*1 Hargadine-McKittrick Mary Markham, Appellant, v. Company. (2d) W. 281. 19 S. Hargadine-McKit Sterling Hildegarde Appellant, v. McKittrick, Company. S. (2d) 281. trick 19 W. One, May 1929.

Division Fordyce, Holliday appellants. & White for *2 Christian F. respondent. Schneider Charles for Williams P. White, Fordyce, Holliday & in reply.

ELLISON, plaintiffs appeal severally C. The two an from ad- verse on their consolidated suits. The causes were tried below, jury being gen- court waived. Each is an action assumpsit. eral appellant Mary sues for Markham $100,000, Hildegarde Sterling and the McKittrick for $15,000.

In February, 1913, they paid subscribed and these amounts re- spectively, for corporation stock of known in the record “Building as the Railway Exchange Build- Company,” which built the request in St. subscriptions Louis. The made respondent Dry under an that it would appellants’ time on hands and issue demand take the stock off equal to them in an of its therefor amount own debenture years. Payment debentures, notes due in five of these case liquidation was to be subordinated ratably the claims and the notes were to share other creditors per bear six cent with its first stock. The notes were to. only payable subject payment after interest, this was to be but to-and preferred stock. of dividends on the first ap- *4 to the Company was never issued of the stock The Dry by respondent

pellants, them to the and was never tendered exchanged notes. The de- be for the debenture Goods to Dry In 1915 Goods them. the never issued to benture notes were instituted in liquidation. suits were went These into contend In circumstances January, 1918. these Dry Company the back Good's from the are entitled to recover Building of the subscriptions common stock to the amount of their very of fact —not foregoing summarizes the issues Company. The may prelimi- be done in a true, well as satisfactorily, it is but as - of the case. a further statement way. proceed to nary We Hargadine-McKit respondent During times here involved engaged corporation a Missouri Company was Goods trick leading The stock Louis. goods St. dry business the wholesale McKittrick Mr. family. of the the members seems, were holders, Hugh Ralph, Messrs. president and McKittrick Thomas H. 932 McKit vice-presidents. appellant Mary

Walter McKittrick were The Hildegarde Sterling trick Markham is their sister. The McKittrick is of Thomas H. the wife McKittrick. respondent Dry

In owned all about Company, con corporate Wm. Barr a retail stock of the cern, acquired running approximately and had leases also certain Louis, 128 in known as the ninety years, covering City Block No. St. build large and office planned “Barr Block.” It was to erect store a Building. Exchange Railway The ing thereon, to be called May Depart to leased to the seven lower floors and basement were be purchase from re Company, and latter was also to ment Stores Fur we understand. spondent Barr corpo be to various railroad ther, floors were to leased about seven May Company agreement with general offices. rations for 1, completion financ 1911, fixed December as a time limit story plans when ing building, and! was at hand for the date starts. this case through year 1911 to Thomas McKittrick had made efforts Mr. Failing in Chicago New York. necessary money in raise the time, over these, owing pressure of turned the matter to to the he through Union Trust syndicate organized the St. Louis finally encountered, and still some of its Difficulties officers. family syndicate McKittrick that the it was determined $2,000,000 common much of put up have cash for that of the common Building Company. The balance new stock of the Company in go respondent to the stock was to promotion years’ leases, ninety ground etc. The details for the 11, syndicate agreement dated in a scheme are set out November 22, 1911, cover November supplemental dated twenty situation was serious. pages printed record. The Com respondent consummated the project If the was not heavy stagnant investments with pany would left down be loaded' facing liquidation; and was leases, Company and the in the Barr necessary working capital cash spare from its unable syndicate arrangement. carry out the family and can- held a conference The members money, they could raise They concluded resources. vassed their outright unconditionally unwilling to invest but were they wanted' was Company. What Company and have the latter money Dry Goods pay taking stock, they back from the for the subscribe But this would stock. first Company its own *5 which, preferred stock, issue of the an increased have necessitated delay, stockholders’ meet- action, legal required turn, would have adopted of their was plan the- notices, So etc. ings, publication

933 subscribing Building for Company exchange- direct stock, able option at their for Dry Company con- Goods as meeting ditioned 24, 1911, hereinbefore recited. On November respondent of the full Dry Company board directors of the Goods unanimously was meeting adopted held. At resolutions were declaring emergency required an immediate existed such corporate waiting action without the matter to the stock- submit formally holders; authorizing foregoing arrangement. and appellant Mary McKittrick Markham contributed preceding purpose fund recited raised for Sterling paragraphs, Hildegarde $15,- appellant and the 000, request McKittrick, both who was brother of Thomas H. the former and husband of the Both knew there latter. respondent was a crisis the affairs of the family stockholders, heavy and

which the McKittrick both left with-, handling entirely H. McKittrick Thomas the matter knowledge paying out the details and without much attention to them. agent Company

The St. Union Trust financial and trustee Louis was Building Company syndicate. for November 1911—the On respond- day following meeting of the of directors of board to the Markham went ent Mi's. —-the $100,000 in placed in hands se- Company’s office and its Trust stating Com- taking the Trust receipt it a curities, back from proceeds $100,- pay her might and out of the pany sell the securities Building Company. At stock of the subscription for common from the re- place receipt she took also back the same time on which she setting the terms out spondent was as follows: subscription. recital making the This Hargadine-McKit agreement by between the this “Now Markham, said Mary McK. Company and trick Mary upon demand of will time agrees that it to it interest, upon tender her successor McK. Markham $100,000 face Company for in said of stock of certificates her in for said transfer, issue to value, endorsed Company as above Dry Goods note of the certificates, the debenture deposit of said cer by a described; form and secured in collateral . ” may determine board additional securities as of such tificates and receipt for : was to be described earlier note as The debenture drawing at the interest its date years “$100,000 payable after five upon the only after dividends (payable per per rate of six cent annum liquidation of upon said stock) and so worded that first will be subordinated said payment of note ratably first with the will share other claims creditors preferred stock.”

934 In December, 1912, part Mrs. Markham was permitted to sell of deposited $100,- which securities, paid time she her on 000 stock subscription, February, and in 1913, she sold the remain- paid securities and subscription. the balance of her Hildegarde Sterling $15,- paid her subscription McEittrick 000 in 1911, cash at the outset 25, on November on the terms same conditions, receipt and the Company issued' Trust its therefor.

During year among 1913 dissension arose the stockholders Diry Company. they A group certain of them contended had Company been to induced subscribe bonds of the on the representation taking McEittrick $300,- that the was family they 000 of stock, very seriously objected the common when they learned Company the board had directors of the protected family against agreeing subscription by to ex- change Company debentures therefor. had Also, the agreed to subscribe for as much the bonds of the as Building Company, proposing latter was to its increase aggregate dissenting $500,000, bond issue which the stockholders Company thought prejudicially Good's affect the Also, corporations value of the bonds. some of the railroad which space Railway Exchange Building had to intended lease were demanding they against liability be indemnified’ on their can- buildings. gave celled leases other All these rise to dis- matters putes litigation. which threatened 11, large

On December number of the stockholders of the signed Company whereby they attempted a contract compose growing their differences out of above matters. The gist McKittrick, was that Mr. Walter one of the personally family, members of the over would take from dissenting stockholders, plus interest, cost bonds of the Building Company they, subscribed, turn, for which had objections points above, on were to waive their save mentioned respect these, provided' With as the debentures. was rights (being contract that the holders of debenture the members of family assigns) McEittrick their should surrender their re ceipts calling trustee; therefor, to the Trust as Mercantile stipulated part all and on conditions or a certain obligations be cancelled and other part rank of lower substituted in their stead. This of the con agreement by contingent signing on tract, seems, was all stockholders. joined appellants in this as- appears

It that both contract and signed Mercantile Trust receipts their debenture therein; Markham provided appellant Mrs. further served and the $100,- she received her when notice on the 000 in demand stock of she would therefor. But the issuance of debentures the contract signed by the stockholders and was not carried out so never ’ rights. far debenture as affected the December, 1914, Thereafter in an'effort was made to avert financial disaster, apparently, by revamping corporate organization of *7 Company. stock the The second and common reduced, existing voting cancelled, were an trust and certain dividends preferred stock, by of and second but were waived holders the first liquidation 1915', company March, all the into spite of it went and at originally and was when these suits filed the time October, of trial in 1924. they not,

Throughout period whole admit had appellants this the yet, procured and have issuance to them common not the they subscribed, Building Company stock in the for which and that Com- they had not and have not tendered this stock of therefor. pany and demanded issuance the debentures they that Indeed, any do not find evidence in the have we record' any con- the on terms or ever demanded issuance of debentures tendering Building Company. ditions, or the in the with without stock any Neither evidence the has is there that debentures, or it would have refused ever refused to issue the that point on is only if had made. The evidence the a demand been against protested Company stockholders that some litigation; threatened there issuance of the debentures and but corporation. nothing is the attitude of to show was Building Company, common record regards in the As stock get the stock or tried appellants fails show the ever demanded managers it; syndicate ever re- or or that them; have been met appellants that the fused to issue it to made; Dry Goods if been or that refusal demand had with such a Building Company or the any way with the Company in connived of the stock. On this syndicate managers prevent the issuance stand, witness, as one put their own of point, appellants on the Robert McKittrick Jones. said: syndicate managers, Mr. He Railway Exchange Building any stock “I am not aware of syndicate Mrs. Markham. The was issued to Company that ever gave anything Markham never to Mrs. managers, my knowledge, [referring receipts receipts to certain $100,000 except those for her in the mentioned elsewhere record]. why given of this stock not -no recollection whatever

“I have syndicate managers. It by is all held stock was her. The anyone except ever been issued to No stock has them. still held . I . . am qualifying shares. issued' directors, who were obligation syndicate that the man- any of breach not aware of agers may guilty they have been which I assumed. As far as they complied know have with agreements, their as the same were modified from to time.” time

I. Under these facts we do how not see of the cir- cuit could court have was, viz., against been otherwise than as appellants. general theory Their they put case is up respective their subscriptions at the re- quest of respondent benefit, its on assurance and agreement they would receive therefor a like amount they might, option, which their exchange for conditioned as They say hereinbefore recited. this was never carried they out and that are money therefore entitled to have their refunded interest; with money and' that the party should from the come paid whose instance in—the Company. But why, and fault whose was it that the contract was not carried out? may Or it not still be carried case, out? This is the nub we see it. -To money entitle them to a return their *8 must discharge

show a way of the in such contract some as leaves them disregard free to it. R. L.C. [2 sec. We find no evidence 21.] of this kind in appellants Dry the record. The contend the Company was at fault objected because certain of its stockholders performance to contract; and because a few stockholders sign refused compromise agreement 11, 1913, the of December appellants deposited: syndicate whereunder the receipts their calling for in Building common stock the with the Company Mercantile trustee, Trust Company, as on such terms that the Goods Com- pany procured could have Building Company the issuance of stock exchanged and could have therefor its debentures or se- grade- curities of a signed lower had the stockholders their —if contract and consented. We not reasoning. Appellants are sure that we understand this do explain why proof not how or that some of the stockholders ob- jected of performance the contract is evidence that the Company carry as a corporation out, failed to it or would performance so have failed if had Neither been demanded. can we anything point a of see sign that few the stockholders refuse to thereby 11, 1913, and thwarted the December arrangement compromise, appellants, by under which the a got exchange have securities of different class for their Build- nothing original stock. had to do with This con- it; tract, but was for and compromise substitute as this contract through, was never executed all the and stockholders fell is out case. undisputed per- is appellants evidence that have failed to They subscription their stock contract their have

form. on side. procured Building Company never from the the common stock for they They which subscribed. never tendered to have stock, properly endorsed, for that certificates and demanded exchange the issuance to them of There is debentures therefor. nothing they see, record so can if far as we show had! they them, they steps, or if taken these should still take could hot so, get exactly bargained they being what for. This cannot they money. disavow their own and contract sue a return their sugges In another supplemental appellants their brief the make They say tion. terms with the that under the of their contract Building agreed the latter to cause the syndicate managers stock or the to issue them the shares subscribed; they or the for which really agmt Company, syndicate, was pertained receipt and of the stock so far as to the issuance money. appellants, is them of their We do not think this so. The Building selves, procure were to the issuance their might keep their it or it .for syndicate but agent, not an pleasure option; own Company arid independently, dealt with the acted Building organizing Com length other stockholders arm’s evidence pany may no corporation. be, there is But however that managers ever withheld syndicate have Company or the subscribed, or that for which common stock from performed for that reason. has been the contract not which nothing in evidence up matter, To sum the whole we find court. overturning the trial would warrant us in legal contention deciding appellants their In we allow to so makes un- along equitable lines. This adjudged be action should ably *9 have been questions which necessary go the technical into by appellants’ counsel. briefed Seddon, CC., Lindsay and concur. is affirmed. adopted C., is opinion by foregoing Ellison, PER CURIAM: The except Frank judges concur, All court. opinion of the as the J., sitting. not Louis, Ap

Joseph St. Association Mech Railroad v. Terminal (2d) 510. W. pellant. S. One, May 1929. Division