, six hundred and forty-five and 5|31 (645 5-31) shares of the capital stock of said Howe and Owen Ball Bearing Company, a corporation, of the par value of one hundred dollars ($100) each amounting in the aggregate to sixty-four thousand five hundred and sixteen and 4-31 ($64,-516 4-31) par value, which has been issued to him as aforesaid, and that said defendant James G. Owen be and he hereby is perpetually enjoined and restrained from either directly or indirectly voting at any meeting of the shareholders of said company the said shares of stock.
“And the court doth further order, adjudge and decree that said defendant James G. Owen now holds title to six hundred forty-five and 5-31 (645 5-31) shares of the capital stock of said Howe and Owen Ball Bearing Company, of the par value of sixty-four thousand five hundred and sixteen and 4-31 dollars ($64,516 4-31) as •trustee for said plaintiff Thomas F. Leyden, and the court doth further order, adjudge and decree that said defendant James G. Owen within ten days from and after the entry of this decree malee, execute and deliver to plaintiff Thomas F. Leyden a full and complete assignment of the capital stock of said corporation so held by him as trustee for said plaintiff, and that the plaintiff recover of said defendant James G. Owen his„ costs and charges in this behalf expended and that execution issue therefor.”
From this decree defendant James G. Owen appealed. '
The suit was filed against all the proper and necessary parties, including Andrew Howe, Hattie Owen and James G. Owen, Jr., but, as stated, was dismissed as to every one except the present defendant (appellant James G. Owen) and the question is whether judgment could be given against him only. In treating this inquiry it is well to recur to the general rules concerning parties to suits in equity, and it will be found the chief principles underlying those rules are these: It is the policy of equity to bind everybody by the decree in a suit who has any right or interest in the subject or object of the suit, which, if he was left free, he might thereafter assert to the prejudice of the parties bound to perform the decree; that is to say, to leave no one exempt from the force of the decree who by subsequently bringing forward some claim against the parties to the litigation, might cause them to suffer a loss in consequence of having done what, the court ordered. It is also the policy of equity to do justice as a whole instead of by piecemeal. But the most fundamental and controlling doctrine of equity procedure is that no decree will be entered Avhich will materially and necessarily affect any person’s interest in the property involved in the litigation, unless he has been made a party to the suit and afforded the opportunity to be heard in defense of his rights.' Those doctrines have given rise to the rule “that all persons materially interested, ■either legally or beneficially, in the subject-matter of a suit, are to be made parties to it, either as plaintiffs or as defendants, however numerous they may be, so that there may be a complete decree, which shall
With these principles in mind let us proceed with the inquiry regarding who were “indispensable parties” to this case, according to the Federal nomenclature, or, what is the same thing, who were “necessary parties” according to the term commonly used in equity procedure. If Andrew Howe was outside the territorial juris
The inquiry will be directed next to the effect of the dismissal of the action as to Hattie Owen and James G. Owen, Jr., for whom defendant held in trust all the stock acquired by him from Elmo C. O’wen by the instrument of April 29th, except his (defendant’s) individual portion. According to the decree of the Federal court, his personal interest is 21 2-3|250 of the shares going to Andrew Howe and the same proportion of the shares of Elmo C. Owen, or 43 1-31250 of the capital stock of the corporation, amounting, as we calculate, to 1733 1|3 shares of the par value of $173,333-1 ¡3. We have said the instrument of April 29th declared defendant’s proportion of the stock should be transferred to him from the holdings of Elmo O. Owen and Andrew Howe for services rendered and to be rendered by defendant in the promotion of the company. It will be observed said instrument did not say any part of the shares plaintiff Leyden would receive should be allotted out of the shares going to defendant for services. On the contrary, said instrument provided that half of plaintiff’s shares should, be transferred to him from the interest of Elmo C. Owen and half from the interest of Howe (making a like provision as to the shares of Wilcox); that from the balance of the stock left in defendant’s hands after those allotments, he should retain the shares to which he was entitled personally for services, and should hold the final balance in trust for Hattie Owen and James G. Owen, Jr. It follows that whatever shares plaintiff is
The instrument of April 29th conferred on defendant no power to dispose of the shares he held in trust for Hattie Owen and James G. Owen, Jr., but merely said he should hold the balance of the shares left in his hands after Leyden, Wilcox and himself had been allotted their proportion “in trust for Mrs. Hattie Owen and child, James G. O'wen, Jr., as their interests may appear during the full term of the patent, reissues, etc.” If defendant was compelled by the decree in this suit to transfer to plaintiff a portion of the shares held in trust for said beneficiaries, the latter might thereafter,call him to account, for their rights would not be concluded by the decree in the present case. That is to say, the decree would force defendant to proceed in reference to the trust property in a manner which would expose him to a suit hereafter by the cestuis que trust, and this is contrary to the procedure in equity. [1 Danial, Chancery, 284; Wendell v. Van Rensellear, 1 John. Chan. 149; Stebbins v. St. Anne, 116 U. S. 386; McArthur v. Scott, 113 U. S. 240, 294.] The rules we are invoking in regard to the necessity of making the beneficiaries parties, are in force under the code system of procedure when the action is in the nature of a suit in equity. [Bliss, Code Plead. (3 Ed.), sec. 109b; Sampson v. Mitchell, 125 Mo. 217, 28 S. W. 768; Dillon’s Admr. v. Bates, 39 Mo. 293; Voorhis v. Gamble, 6 Mo. App. 1; Miller Lumber Co. v. Oliver, 65 Mo. App. 435, 438.]
We consider this to be eminently a case in which a court should refuse to decree the relief prayed in the absence from the record of persons whose property would be taken in the enforcement of the decree; wherefore the judgment is reversed.