Matter of Lowther

PER CURIAM.

In the H. LOWTHER. Matter Gerald disciplinary proceeding an original This is

No. 60716. Advisory Committee instituted respondent. The against The Missouri Bar Missouri, Supreme Court cause probable Advisory Committee found En Banc. professional respondent guilty Jan. 1981. filed an information misconduct and Feb. Rehearing Denied answer, After Court. three counts this McMullan, A. David appointed we Hon. master. special circuit judge, retired Judge McMullan During hearing before information was the third count of the After the hear- prejudice. withdrawn with findings his filed ing, special master law in fact and conclusions of respondent guilty professional mis- found recommended conduct on both counts for suspended respondent’s license period year. of one has an enormous amount of

There been put work into his case Advisory Committee, attorneys, attorneys its for master. The respondent, special and our hearing Judge before McMullan lasted for days. The over 1300 transcript six contains pages. There 150 exhibits. As are over “It is report, in his Judge says McMullan example of the the members concern maintaining high legal profession have for time, the same professional ethics at privi- great upon the they place value lege necessity for practice law and protecting privilege.” 1968; alleges Count I that in December respondent position attorney as an used Founders American Investment Cor- for of 2% of certain poration obtain one-fifth precedent to interests as a condition guaranteeing certain corporation’s charge primary loans. The basis for respondent prepared for drafted containing para- his clients an had a mone- respondent graph Beck, Byron Cowden, J. John W. Kansas tary agreement. for City, informants. Ellis, Jr., II 1972 and Springfield, alleges

Ransom A. re- Count that between spondent. in the law firm respondent, partner Corporation payment Founders of American Investment signing 1. 8. In consideration of of Ten aggregate ($10.00) Dollars exceed an and other valuable considera- said notes not to tions, ($200,- sufficiency receipt Dollars sum of Two 000.00), Thousand whereof Hundred hereby acknowledged, and as it is that E. M. Riebold consideration Miller, Fairman, Sanford, of graph Carr and 8. Courts have always been reluc- Lowther, permit parties vary tant to the terms or deposited to his own account in- explain meaning agreements the of written paid by corporate creases in retainers two by parol great evidence.' We have difficul- clients of the firm. ty perceiving legal in any sound basis In disciplinary proceedings such as using the type purpose this of evidence for this, guilt by prepon must be established explaining attorney by of what an meant Weiner, derance of the In re evidence. 547 writing the of paragraph, especially such a (Mo. 1977); S.W.2d 561 banc Matter of financially in an in he was Duncan, (Mo. banc S.W.2d appearance professional interested. The of just misconduct can in instances as some effectively undermine the confidence of the I public integrity attorney of the and legal profession proven the misconduct as The matter before the Court illustrates itself. the danger becoming inherent of personally clients,

involved with affairs of the self duty explain justify The or the actions clients, dealing with of “taking piece or legal profes- conduct of of the members sion, the action”. The with his attorney, supe- or any is not cast profession, other education, Court, rior knowledge upon can this pursue upon person but rather who would as public this course hold himself out to the only peril. at his It is an area charge a member of profession. The wrought with pitfalls traps and the made is sustained subject and the conduct Court is without choice other than to hold to disciplinary action this Court. attorney highest of standards under such circumstances. II findings special The of the master We do necessary not at this time deem it and his are set recommendations forth in might to decide the extent to which we in full as A appendix opinion. to this The the future invoke the Rules of Professional Court finds that the record below sustains Conduct, as our sister state of Colorado has the findings of fact as set forth done, Pittam, People v. 194 Colo. special master. (banc 1977), P.2d 135 to determine the stan- dard of applicable attorneys conduct Court,

At oral argument before this coun- performance partnership agree- of their sel for respondent stated with commendable primary purpose ments. The the Code of candor: “If analysis of the stops Court protection is Responsibility Professional at the four corners of paragraph then Mr. public, protection attorneys not the indicted”, Lowther would stand and then attorneys. from proceeded to ask that we view numerous circumstances determine what re- The us sustains the findings record before spondent drafting para- special intended of fact of the master as to Count II. Mining Corporation they bought United States Lime of America and where tion teen per a fif- Corporation convey per (15%) and Metals of America will four cent interest and received assign Lloyd Parker, (4%) Klondyke to W. E. R. M. cent deal and three Crabtree, Lay deal, per (3%)

W. er, Hubert H. Lowth- Gerald cent of the Morenci that their per (2%) Klondyke a two cent in and to all interest in Morenci and are increased interest Riebold, properties proportionately. acquired now owned or States hereafter E. M. United any properties Mining Corporation and in or assets in Lime and poration and Metals which an Cor- maintained, legal immediately equi- interest is secured or of America shall execute or table, necessary E. M. United States Lime and documents the above Mining Corporation Corporation per (2%) interest and or Metals mentioned two Founders of American Investment shall be under no cent Corporation America. It is understood and that the obligation arrange (2%) two cent for the herein, carries with it addi- borrowing tional interest Klondyke in the Morenci deal and the mentioned deeds, thereof, original assign- part deal referred to in the con- until these conveyances tract with Founders made and deliv- and United States Lime ments and ered. are Mining Corporation Corpora- and Metals testimony four transcript pattern simply We note that respondent’s volumes, which are continuous- pages law dealing was into of self carried over charge contained ly numbered. sup- partnership and to that extent firm first. considered I shall be Count of our conclusion as reached portive I above. Count while Respondent, After alleging disbar, Spring- of law in “To it should be clear that engaged practice [the unethically, unprofes- field, is one who never be at the lawyer] wrongfully, should ” Sullivan, a In re his duties as .... violation of sionally bar S.W.2d and in (Mo. 1973). guilty profes- Giving banc deference to in and lawyer, engage facts, misconduct, I states: circumstances and recommenda- Count sional master, by special found we do not tions use his he did “that in December public protected that the would be or find for and director attorney as position justice ends of would by that the be reached AMERI- OF officer of the FOUNDERS disbarring respondent. Accordingly, he is CORPORATION CAN INVESTMENT indefinitely practice from the suspended advantage by use of personal obtain apply leave to for reinstatement law with corporation, by into contract entered year of one from the date of period after of cer- obtaining one-fifth thereby proceed- The costs of these opinion. this prece- interests as a condition mining tain are, well, ings, against taxed him. guaranteeing cer- corporation dent to DONNELLY, WELLIVER and HIG- con- parties to the tain loans for other . STOCKARD, JJ., Judge, GINS, Special 1-102(A)(4) (5), tract, DR contrary to concur. 5-104(A), Rule 4 5-101(A) and DR DR Missouri.” Supreme Court

SEILER, J., separate concurs in result in opinion filed. 1965, Respondent early In late 1964 or incor- necessary work legal handled the MORGAN, J., in separate dissents dis- IN- OF AMERICAN porate FOUNDERS senting opinion filed. CORPORATION, hereinafter VESTMENT BARDGETT, J.,C. dissents and concurs organ- It was referred to as FOUNDERS. separate MORGAN, dissenting opinion of company to form affiliated holding ized as a J.. companies life insurance in states RENDLEN, J., not sitting. than Missouri. organ- was conceived FOUNDERS

APPENDIX A (he Parker was its by “Tiny” ized W.E. largest stockholder) who acted as its Presi- REPORT OF SPECIAL MASTER (T. 65, Pg. dent of the Board and Chairman 6,May, 483). all of the Board He selected members OF FACT FINDINGS by attorneys and it is conceded both the and the that he the Committee [Count I] figure in was a dominant FOUNDERS disciplinary procedure This is a instituted (T. dynamic man very forceful of the Missouri Advisory Committee Pg. 266). Bar Association H. against GERALD widely corpora- was a held practiced who has law in LOWTHER FOUNDERS Springfield, Missouri. Springfield, headquartered Missouri since 1951. The infor- tion about were there April mation was filed on 1978 in the It was estimated counts; stockholders, outstanding 7,000 holding is in how- Supreme Court and three five million ever, one approximately count was withdrawn with third shares estimated hearing before the It was prejudice during hundred thousand. owned and, of the evi- the directors Special “Tiny” Master at the end 195,000 (T. 817- 190,000 shares dence, Advisory Commit- submitted about times rele- 818). members at all tee. The board vant to this were inquiry Respondent, managed and M.C.A. The U.S.L.M. Lowther, Parker, Gerald H. E. “Tiny” W. acquainted FOUNDERS Board became Parker, Lloyd Houston, through Hubert Lay Mis- with Mr. Riebold Dr. Thomasson souri, (T. 766) (R.Ex.10). Gerald Orscheln of Moberly, James H. Kansas, Topeka, Carter of M. W. Crabtree Dr. presentation, After Thomasson’s Murrell, of Chillicothe and Tim an attorney, Hayes a William FOUNDERS retained (T.

with offices in Topeka, Kansas (who reputable to be a the evidence showed investigate geologist) to Floyd Pat and Hubert Crabtree and to make a recommendation were members Di- Lay of the Board of accompanied (T. 998). Hayes, Dr. Board rectors the MODERN LIFE AMERICAN Lowther, Parker and M. W. COMPANY and the other INSURANCE Crabtree, trip inspection made an of the Board of members with various group talked involved, trip, such agent either as an or investor or engineers and made geologists mining and employee of the MODERN AMERICAN Lowth- inspection property. an Mr. LIFE or were INSURANCE COMPANY er, conducted his own in- Respondent, companies involved in other life insurance mining claim and spection of the learned “Tiny” which had been formed W. E. joint a venture was from Mr. Riebold that Parker. Mr. Riebold and being negotiated between legal representation by MODERN Zurich, Corporation of Joseph Mueller AMERICAN and FOUNDERS divided appeared It it was the Switzerland. Murrell, Lay, Respondent between with Joseph Corporation intention of Mueller Lay handling relating Murrell matters assistance and all fi- provide technological (T. 985), issues, to securities prep- stock Riebold, as nancial assistance and Mr. Gen- aration of prospectus, han- M.C.A. was Manager eral of U.S.L.M. and dling litigation matters for both MODERN (T. 1000-05). supply mining property FOUNDERS, incorpora- AMERICAN and Joseph Mueller tion evidence showed qualification compa- of affiliated an excel- states, Corporation reputed to have nies in other legal require- and the reputation lent of re- with abundance pertaining ments an mining claims in sources, experience. credit and (T. FOUNDERS invested 986). though Even Mr. Riebold owned 100% of stock, pledged all of he had U.S.L.M. 1968,

In January of FOUNDERS became as collateral for a stock to a Mr. Yates mining interested in certain claims New $500,000.00. A letter dat- loan in excess of This Mexico and Arizona. interest resulted 15, the Mueller ed November 1967 from after a Dr. of Springfield Thomasson and a some concern that Mr. Corporation showed shareholder in requested FOUNDERS Riebold was not in control of the complete he be speak allowed an opportunity companies mining two owned the who the Board about the of possibility investing claim. important was considered mining FOUNDERS’ busi- mining operation success of the ness. “Tiny” Parker extended an invitation Corporation provide technologi- Mueller to Dr. appear Thomasson to before the cal assistance and financial assistance in Board January and he did so on order for the Mueller to be- Corporation The mining interests which were thus called joint Mr. Riebold and come venture with to the attention of the Board of Directors of (T. 172,1001) (R.Ex.3). corporations his two FOUNDERS were located in New Mexico and Arizona and were owned and 1,1968, controlled meeting of special On March at a by U. LIME S. & MINING FOUNDERS, CORPORA- Board of Directors of TION, U.S.L.M., hereinafter referred to as whereby was made and carried motion and METALS CORPORATION OF AMER- would offer to all buy FOUNDERS interest ICA, hereinafter referred to as Harvey M.C.A. A Yates in U. LIME & of S. Mr. E. M. wholly Riebold either owned CORPORATION for the sum of or MINING M.C.A. and $250,000.00 to U.S.L.M. and authorized “Tiny” delivered Parker to negotiate negotiated this with Mike Riebold for pur- personally Parker “Tiny” of a land Mr. Yates. chase 15%interest in in which redemption of purchase interest, had an U.S.L.M. 15% interest meeting of the At the March which METALS CORPORATION OF FOUNDERS, informed that it was of Board interest, AMERICA had an a 3% a in U.S.L.M. and interest additional 5% an interest in holdings properties of other Board decided was available but the M.C.A. $245,000.00, sum making pay- total make no further should that FOUNDERS $495,000.00. ment (Stip- FOUNDERS It was then properties. investment in these Facts, 2). ulation Par. an addi- by “Tiny” Parker announced paragraph In Stipulation 3 of the availa- might be tional Facts, it is stated that March Board if the individual members ble FOUNDERS OF AMERICA INVEST- [sic] money. personal desired to invest their own MENT entered agreement into an with E. elected members eight Board Seven Reibold, M. U.S.L.M. and M.C.A. Cor- [sic] claims individually invest in the poration, wherein entered into ne- after which purchase a (15%) fifteen per cent interest in as to the terms gotiations with Mr. Riebold holdings certain Corporation U.S.L.M. of their investment Par. As a (Stip. and M.C.A. Corporation for the stated sum the seven indi- negotiations, result these $245,000.00. addition, $250,000.00 In was vidual members of the Board entered into paid to redeem the stock held by Harvey with Mr. U.S.L.M. Yates. 29, 1968 wherein and M.C.A. March dated

It was stipulated parties that, by Parker, Lloyd the on E. R. M. “Tiny” W. 14, March the Board Crabtree, Directors of Gerald H. Lowth- Lay, W. Hubert FOUNDERS ratified the contract of er, agreed March to Tim Murrell and James Carter 6,1968 and Harvey Yates, separating Riebold, Jr. of LIME U. S. & purchase from Mike all interest in the for U.S.L.M. the sum of and MINING METALS CORPORATION $250,000.00and payment the an addition- a 5%inter- AMERICA CORPORATIONOF $245,000.00 al Corporation to U.S.L.M. and for the sum of in mining est certain claims Corporation Metals for America a 15% $250,000.00 in $250,000.00, paid which interest in certain or may lands owned be in 6). Par. by (Stip. cash the individuals acquired, the future and a 3% 4% inter- the individual urged Parker had in addition, est other claims. In W. E. put Board their own members the to “Tiny” Parker that an announced additional to money in and it seemed undertaking the be might available if agreed of the Board among be the members the Board desired their per- to invest own invest their own good it was a policy money, sonal same under the terms and they in investment individual funds an 6, conditions of the March 1968 agreement faith made for to show their FOUNDERS (CO. 4) Ex. (Stip. 5). Par. (T. 76-77, made in the decisions that were 17, August On 1968 the shareholders of 777). partici- All of the Board members approved Board’s FOUNDERS action pated purchase in the the 5% interest Arizona, mining interests in New Mexico except Mr. Orscheln told the other who 7). and Mexico (Stip. Par. expanding members of the he was Board supply farm store did not have the

While Mr. “Tiny” Parker and Riebold ne- (T. 1018). Each of capital. sevenindi- gotiated the contract of March Mr. equal an paid members vidual accompanied “Tiny” Lowther Parker on apiodnt $50,- They paid interest. undivided 5% trip negotiations and sat in on the while point percentage hence, 000.00 for each was able to prepare contract $33,000.00for each 6,1968. psdd had March stock dated held Mr. FOUNDERS 1014, 779, 905). Mr. (T. point as collateral Yates for a loan Mr. percentage agree- March FOUNDERS, which was redeemed Lowther drafted develop during mining operations attempts ment and was much of the were present attempts were unsuccessful. made but such negotiations. contract On November FOUNDERS point It can said at this that such “Tiny” Parker announced Board met and is not purchase the Board Directors needed in money was order that additional being viewed Master as im- Special New in Mexico mining facilities proper arriving in at a in these decision (Stip. 9). Par. operation. into Arizona proceedings. of his Mr. Riebold and members August 1968 the On shareholders appeared person engineering staff approved FOUNDERS the Board’s action was a gave report and stated there need Arizona, mining investments in New Mexi- $460,000.00(Stip. 9). Mr. Riebold Par. 7). (Stip. co and Mexico Par. put would be used stated that purchased had After FOUNDERS a 15% located properties into operation certain interest and was con- after a 5% interest produce and that would Old Mexico this veyed to the individual members of the properties flow. These lo- substantial cash Board, Lowther “Tiny” Parker Mr. Mexico were unrelated cated in Old Phoenix, Arizona on behalf of traveled in Arizona and located mining operations Mr. to meet with Riebold and FOUNDERS and in- New Mexico in Efforts Joseph Corporation. Mueller an interest had Board members dividual being work the final made to out (Pg. 1075). be- joint details venture contract that, following the Lowther testified Mr. Corpo- Mr. and the Mueller tween Riebold members met meeting, Board Board Although ration. Mr. Lowther was should not informally and decided Phoenix, the time talked Arizona at $200,000.00 Mr. Rie- more than loan including Joseph with the Muel- principals 275, 793). (T. his associates bold and ler, engage nego- he did actually all of his interest pledge However, Phoenix, he left Arizo- tiations. security for the mining operation joint venture impression na with the (COM. loan. Ex. foregone was a conclusion 4, November meeting Board At the to be details remained only certain made, and seconded 1968, a motion was (T. 1053). ironed out. and Gerald “Tiny” carried that 1968, 16, negotiations Prior to October Mexico and trip to Old Lowther make and Mr. Corporation between the Mueller and New in Arizona properties visit the apparent it became Riebold broke off and on opinion bring back their Mexico and Corpora- joint that a with Mueller venture 8). (COM. Ex. matter. would materialize. Mr. Lowther tion Thanksgiving days two before One or explain was at a testified that he loss to inves- 1968, for Mexico Mr. Lowther left pulled out of why Corporation the Mueller Thanksgiving Day, tigate mines negotiations (T. 1054). left for Parker and Mr. Crabtree “Tiny” 1968, 16, On October FOUNDERS investigation begin an Mexico to meeting Board met minutes 1066, and the (T. 1067). P. mines part: in state Lowther, Mr. and “Tiny” Crabtree be probably years “that it would three investigate properties in Parker did before the would mining operations effort to determine whether Mexico in an time, some developed and, present at in the feasible property an investment flow providing had a cash land been sold with Mexican and Mr. Lowther met attor- (Stip. 8). into the Par. company.” engineers to with certain deter- neys and testified, however, mine un- the leases on the Mr. Lowther mine whether 1070,1071). It was about 1968, (T. P. this had real- valid. til October of FOUNDERS conveyed by 2% interest was an all out of its invest- time that a ized no cash flow at 27, 1968 (T. 1056). P. dated November from assignment ment mines Other and Mining Corporation Lime and Parker, to “Tiny” Parker, States Lloyd U.S.L.M. Lowther, will con- M. W. of America Corporation Gerald Crabtree and Hu- Metals Parker, in certain R. Lay mining properties Lloyd bert W. E. assign and vey and Counties in New Crabtree, Grand Sierra Mexico and Parker, Lay Hubert M. W. County and in Arizona. And also a Graham (2%) per two cent H. Lowther a Gerald conveyed by assignment 2% interest now properties in and to all November 1968 from M.C.A. to dated any acquired and owned or hereafter Parker, Parker, Lloyd “Tiny” Gerald an interest properties or assets to which Lowther, Lay W. and Hubert M. Crabtree maintained, equita- legal or or secured Sierra, properties in Hi- in certain ble, Lime by E. M. United States Counties in New Mexico dalgo Catron Corpo- or Metals Mining Corporation and Greenlee Counties in Ari- Graham ration of America. It is understood 10, 11). (Stip. zona P. (2%) agreed per two cent interest carries with it interest in the additional investigated property group the Klondike it had a “lot of Norenci Deal and Old Mexico felt [sic] [sic] potential” price original of silver was to in the contract because Deal referred fair and the wage day minimum and the United $2.00 with FOUNDERS States at the site. and Metals Mining Corporation Lime and America and where Corporation of While arrangements for a loan with the (15%) bought a fifteen cent interest Empire Bank of Springfield were made (4%) per cent of the and received four “Tiny” Parker on November 1968 to the (3%) per Klondike Deal and three [sic] extent that a loan commitment was re- cent of the Norenci Deal that their ceived, [sic] it was not until after the investiga- interest in Norenci and Klondike [sic] [sic] tion was made Mr. Crab- proportionately. are increased E. M. Rie- tree and Mr. Lowther that a promissory bold, Mining United Lime and Cor- States payable note to the Empire Bank $152,000.00 poration Corporation and Metals sum of was made on December America shall immediately execute signed FOUNDERS, U.S.L.M. necessary documents to the above M.C.A.and E. M. Raymond Riebold and (2%)per (T. 85, 799, 1066-1067). Rincon. mentioned two cent interest [sic] FOUNDERS OF AMERICA IN- [sic] On December 1968 an (pre- shall be VESTMENT CORPORATION pared by Gerald Lowther at the direction of obligation arrange under no “Tiny” Parker, FOUNDERS) President of borrowing mentioned was entered into whereby herein, thereof, part until these guarantee a loan for U.S.L.M. deeds, assignments, conveyances are and M.C.A. and Mr. Raymond Riebold and made and (Stip. delivered.” Rincon and certain corporations incor- [sic] porated in Mexico which Mr. Riebold con- 10, special On December 1968 at a meet- trolled or owned. loan “up Said to be to ing of the Board of Directors FOUND- $200,000.00and executed a promissory note ERS, “Tiny” the minutes reflect that Par- for repayment of said sum.” Paragraph 8 ker dated December reported contract of said agreement stated: 4th, whereby agreed sign FOUNDERS to a $200,000.00

“In consideration of the or payment principal time that con- airport at the back to the agreement The March working he was that tract was executed Board by 5% the individual purchase of the claims the Commonwealth on a deal on (COM. 5) to writ- Ex. was reduced members over right there he to them pointed pursuant “Tiny” Par- ing by Respondent Kennicot Pit above Rita on Santa terms ker and Mr. Riebold’s relation he was there, impressive was recited therein is and the consideration only group to sell a on a deal working as follows: we $8,000,000.00 but I do know that that is what in these claims for and he ‘we will money said all have our back I know that Mr. Muel- agreed on and do sell when I this claim and we will be and I do know ler did not close the deal guarantee home free and I will I will I under the same gave that them Again, have it done six months.’ within do know that.” circumstances —I page he said ‘we would all have 613-614, At Mr. Riebold transcript pages our back within six months or he following question: asked would make it to us in some manner understand, I your promise, “And as issuing us some interest and additional did not close if the Mueller deal it, guarantee happen he would it would months, individ- give six would these you not, six months. If it did he would treat equitably uals another 2% so as to more right. us This is the words he told us.” their cost in the investment. distribute kept press- testified the he “Tiny” Parker correct? Is that ing conveyance Mr. Riebold for the 2% after under- general Answer: “We had a Mr. elapsed the six months Riebold I would fatten standing at that time that would I will take care of say, worry, “Don’t something.” if we do position their didn’t it, you boys.” I will take care of a 2% inter- conveyance As to whether the Parker, Respondent, “Tiny” as well as the fear he would not est was influenced conveyance testified that the two cent loan, (Ab- Mr. Riebold testified obtain the had with the nothing granting to do p. 6531) stract as follows: loan. (Parker) even didn’t though “because deposition of Mr. Riebold was read in it, it, meant but say may and he not have evidence testimony contradictory and his is you my position have to understand and incredible with reference to whether I, way, in no want to cast reflections made, promise the nature of the against anyone going because that promise and uncertain as to whether or not I get money, us nowhere. needed the as pressure influence or upon was exerted him you I told before. Mr. Parker was a assignment make the of the additional tough negotiator, and I knew that I had 2% interest to the individual members of other, way to deliver that 2% one or the $200,000.00 the Board in order to obtain the I had better probably felt I (T. loan. At one point pp. 608-609), when ‘Tiny’ deliver was from Par- it but that “Tiny” negoti- Parker and Mr. Riebold were ker.” ating and having argument about 654): question (Abstract p. And as to the price “Tiny” Parker was “Question: So, wanted to be you just pressing him for additional stock he stated: you got you sure that the loan and made “I do not just exactly remember how I assignment get it? did that but I do know I sold them 5% Answer: I think would be an honest and I do know they came another statement.” happened, 2%. As to how that I don’t no evidence that While there is direct know my negotiation but was completely you “if don’t said to Mr. Riebold anyone “Tiny” with ...” will not you to us the 2% point (pp. 613-614), At another Mr. Riebold loan”, ‘got Mr. apparent testified, referring negotiations to his message.’ that: secretary Long, Ira who was Liddell (Parker) “he wanted some more interest M.C.A., testified U.S.L.M. corporation in our for the deal that 892) signed the (Tr. that he deposition put up. officers of the He company 6,1968 secretary dated March to where position wanted to fatten his testi- Now, He further corporations. I don’t of the two injured. were [not] Mr. Riebold in I fied he did not assist just exactly remember what said or how else, agreements. I anything any respect negotiating said it or what I did or He acquainted Certainly, alleged became with a man named six months.” if such W. E. Parker and Pat Crabtree and “Tiny” promise was made and was a consideration Lay Gerald Lowther and Hubert and he agree- in the individual Board members’ heard promise. about the 2% But he heard interest, it should purchase ment to a 5% any no statement Mr. Riebold to of the agreement. have been so stated such testimony members of the Board and his got The fact an interest FOUNDERS upon based what Mr. Riebold told solely $50,000.00 than is no valid reason for less him and he remember when could not agree- in the promise being included promise was to have supposed been made. him- testimony ment. The (Tr. p. 918). many self was to the effect that there were

Ellis B. Harrington Lay, testified that he was who knew of it. Mr. Crabtree and Mr. graduate a engineer and worked at one participated purchase who in the of the 5% U.S.L.M., time for M.C.A. and first as a interest, testified that never heard of consultant, engineer then as an and became an any promise convey such to additional corporation a officer for a time in He Mr. Carter were not 2%. and Mr. Murrell further testified that he was “not in on grantees conveyance named as 2% any” negotiations and he heard no been entitled to although they would have conversation between Parker or Lowther or grantees be so named with the other in the Riebold. conveyance. (Tr. 64), Hubert Lay attorney, E. an There is no evidence that Mr. Riebold’s a member of the Board of Directors of alleged promise convey to to the individ- 2% participated in the pur- FOUNDERS and ual members of the Board was ever men- Therefore, chase of a 5% interest. he would meeting tioned at at any a stockholders be one of the individuals for whom the time. alleged promise yet was made and he testi- Respondent contends that members fied that no one ever told him that there who interest purchased Board going be an additional interest con- $50,000.00 paid point whereas FOUND- veyed them Mr. Riebold. No one $33,000.00 paid point about ERS discussed it in presence. alleged promise “equalize” was made The of Marian Wilson testimony Crabtree cost of the members with the cost Board (Tr. 299), given Advisory before the Com- As the Committee brief FOUNDERS. Bar, mittee Missouri was read in $495,- out, invested points FOUNDERS paid evidence and he stated that he had mining which “in- 000.00 in the interests $35,000.00 $42,000.00 between for an result profit creased the chances for a as a operation but he re- (interest of Mueller’s involvement.” evidence, of, nor ceived no nor did know discussed, promise did he ever hear is dated assignment The of a 2% upon convey any additional 2% condition. before the days November 1968—six agreement by date of the Taking into consideration all the testimo-

H Lowther, Bar, as a member of the Gerald of the “consideration for FOUNDERS part fair open and higher degree of is held to a INVESTMENT COR- OF AMERICA [sic] client is in which his in matters dealings notes,[”] said ... signing PORATION [“]is Respondent’s and layman than a involved will companies that Riebold and his agreed domineering “Tiny” Parker’s emphasis on mem- assign and to the five named not excuse Mr. manner does and forceful of Directors the 2% inter- bers of the Board Lowther’s conduct. est.” It is further stated that FOUNDERS arrange the obligation “shall be under no an interest purchased Mr. Lowther When deed, assign- the borrowing[”] ... until mines, was not neces- acquisition in the his and deliv- conveyance ment and is made but, at in conflict with FOUNDERS sarily clear, language emphatic ered. This persuading was Riebold the time Mr. unambiguous. loan, “Tiny” Par- to obtain a FOUNDERS Mr. persuading ker and Mr. Lowther Respondent’s explanation that of a 2% interest conveyance Riebold for “Tiny” Parker wanted it in there “so that in a conflict- Respondent placed himself line, have along somewhere if we ever ing position. (the alleged to enforce it additional 2% we’d have some acknowl- promise), why pointed should also be out that It Riebold, Mr. that is his edgement from Mr. M.C.A. conveyance by of 2% is not a valid reason for its assets of agreement” reduced the U.S.L.M. lawyer, by

inclusion. Mr. Lowther was the such amount M.C.A. and U.S.L.M. to hold Mr. Lowth- Parker. the latter three FOUNDERS, client, harmless. er’s promise While at the time the oral the evidence Taking into consideration all alleged have been made Mr. Lowther case, handling of the in the Mr. Lowther’s and in may negotiating not have been for incep- from its legal affairs of FOUNDERS FOUNDERS, behalf of not lose yet did tion, phases with all the familiarity his his role as counsel for FOUNDERS. mining in the in- involvement FOUNDERS reported It is in evidence that the Board others, desper- terests Riebold and to the stockholders their investment in the group for urgency ate of Riebold and showing mines but there is no financing, additional and substantial agree- any stockholders were informed of negotiatiations provisions [sic] ment the members would obtain an $200,000.00, the making the loan of additional 2%. It is also in evidence that Respon- agreement by drafting of the loan time, which was so valued at the obli- any from relieving dent conveyed only omitting two five — inter- loan unless the 2% gation to make the persons who should have benefitted. individual stock- conveyed to the est Special Master finds that Mr. Riebold holders, parties, relationship of give general assurances of bounteous resulting interest and personal Lowther’s returns and to relieve indecision of Mr. timing benefit, sequence and personal Lowther, Parker and Mr. made statements events, knowledge of the Respondent’s such will all have back “you your as to but agreements all lead need of written months”, you right”, “I will treat six issue ... conclusion of the one reasonable but one cannot “everything will be fine” attorney position he did use his definite, dependa- raise such “sales talk” to per- to obtain director of FOUNDERS ble, promises. enforceable contract use of the loan advantage by sonal thereby corporation, were oversold into Mr. Parker testified entered of 2% of certain (Abs. 779) obtaining find that such state- one-fifth p. and we to Riebold “selling”. making appear As time interests part ments were precedent big went on returns it was a condition expectations certain loans diminished, faded, corporation guaranteeing then the sales talk of Mr. is further contract. promises parties Riebold became of definite action. Considerations to be used year.” Master that such con- Special found out, production were set such as Committee legal duct is in violation of the ethics firm, business, partner’s a benefit profession. con- “bases to be and other reasonable funds were set four Altogether, sidered.” II COUNT Fund, Fund, a Fixed a Bonus up: Capital a STATEMENT OF FACTS Fund. Income Fund and Incentive II, charge against In Count H. Gerald partner” billings of each The “collectible that, during Lowther is the time from determining partner’s a large part had a in 1,1974, fail March 1968until June he did for con- provisions was also share. There Miller, report pay and to the firm of Fair- firm, recom- sidering special services man, Sanford, Lowther, and of which Carr committee management mendations member, he was a certain retainers which value to partner and overall and other . he received from FOUNDERS MOD- shows that the firm. The evidence ERN and further did take AMERICAN did not function as Management Committee steps to conceal the fact that such retainers reading of the anticipate one would from a clients and being paid by were to him said few, meetings, if any, contract. It had him, by contrary obligation retained to his group, as a did made no recommendations part- to said firm to a written contrary or, as a Commit- not determine allocations nership agreement January entered into in tee, The evidence billings. review the of 1970. understood, partners shows that all the herein, Lowther, however, obligation to Respondent Gerald was an there firm, began compensations law in re- practice Spring- pay into the all field, law firm of Miller work. All members legal Missouri ceived for 1954, cognizant that a and Fairman. In he became a mem- firm who testified Indeed, Miller, existed. partnership agreement ber of the firm of John John Fair- as existed man, partnership of a such very nature William and John Carr. Sanford compensation legal work required here partnership agree- There was no written firm unless there is a paid to be into the 29, ment 1970 on which date January until understanding other- specific definite and partnership agreement a was executed J. wise. Miller, Sanford, P. John F. Weston William of the law Carr, Lowther, Miller was the head Joy- H. F. William Mr. John Gerald began with the ner, Westbrooke, Respondent Jr. and Peter C. firm when Henry He remained Miller and Fairman. firm of Charles. although, firm was dissolved so until the consisted of partnership agreement set- 1971, Miller suffered beginning among many pages over participation his full backs that hindered fees received things, required all retainer agreed be- It was the firm’s activities. deposited partners individual the Bar Com- representing tween counsel 20, (Commitee’s Exhibit firm account [sic] the Re- representing and counsel mittee Page 23). management A committee with health was such Mr. Miller’s spondent that consisted of powers broad was set which hearing testifying at the prevent him and, among its members of the firm three Master. Special before the accounts, drawing was to determine powers, during years of Respondent, 7). It (page withdrawals and advancements fee of $600.00 received a retainer many ques- was authorized to determine AMERI- OF per month from FOUNDERS arise in the division tions that would meet- special At a example, For CAN INVESTMENT. among partners. funds Directors of FOUND- the Board of ing was established which was “Bonus Fund” 13,1972, retainer January and in held partners be divided “between such ERS month per increased $250.00 fee was Management such as the Com- proportions per fee of $850.00 total retainer making end of each mittee determine at the may Development dustrial Commission (Committee Stipulation Exhibit month unbillable, Facts, 2, 1973, 24). March par. things On of this nature that Respondent’s retain- brought FOUNDERS increased politics participation month, making er fee the total $500.00 lawyers that other into the firm business (COM. fee month. per retainer’s for. got credit handled and Stip. par. Exh. get credit for Question: Why 1,1969 From AMERI- January MODERN you didn’t? paid CAN LIFE COMPANY INSURANCE Well, it’s on the breakdown Answer: a retainer’s fee of $600.00 (Tr. the work.” as to who does book January month until when it was 1140-1141). per increased month for a total $200.00 He testified $1,000.00 and, per fee of month in retainer’s Miller) permission go me (Mr. gave “he fee was September of this retainer pars. ahead and do this. (Stip. increased month $500.00 28, 29). do what? Question: To paid by increases above re-my an increase in Answer: To seek separately paid and MODERN were Re- some of the tainer and use them to offset spondent paid and were not into the law out, that bene- expenses that I had been Miller, Fairman, Sanford, firm of Carr and fitted the firm. 30). Lowther increases (Stip. par. Such time Question: you Did tell him at that amounted to a total in excess of to seek? you going how much were Mr. Lowther his own kept by and were how Yes. I I told him Answer: believe purposes. Now, much I I didn’t going seek. response charge Mr. Lowther’s to the and, going get know how much I was “began he Advisory Committee is that asked, ‘why you when didn’t tell this to equities to feel dissatisfied about firm’, members of the Mr. the other in income distribution and the manner guess T for the same responded: Lowther expenses being which the were handled in that, go if I wanted to to the reason (Tr. 1127, 1131). Respondent the firm.” Association of Insurance International claims he was paying disproportion- Pete meeting. go I didn’t ask Council portion expenses ate of the firm. He I go Joyner. ask Bill Charles and I didn’t that, testified in 1971 or in December of an ad- Miller. If I wanted went to Mr. January of he account, I went justment my drawing in “got figures together some facts and on was smarter Miller to John Miller. John how much of the I had been expense together. And put rest of us than all the others, to the paying compared head man. firm, was the this was his making I was many contributions me older than years He was 25 new billable spending and that I was 1144). me, (Tr. he was the boss.” And I things that benefitted the firm. (Tr. 1278) Miller) if I He also testified (Mr. went in and asked him two retainers get my could an increase go part- to the I didn’t “The reason my expenses.” and use these to offset were the partners the other ners was 1131-1141). (Tr. Miller was the one and Mr. problem paying I was more of problem. solve Lowther, Mr. According to Mr. he told put rest of them expenses than the Miller problem were the together. They billings that various up “I had added me to logical one for Miller was the I was to show him what lawyers had had go people go to rather than the ex- I him how much of doing. told I wouldn’t presented problem. comparison to pense paying that I was Mr. Mil- I assumed And anywhere there. told him how much lawyers. the other I them.” it to then communicate serving on the In- ler would time I was spending, Partnership contends that Agreement consent of was not followed. Mr. Miller Respondent’s retention of the testify He did that he knew of no instance increase in the retainers was corroborated where a kept member of the firm a retainer (Tr. Jean 520), Ann Blansit a legal secre- fee turning without in to the firm. who tary worked for the Miller law firm. While he rumors that heard retainer fees Respondent’s brief refers to Mrs. Blansit’s member, retained a firm the first testimony as crucial. Mrs. Blansit testified time he knew about it was at the Bar began Miller, she working for the firm of Committee hearing November of 1977 Fairman, Langford, Carr Lowther (Tr. 710). [sic] He the money further testified in 1971 receptionist as a but worked for in the firm that was to be divided at the John Woods, Miller when his secretary, Mrs. year end was distributed after some- (Tr. 523) left on maternity leave and was (almost one any partner) came with the gone (Tr. 523). for about six months When figures provided as the contract and in a returned, Mrs. Woods she continued on as a session, negotiating another, in one way receptionist. testified she She was Mr. Mil- (Tr. reached. ler’s secretary beginning February 1972. Many preceded by times this was various She testified that Mr. kept Miller a list of checking members of the firm with one bigger accounts and attorney what was (Tr. another and after full disclosure 706- working on them and that Mr. Miller would 707). He testified that Mr. Lowth- further go over (Tr. these retainer fees with me participated er in these discussions and did 528). not part reveal that he had withheld “He told me that the fees of MODERN retainers he obtained in the increases from AMERICAN and FOUNDERS were ade- and MODERN AMERICA FOUNDERS quate, that he pleased with what we [sic], getting were coming and what was into Charles, attorney (Tr. Mr. Peter C. an the firm because being all of it was not 334) brought who was into the firm Mr. fine, used in the firm. That it was we Miller, year testified that at the end of the were (Tr. 530-531)” getting enough. 1970, the members of the firm had each This is stated to have at a happened time attorneys’ billings and that a formula for when Mr. Miller was restricted to shorter allocation the partners fees between set hours in working because of his physical in generally out the contract was followed condition. He had personal trag- suffered a (Tr. 341). He further testified that a final edy in 1970 when his son was killed in July decision as to the allocation was arrived at and, (in of 1970 in following Vietnam 343). partners (Tr. all the He further August) he suffered a stroke. The evidence (Tr. 343) “by testified 1971 John Miller further established “He suffered a heart problems had had some and had health attack in June of 1971 and did not return to on, some further from that time ones — the office September until of 1971.” Mrs. pretty negotiating it was much of session Blansit’s testimony, light of all the year. each Mr. further testified Charles evidence, value, other little if in any, that he partner- examined the books of the corroborating testimony that he had Mr. ship and found no record of an increase Miller’s permission keep the increase in the retainers given to Mr. Lowther the retainer fees above mentioned. and MODERN AMERICAN Charles, attorney

Mr. Peter an who and that he did not know such increase C. until employed by help hearing Advisory the firm to Mr. Miller Commit- that, (Tr. 334) testified tee of the Missouri Bar held on November in the late 1971 and early (Tr. 345-347). partnership decisions were han- dled by partners. other Sanford, (Tr. attorney Mr. William an P. (Tr. 676) 1309),

Mr. William the Mil- Joyner, attorney, who became associated with partner became a firm in 1970 member in ler firm in 1947 and became a always testified that set out in dif- procedure testified “that there very meetings, Mr. Miller had and 1973 how opinion as to ferences [distribution all of not attend past year say should and he did profits of the net little to 1318, 1319). “firm He testified that the meetings. (Tr. be divided.] [”] set forth agreement partnership [...] agreement that the written It is true (Tr. From San- basis for this.” This does respects. many not followed Management Commit- testimony, ford’s however, partners were mean, that the not responsibility of tee not assume the the fees the firm pay into obligated but someone recommending a division failure to such nor does that were earned with the firm income “started out procedures most of the follow all or even going the net was expenses and what destroy the contained in billings person what the of each be and and all release itself or partnership and then drew a draft as to might be the con- imposed by obligations from what may their idea have been as to what arise from the naturally tract and (Tr. 1317) the distribution should be.” as conducted. partnership, 1317) (Tr. He testified negotiations proves that the The evidence least three different usually “we had at held soon profits, over a division possible distri- maybe four different were conducted on year, after each calendar fixing definitely Without who butions. each had a statement premise these, Lowther, but Mr. might propound source the income from what income and instance, and Mr. and Mr. Charles well as statement was received as And usually proposals. had three Carr the evi- It is also established expense. sometimes Mr. Westbrook would [sic] participated Lowther dence that Mr. have These be discussed.” one. would There is no evidence negotiations. these He further testified for his fact Mr. Lowther retained that the we discussed my “In recollection is of the retainer fees personal part own use a them on several occasions and there revealed. any agreement didn’t seem to be that, in strong case Mr. Lowther builds then, subsequently, as I did then and I billings, large per cent of his view of the going negotiated the final distribution amount of ex- disproportionate there was a partner first to one and then another and against his bill- charged of the firm penses coming up talking personally to them activities that participation in ings. His nobody with a distribution which felt ac- and that into the firm brought felt it was the business ceptable everybody but got (Tr. in the firm handled going lawyers best that we were to do.” all, bearing a he was 1317) credit for indicated expense of the share of the disproportionate by stating testimony He corrected this may have Yet, other considerations firm. of meeting that he meant the of the members by other been advanced to with the 1971 business would have do fair meth- claim. The disprove this firm to year. od, however, resolving difficulty his that, He further testified of all to the attention bring the matter meetings which concerned the 1972 distribu- involved. affected and partners difficulties. He stated presented tion more Mr. Mil- testimony that he obtained His Lowther had his idea and that Mr. the in- retain personally ler’s consent at that appeared others had theirs —and it from fees obtained retainer creases up. to break time that the firm was about AMERICAN and MODERN testified, days nego- He about ten spent, reasons; Mr. for several credible hardly to hold tiating groups between the order fair-deal- open for reputation Miller’s up with a together the firm and he came high of-very man as a decision; ing; reputation his that in and he further stated it makes being meticulous distribution, principles; discussing the 1973 consent he would unlikely that recalled in the “again repeat.” highly As he of the Bar attorneys, such an Committee and its arrangement. partici- Miller’s pation partners attorneys Respondent. in the The meeting of of the full purpose hearing days testimony firm for the consumed six allocating prof- transcript pages. and the contains over 1300 revealing its without the retention of fees There are over 150 exhibits. The case was by Mr. Lowther is contrary his fine char- thoroughly prepared exceptionally well acter, persons to which all of the testified. presented by attorneys and briefed both is unfortunate that he was unable to example sides. It is an of the concern the testify. profession have for legal members addition, In at the time of the alleged and, maintaining high professional ethics at consent, Mr. Miller would not know to what time, great they place the same value because, consenting he was whether or not practice law and the upon privilege FOUNDERS and MODERN AMERICAN privilege. necessity protecting would consent to a raise in the retainer To use the words in the case of contained so, if to what amount was unknown either In l.c. Re Houtchens 555 S.W.2d [Mo.] Miller, though to him or Mr. Lowther. Mr. 26, speaking proper of a order: the “head man in the firm” would not have start problem “Resolution of the must authority agree had the to so in view of the of this oft-quoted from the statement between obligations mutual which existed Randolph, court found in In Re partnership, all the members of the includ- (Mo.banc) S.W.2d 91 l.c. 109 that: ‘The ing Mr. Miller. this na- proceeding of a purpose main had a moral and legal ture into the fitness inquiry is to make an obligation to the other members of the firm practice attorney of an to continue in the report the increase. He not relieve pun- objective of law. Its main is not himself of this obligation by assuming Mr. attorney protection ish the but the of the Miller would do so. Mr. Lowther partici- public integ- and the maintenance of the pated negotiations partners with his profession and of the courts.’ rity profits, on several occasions on division objective,’ the ‘main “Whether or knowing that a basis for the decision was noted, just accomplished can in this false; wit, part retention of has been and is case short of disbarment retainer fees. to us. The question grave concern Miller, argument advanced that Mr. law, involves situa- practice generally, occasions, on several consented to a loan or it is present tions wherein ‘stress’ is partner’s drawing increase in a account is have the lawyer capaci- that a imperative precedent alleged not a for Mr. Miller’s to deal with the same.” ty accepted consent and cannot be as such for Respondent reputa- bore an excellent upon loans or the placed increases and with the mem- community tion in the books and could be open easily to all bench and bar. He was active bers of both adjusted the at annual distribution. political, organiza- in civic and charitable finding Special It is the of the Commis- partners tions. His former who testified did, sioner that without Gerald H. Lowther yet, him no ill will and all apparently bore knowledge the or of his authority, consent proven charges of this is no defense to the partners personally deposit improperly acts of miscon- Respondent’s this case. MODERN AMERICAN the judged light of all duct must be personal retainer fees in his own account vi- surrounding his facts and circumstances rightfully belonged and such fees olation. partnership. Respondent suggestion is no There of Law Omitted] [Conclusions behalf of diligently did not work RECOMMENDATION is abundant evidence There FOUNDERS. which law firm of amount of that the members of the There has been an enormous experienced a member Respondent work the put Advisory into this case However, II, undisputed as to Count the great profits difficulties in division of ... out, held without mitigating respondent all these are circumstances that facts are that partners (except knowledge the of the other [People should be taken into consideration belonged to Miller), as fees which Pittam, to John (banc v. Colo. P.2d 135 respon- doubt partnership. I do not 1977).] Miller he talked to John dent’s word that out, As has frequently pointed so been Miller, it, as senior about but not even John purpose punish attorney is not to right authority partner, would have the protect public. but to We believe the as to change the partnership Respondent practitioner would be a useful fees, least knowledge without the of and at in the future if given opportunity. We tacit, express, if not consent do not believe that protection acknowledges others. himself public would be served by disbarment as that he assumed much when he testified this case. We believe suspension accom- Miller apparent would tell the others. It is plishes purpose disciplinary pro- of this in- from the record that Miller did not so ceeding. equally apparent form the others and Accordingly, it is recommended that Re- respondent helped could not have but real- spondent’s license to practice law be sus- ize that were unaware of the others what pended period year for a of one from the is not the doing. my opinion he was In this date of the final judgment in this case. We way partner one should conduct himself further recommend the costs be taxed with fees come respect partnership against Respondent. possession into his and I am further of the opinion that this falls short of the standards Respectfully submitted, I required lawyers. escape see no from S/ David A. McMullan this conclusion and therefore concur in the David A. McMullan result reached in the curiam. Special Master I concur. MORGAN, Judge, dissenting. following

I respectfully dissent SEILER, Judge, concurring in result. reasons: (1) findings As I: the factual to Count result,

I concur in agree but do not and conclusions reached are not sustained that respondent disciplined should be with (2) evidentiary presented; record respect to Count I. In view of what Rie- effect, applied, disregard law tends to bold said as to what he would do about long disciplinary established rule that conveying an percent additional two inter- designed punish “to proceedings are est in event the directors did not their and, (3) reject suggestion I attorney”; (as back in six months they did something inherently wrong or that there is ever) not —then or light and in of the fact attorney partici- in an ethically dangerous $50,000 they paid their per point for others, other- pating clients or against $33,000 paid per point by Found- wise, legitimate business activities. (none ers of this is in I dispute), do not believe we can find say with confidence I As to Count II: do not believe that that respondent position used his as attor- ve- appropriate is an disciplinary proceeding ney to obtain an additional interest as a be- disputes hicle for resolution of financial precedent guarantee condition to Founder’s partners. tween law of the loan to Riebold. I do not believe the general review appellate rule of parol evidence rule that we requires close Carron, 30 found in v. 536 S.W.2d Murphy our eyes disciplinary in this action 1976), discipli (Mo.banc apply does not explanation respon- offered Riebold and Although “findings nary proceedings. dent. of law” found of fact and conclusions merely helpful, they

I are special would dismiss Count I. master are 18

advisory, and not In binding. January shareholder, ultimate a Founders “[T]he responsibility for a Dr. finding Springfield, persuaded the facts is ours. Thomasson permit It is our Parker to him In duty decision, presenta- to make our own to make Veach, re tion to the Founders regarding 365 board of Mo. S.W.2d Weiner, In (banc 1956).” certain claims in New Mexico re S.W.2d claims, about (Mo.banc Arizona. These which Thom- enthusiastic,

asson was quite were owned Mining and controlled Lime and U.S. I (hereinafter Corporation referred to as First, we should find the concerning facts USLM) and Corporation Metals America I, the allegation in Count with an outline of (hereinafter MCA). referred to as It should events made of stipulated facts and un- be noted that Thomasson was himself a disputed In late testimony. early 1964 or shareholder and director of A USLM. Mr. 1965, respondent legal handled the work E. M. owned most of the stock of necessary incorporate Founders of Amer- general manager USLM was the (hereinafter ican Corporation Investment both USLM and MCA. The Founders Founders), referred to as holding compa- acquainted board became with Mr. Riebold ny organized to form affiliated life insur- Thomasson, through although Dr. Parker ance companies in states other than Missou- Riebold, apparently already orig- knew both ri. inally being from the same small town Missouri. Founders was organized by conceived and

W. “Tiny” E. Parker. Parker was the cor- After Dr. presentation, Thomasson’s poration’s stockholder, largest its president, highly regard geolo- Founders board hired a and its chairman of the board. He selected gist, investigate Dr. William Hayes, all was, members of the board and all mining interest and to make a recommenda- accounts, a forceful and man dynamic who tion to the board. was the figure dominant in Founders. February Hayes In traveled to New Founders widely was a held corporation personal Mexico and Arizona to make a headquartered Springfield, Missouri. inspection properties involved. 7,000 had an holding estimated stockholders there, While he talked with engi- various 1,500,000 approximately “Tiny” shares. neers, geologists knowledgeable and other Parker estimated that the directors owned parties published geological examined 190,000 195,000 about shares. The board properties. information on the members at all times relevant to this in- Respondent, and Crabtree accom- quiry respondent, W. E. Par- panied Hayes inspection trip. on this Be- ker, cousin),1 Lloyd (Tiny’s Hubert fore, during, trip, respondent and after the Orscheln, Carter, Lay, Gerald James H. M. investigation concerning made his own Crabtree, W. and Tim Murrell. between Founders and Rie- proposed deal

Respondent, were all Lay, companies, Murrell2 bold’s two USLM MCA. attorneys and handled the legal During investigation, respondent work of Lay Founders. and Murrell legal joint handled learned from Riebold that a venture securities, matters relating mainly being negotiated stock was between Riebold and issues, Zurich, preparation prospectuses. and the Muller Joseph Corporation Switz- Muller). Respondent litigation (hereinafter handled the work for to as erland referred incorporation Founders as well as the and techni- financing Muller was to provide qualification companies general of affiliated in oth- cal assistance while MCA, er states. manager supply was to of USLM and 1. Hereafter bar reference to Parker means W. was admitted to the Missouri Lay practiced E. in unless otherwise stated. in 1951 and in 1928. Murrell practice Topeka, Kansas admitted to and was in 1949.

IQ negotiate Parker to Yates and authorized financing that mining properties. The of a 15% anticipated purchase Muller was to be provide with Riebold “way in the in- had Respondent’s millions.” land in which USLM mining interest in vestigation Joseph Muller revealed interest, had an 15% in MCA an resources, Corporation had an abundance of interest, interests in other and 4% 3% credit and experience. (the “Morenci” and “Klondike” holdings $245,000, making a deals, for respectively) owned the control- though Even $495,000. Founders total investment USLM, pledged he had ling interest Harvey stock to one E. Yates as collateral Parker step trip by next was a The $500,000. letter for a loan in excess of A Mexico, where Parker respondent to New 15, November 1967 from Muller dated with Riebold and negotiations entered into showed concern that Riebold was not sat in on some of Yates. companies complete control the two respondent negotiations. Subsequently mining which owned the claims. 6,1968 agreement March prepared 1,1968, special meeting March at a On $250,000 to agreed pay which Founders board, respondent made a re- Founders which was stock redeem Riebold’s USLM port to the board on the results of his addition, Yates, pay and in pledged to investigation proposed mining deals. $245,000 in considera- to USLM MCA Hayes, present- He then introduced Dr. who as- interests in the tion for undivided 15% report ed a written and oral board. as well as small sets of and MCA USLM Hayes glowing about Also properties. other interests in certain Hayes’ report claims. referred 6, agreement, pursuant to the March location, being “strategic” claims as in a board of di- respondent was named to the close to operating open pit copper mines rectors of both and MCA. USLM Copper Phelps-Dodge, Kennecott both the Founders board March On major copper mining companies. domestic the March 1968 contract. ratified report posi- describes some of the land about “exceptional.” spoke pro- only tions as of a Not was Founders enthusiastic $150,000,000 were the posed Phelps-Dodge project profit; for a so quick chance concentrating plants mills and in the area. so much so individually, Founders directors copper compa- eight It made reference to directors decided to another that seven of the ny, Copper Range, reportedly which had Rie- purchase an interest themselves. $5,000,000 received for sale of recently an additional 5% bold told Parker that had claims which were close claims of to certain was available.3 report mentioned a diatomite USLM. negotiations into then entered (material filters) used in area held seven terms of the as to the with Riebold USLM, Corpora- close to a claim of Drabo As a result of directors’ investment. tion, supposed designing which was to be entered individuals negotiations, the seven 25,- plant capacity facilities with annual respondent, drafted agreement, into an earth, with 000 tons of diatomaceous Riebold, USLM, dated and MCA made 25,000 ton incre- planned future increases 29,1968, individu- whereby the seven March ments. $250,000, pay divided als to and $100,- told the board that if he had Hayes them, among for an undivided equally $99,000 he would invest of it mining properties of USLM interest in the venture. MCA, smaller respectively, well as properties. percent interests in certain heady Hayes’ This was stuff after redeem, option, contained for The also the board voted to presentation, di- the seven $250,000, years, giving held for two by good Riebold’s USLM stock shareholders’ vote to invest Founders Individual directors had on other occasions could money enough they project, parallel have in a should made investments ers, to those of Found- in it. pursuant if to invest their own tenet confidence to Parker’s rectors, or however many extraction, them chose to tures and the drilling, milling so, right buy do an additional 2% interest marketing of raw require huge ore $100,000 more. amounts of money as well as technical ex- pertise. twenty Muller had a million dollar 17, 1968, August On the shareholders of line of credit with Manhattan Chase Bank approved Founders acquisition board’s stated, previously its financing for per fifteen cent interest for Found- Riebold’s to be “way up ventures was in the ers. There was some evidence that after millions.” meeting, formal the shareholders were also informed of the individual directors’ however, September, In began Muller ne- acquisition per of the five cent interest and gotiating with Riebold’s brother on a differ- objection that no was made. ent deal and the late fall Muller had out, respondent points $250,000

As pulled joint out of the venture with Riebold. invested helped protect directors testified he did not know Founders investment. In order protect the reason pulled that Muller out of the claims, the mining Riebold was required to negotiations. do certain assessment work annually and event, 16, 1968, In any on October provide proof of work with the state Founders board met and the board mem- August $495,000 31. The entire put up by bers probably learned that it would be three Founders for its 15% interest was used to years mining operation before the would be retire the claim held by Harvey Yates developed. Founders had realized no cash against Riebold and his companies. Accord- flow from mining its investment ing to published annual report of USLM sought joint claims. ventures to year 31, 1968, for the fiscal ending March develop mining operations but such at- corporation only had cash on $704.86 tempts were not successful. hand, $250,000provided so the badly needed 4, 1968, On November the Founders working capital for Riebold. again board met and Parker announced spring Sometime in the or summer of money additional was needed in order purchased after Founders had the fif- mining facilities in New Mexico teen per cent interest and after the seven and Arizona into operation. interest, directors had purchased the 5% mining engineering members of his staff respondent again traveled to appeared person gave report Phoenix, Arizona on behalf of Founders to $460,- they stated that needed an additional meet with Riebold and the Joseph Muller 000. Riebold use proposed Corporation. Efforts were being made to put into operation properties certain located

work out joint the final details of the ven- expected Old Mexico and that this would ture contract between Riebold and Muller. produce prop- a substantial cash flow.4 The Although respondent was in Phoenix and erties located in Old Mexico were unrelated talked with the principals, including Joseph to the mining operations located in Arizona Muller, he not actually engage nego- and New Mexico in which Founders and Phoenix, however, tiations. He left seven individual board members had their impression joint agree- that a venture respective interests. ment foregone was a conclusion and that only Following certain the board meeting, details remained to be ironed the board out. It was of considerable members importance informally met and decided that involved, $200,- Muller because ven- more than should not loan properties tungsten prop- 4. One of these was a The other mine awas silver mine at Temas- Sonora, erty Mexico, District, Mexico, Soyopa, caltepec, near about 70 Federal about 100 partly completed City. miles east of Hermosillo. A miles southwest of Mexico There was a already per day property mill was in existence at the site. Rie- 200 tons mill on the engineers operation purchased advantageously. bold’s estimated with an could be engineers Riebold’s $52,500 per day, operation profits produce 150 tons would at estimated net $187,500 profits per operation. net month. month from the

21 inspecting proper- After the Old Mexico 000 and his That to Riebold associates. ties, went Parker, respondent, and Crabtree day, arrangements made for same Parker $200,000 Mexico where Parker Empire City, with Bank of to Silver New loan the regard- pledge negotiations all and conducted Springfield. agreed Riebold to Riebold $200,000loan from Found- ing se- mining operation proposed his as the interest Respondent present loan. Riebold that ers curity the testified to Riebold. and the negotiations the on City, during Parker called him in Silver New Mexi- some of $200,- an negotiations co week later tell him the of drafted about a to basis those to return agreement 000 after his go through. loan would sometime the This is December Springfield. meeting Also at the board of November agreement. 4,1968, and the directors voted that Parker trip negotiating should make a to Old Mexi- A after with Parker respondent days few Riebold, along inspect co the Rie- in Silver with Ramon properties City, to for which money. (an to the were of Rie- They engineer employee bold wanted use Rincon and (an bold’s) Long, of MCA to the in Arizona and and Ira officer properties also visit bring opinion USLM), Shortly and as Springfield. New Mexico back their and went to thereafter, 4, 1968, to the wisdom of the loan. December Founders on USLM, agreement with entered into or Accordingly, days one two before MCA, Riebold, Mexican cor- Rincon and two Thanksgiving, left Old respondent by Riebold. porations owned or controlled and, on investigate Mexico to the mines guar- agreement called for Founders 28) Thanksgiving (November Day, $200,000 the above- antee a loan join and Crabtree left for Old Mexico to exe- and for Founders to parties mentioned respondent. investigated All three men the the repayment note for promissory cute a properties Mexico to determine Old repaid by to be loan. loan was whether were feasi- Riebold’s investments year. and within one Found- companies ble. met with Mexican attor- due from ers was to receive 5% of all sums neys engineers and with certain to deter- Soyopa the on both the and Temas- smelter mine whether the on leases the mines caltepec properties. group investigated valid. The the that property agreement, in Old felt it had a December Mexico is the thereof, potential” specifically paragraph “lot of because the of silver price Advisory fair the and minimum at the site the wage primary forms basis day. In last sen- allegations.5 Committee’s the $2.00 (2%) Paragraph provided per cent interest carries 8 of said the two and follows: Morenci deal additional interest original Klondyke to in the payment deal referred “8. In consideration ($10.00) and United States contract with Founders Ten con- Dollars and valuable siderations, sufficiency Mining Corporation receipt and Metals Lime and and hereby Corporation acknowledged, and as con- and where whereof of America bought (15%) per and sideration for of American Invest- cent interest Founders a fifteen Klondyke Corporation signing per (4%) ment said notes not cent received four aggregate (3%) per exceed an sum of Two Hundred of the Morenci deal and three deal, cent ($200,000.00), agreed and Klon- Thousand Dollars it is in Morenci that their interest dyke proportionately. M. M. Riebold States Lime E. E. and United are increased Riebold, Mining Corpora- Mining Corporation Lime and Cor- Metals United States convey assign poration Corporation of America tion America will W. and Metals Parker, Crabtree, immediately necessary Lloyd doc- E. R. M. W. shall execute Lay Howther, two H. two mentioned Hubert and Gerald uments to above (2%) (2%) properties per and Founders cent in and all cent interest Corporation acquired shall now or American Investment owned hereafter obligation arrange properties for the bor- or assets under no in which an interest herein, maintained, rowing legal equitable, mentioned secured or or deeds, thereof, assign- any part until these E. M. Lime Min- or United States conveyances ing Corporation Corporation are made deliv- ments and Metals America. It is ered.” understood $200,000 tence paragraph dispute little loan There is or no facts Founders is are as set forth to this It is point. conditioned Riebold’s and over assignment the 2% purpose and reason for corporations’ conveying first a 2% inter- respondent and his four associates est to five Founders’ directors. This this dispute arises. For facts on sentence, last respondent, drafted by reads aspect, steps must our slightly. we retrace as follows: The reader will noted that when have “E. M. United States Lime and investment, original Founders made its it Mining Corporation Metals Corpora- and $495,000 paid a total of for a 15% interest tion of America shall immediately exe- $33,000 mining claims, per the percent- or cute the necessary convey documents to age point. When the seven directors the (2%) above mentioned two cent bought in, however, paid $250,000 they for a interest and Founders of American In- interest, $50,000 per percentage point. 5% or Corporation vestment shall be no under will be that at the also recalled outset obligation to arrange borrowing plans were joint for a venture with herein, of the mentioned Muller, which would supply capital to thereof, any part deeds, until these as- put production. Expecta- the claims into signments and are conveyances made and high, tions but October it were delivered.” joint apparent became venture “necessary namely, documents” — with Muller would not materialize and that assignment written interests in quick from the investment returns were not signed claims —were and acknowledged by to be. Ira Long Jr., lilis Harrington, each position respondent It is the be- officers in both USLM and MCA on Novem- $17,000 cause of the per point difference ber 1968. When Riebold to went paid between what the directors for their Springfield to 4,1968 execute the December corporation, interest and what the Found- agreement on behalf of himself and his two ers, paid for its and because Riebold had mining companies, he took him and they get assured the directors that would delivered to Parker the two written assign- money their back in six months or he would interest, ments of the 2% with the names them, make difference cost for grantees left Apparently blank. these supposed give Riebold was to the seven assignments were delivered Parker either 2%;7 directors another that that is how the December or 4 and at that time Parker’s 2% came assigned directors secretary typed the names of the assign- $200,000 all; part it was not loan at ees at the direction of Parker. The five that the consideration for Riebold’s commit- Parker, assignees Parker, W. E. Lloyd were $17,000 ment per point was extra respondent M. W. Crabtree Hubert paid directors had for their interest. Lay. Advisory takes the posi- Committee It was at also this time that Riebold tion the March executed guaranteed the first note bought where the directors their inter- 5% Founders, 3, 1968, dated December $250,000 est says nothing for about Rie- $152,000 drew Empire on the Bank of being willing equalize bold’s or adjust Springfield.6 Founders; their cost that of upon money 6. Riebold later executed called two notes: one advance additional from $20,000, 28, 1969, February for dated operating expenses. another time to time for As it $28,000, May 22, for dated out, 1969. apprehension justified. turned their While the record does show what the oth- According respondent, only the reason five up, put respondent ers he testified advanced got of the directors instead of all seven 2% $30,000 approximately additional for $250,000 originally who had interest, invested for a 5% operation. Altogether, respondent Mexican seven, two of the Carter and $66,000 in lost about the entire venture. Murrell, unwilling to become involved they further because feared would be six it, happen it would guarantee 2% the mention an additional only not, he would If then $100,000, months. good for option to 2% for purchase told right. is the words us This that as time went on Rie- treat years; two operating capi- us.” desperate bold became “ tal, used the lever- respondent Parker and back our going ‘We’re $200,000 age loan Riebold seek- deal Muller in six months because from Founders to obtain ing going to completed. They’re to be going paying anything without from Riebold bewill Everything entrance fee. pay an it. then I’ll And don’t you fine. if will percent, then that two you another evidence, documentary from the Aside what to about bring cost down your herein, the evidence on the discussed later ” paid for their interest’ Founders the testi- question largely of above consists respondent. mony “ respondent special before the Only testified your mon- guarantee you’ll T have you testimony of Parker person. master in months, you if don’t in ey back six into the reading from and Riebold came percent two convey you I’ll another testimony their before excerpts record from cost with what Founders equal up your ” its formal Advisory during Committee paid.’ counsel was investigation, present where testimony supported Portions Riebold’s developed during Riebold’s both sides. in an- example, For position. respondent’s testimony serving was currently that he following question: swer to the institution, in a federal year five sentence “ it, as I your promise, ‘And understand from on December stemming conviction close if Muller deal did not was that in court in New Mexico for 1975 a federal give indi- would these you in six months laws, related, violation of securities as to more percent another two so viduals however, any before transactions in in- their cost equitably distribute us. ” vestment, is that correct?’ to what Parker testified as follows as replied: Riebold Riebold told him: “ understanding general had that ‘We “We was also told Riebold on the their I fatten at time that would airport8 at time that way back ” something.’ do if we didn’t position contract was executed that he was work- and later: ing on a deal on the Commonwealth “ I something percent two is ‘That claims, right he to them over pointed this long before agreed with Mr. Parker Kenne- there on the Santa Rita above the did that if I I contract [the loan]. there, pit impressive, cott which was I would deliver not make the Muller deal group he was on a to sell a working deal ” interest.’ percent ... the two eight in mil- an interest these claims for dollars, said, he ‘We will all have lion referring negotiations to his when I sell this claim and money our back that, Parker, testified “ free, guaran- I we will be home and will some interest he wanted more [Parker] I six tee will have it done within corporation deal that in our ” months.’ He company put up. officers told to where According respondent position Riebold wanted to fatten him, Now, re- I don’t they injured. weren’t I how what I said or just exactly member “He said we would all have our else, but anything I said it or what he

back within six months or would make agreed on we do that is what issuing us I know that to us some manner the two gave I them and he would and I do some additional know clear, during negotiations exactly the March apparently ico 8. While this it is not City, 1968 New Mex- contract. conversation occurred Silver “ usually I percent give under the same I ‘ANSWER: don’t any- circumstances. ” ” know that.’ thing away.’ hand, cross-examination, theOn special master found that Riebold said: expressly had never been threatened that if “ ‘QUESTION: You saying you are — get he he wouldn’t didn’t the 2% got point point where at one loan, “got but Riebold nevertheless the mes- your testimony you directly said he didn’t sage.” am hap- I not so sure that is what say you get wouldn’t the loan and then pened. you paused. sort of of respondent’s The fact is that much you “‘ANSWER: Do want me Sure. I defense to Count on hearsay based —fa- tell you why? him, vorable testimony oth- “‘QUESTION: Yes. “ ers as what said Riebold said he though ‘ANSWER: Because even intended to do about the additional two it, say didn’t and he not have may meant interest, cent prove offered to the truth of it, but you posi- have to understand my the matter hearsay asserted. Such inad- tion, I way in no want to case [sic] missible for the purpose offered. State v. anyone, reflections against because (Mo. Granberry, S.W.2d banc going that is us nowhere. I need- 1973); Healy, State v. 562 S.W.2d money, you ed the as I have told before DeGraffenreid, (Mo.App.1978); cf. State v. tough negotiator, and I 57, (Mo. 1972); knew I 477 63 Missouri per- had to deliver that S.W.2d banc two way other, cent one or Evidence, Ed., the and I felt like (1980), 3rd The Missouri Bar it, that I probably had better deliver but 8.1. Other than what is left is hearsay, § that was from Tiny Parker and— testimony respondent, the of Riebold and “‘QUESTION: I understand, but the surrounding plus the documents and cir- why you reason assigned— course, cumstances. is Respondent, per- “ injure involved; ‘ANSWER: I don’t want to not, sonally is although Riebold someone else. credibility subject his is to the fact his

“‘QUESTION: Why you assign conviction in federal court. Riebold’s testi- this two percent, because were you afraid mony equivocal. is of it to Some is the you get wouldn’t the loan? assignment effect that the of the 2% inter- “ honest, perfectly ‘ANSWER: To be I part, voluntary est was on his the fulfill- didn’t feel like it was to going injure me do; along ment of what he said he would all I felt like it would be more benevo- it, however, some indicates that he ar- lent to if I everybody any didn’t take ranged assignment the the 2% inter- chance. $200,000 price it the est because was the “ ‘QUESTION: you just So wanted to loan; it, without the loan would not have be sure you got you the loan and made made, although testimony been this latter assignment the to it? may subject interpretation be the to “ I think ‘ANSWER: that would regardless of the intention ” an honest statement.’ respondent, going simply Riebold was to any jeopardizing take chance of the loan. I Riebold as depo- also testified follows in a testimony sition in a doubt if Riebold’s is sufficient to brought by against suit Founders Riebold: respondent warrant a acted finding “ falling to ‘QUESTION: unethically. It close assignments On these comes

... can you why category says think of reason that when a witness one they should have executed ... other than thing oppo- on direct examination compliance with agreement? cross-examination, testimony site on I don’t why.

“‘ANSWER: remember regarded supporting cannot be as either “‘QUESTION: proposition. “Contradictory evidence your That would be guess best does why they prove to were made? witness relied on to a fact same

25 exception under that is rule parol in the evidence of such fact not warrant submission 1978, 432.010, RSMo or circum- not available. Section explanation absence an other bar, frauds, would also be to which of two the statute of tending stance show writing v. Patton no memorandum versions is true.” Hamilton as there was Co., convey to inter- promise 359 Mo. Creamery concerning S.W.2d (1949). lands. est exactly what paragraph particularly What about either meant respondent So thereof, appearing using the last sentence to wrote, clearly which amounted he prepared by re- December contract loan badly of the needed leverage is and di- spondent? language clear Riebold for 2% from extract the additional of the 2% be- assignment associates, rect —without else re- and his respondent made, obliga- no ing first Founders under of the completely was unaware spondent with the loan. If Riebold proceed tion provision consequences effect and 2% in- promised already had we It Either choice difficult. drafted. directors, respon- including terest former, respondent take the it means that dent, assignments had making and if conduct, in unethical openly engaging receiving nothing do with Riebold’s light, something almost certain come loan, respon- why to see is most difficult pains to conceal took no respondent provided for immediate execution dent to several others. and which known assign- his corporations Riebold and respondent indif- though is almost as be under ments and that Founders was to engaging was openly ferent to whether he $200,000 obligation arrange no conduct, regard no unethical were delivered. assignments loan until the to be- I find difficult consequences. This respondent was never asked di- Amazingly, lieve. rectly Respon- pointedly about this. hand, for not to respondent On the explanation given dent’s had signif- apparent have tenor realized promise them Parker told him an oral worded, way paragraph icance of the (respondent), “Maybe you ought throw sentence, abys- for the last calls particularly something in there if somewhere on down part respondent. of mal denseness on the the have road we to enforce it —and that’s This, too, I find difficult of a to believe did,” very —that’s what I does make not respondent’s credentials. lawyer with The final good sense. words the sen- circumstances, too, equivocal. are The tence not of com- paragraph 8 are words interest were of the 2% assignments The part which he by mitment on Riebold’s 27, acknowledged November dated and perform. They could later be made to are signing of the 1968, to the prior which was now, assignment words before requiring an contract, consistent their 4 December addition, goes any Founders further. In On the of the loan. being not a condition acknowledgement by Riebold that had were not deliv- hand, assignments other the earlier or intended to promised day on or about ered Parker until would be no more than that —it would have contract, is consist- signing $200,000 do nothing to with the loan and being requirement a ent with their it. be no there would consideration give any expla- loan. Parker was unable Advisory would not be enforceable. As assignments prior why, if he had the nation brief, parol in its points out Committee 4 contract the December signing to the be a serious obstacle to evidence rule would nothing do with and if the loan had promise part contending the oral in the con- assignments, paragraph 8 was 29, 1968 contract or the con- March $200,000 loan— part tract. The first recited, tacitly admit- therein sideration 3,1968, $152,000 formalized December explanation using by respondent’s ted —was date, which was actu- signed that 4,1968 by a note some- December contract 4, 1968 the December ally day before writing. is claim of thing in There no be said that might duress, from From this escape contract. fraud so (Mo. banc I paragraph operate put pressure 8 did not personally think that But, hand, questioned Riebold. on the other activity was an “in-house” $200,000 balance of the loan was not turned operation, by with little or concern 3,1969 over to Riebold until March May if is public. thought Even errone- 22,1969, $20,000 $28,000 ous, when notes was twelve happened years whatever signed, respectively, long which was no ago present protect and there is need assignments delivered, after the had been public. respondent as an Conduct recorded, law, otherwise, respects put beyond outstanding all attorney at recall Riebold. But Parker and Found- proves as much.

ers on November 1968 make $200,000loan, Riebold the so it could be said IV assignment that the 2%the interest was certainly If “punishment”, there must be not precedent a condition at all. On the reprimand adequate. would hand, November decision was

merely Founders, a declaration of intent

not binding obligation. money was

not forthcoming later, until a month

which time the assignments were in Par-

ker’s hands. this,

Out of all what we are left with is the conviction there not sufficient Missouri, Respondent, STATE of proof here say with confidence that the v. charge proven. “We have here a state of Vicky Lynn WILLIAMS, Appellant. might facts where a mind reasonable con- jecture thing happened, that one another No. 61740. that something happened, else and a third Supreme Missouri, Court of might agree with either. Sound reason- En Banc. ing, however, point liability does not of the defendant to the exclusion of other Jan. A causes. verdict cannot be sustained 9, 1981. Rehearing Denied Feb. Co., such evidence.” Bates v. Brown Shoe 342 Mo. (1938). S.W.2d

burden of proof respondent violated

any disciplinary upon rule rests the commit-

tee. The evidence and the reasonable infer-

ences therefrom are too uncertain and

equivocal to warrant our finding that re-

spondent guilty I. Count

II noted,

As initially very questionable it is

whether or not disputes part- between law

ners as to the is a division fees matter of

“ethical” concern for this Court. At this

moment, I do not believe that are.

III

A proceeding punish such this not to

an attorney public. but to protect In re

Randolph, (Mo. 347 S.W.2d banc 109[2]

1961); O’Brien, In re 478 S.W.2d of Ten note notes to as ($10.00) Rincon, Riebold, dollars and other valuable consid- with E. M. U.S.L.M. and erations, the receipt development for use in of mines and sufficiency M.C.A. hereby whereof is exe- acknowledged, mining property. As consideration for and as notes, consideration for cuting said note or FOUNDERS FOUNDERS OF AMERICAN paid INVESTMENT would be 5% of all sums due from CORPORA- signing corporations any TION said notes not Mexican to smelter to the exceed an aggregate $200,000.00. peri- sum of note for a parties executing the It proper- that E. M. Riebold years of five on certain named United od ($10.00) ten “For the consideration of dol- “Tiny” that, also ties. Parker announced 1968, considerations, re- on December note was executed lars and other valuable M.C.A., Riebold, hereby with Mr. sufficiency U.S.L.M. Rin- whereof ceipt and Empire Springfield, with the Bank of A con second part acknowledged, parties of made, approve motion to said action give, etc.” passed. (Stip. seconded and P. prior oral any There is no reference to that, stipulation further shows on cost of equalize of Riebold to promise December certain were re- assignments with that of investment of the individuals that, a note was February corded joint Mueller event the FOUNDERS by $20,- parties executed in the sum within six to materialize venture failed May 000.00 and on a note in the months. pursuant was executed to sum Lowther, testified Respondent, Mr. December 4. members con- prior that to the seven board in the mining The investment interest in the min- tracting an interest purchase loss to complete was a both FOUNDERS concerned that he became ing operations, purchased and the individual members who paying more seven individuals were testified an interest. Mr. Lowther than interest percentage point their investment over and above his initial therefore, and, he asked FOUNDERS interest, $66,- purchase “5% lost between why the “Tiny” and Mr. Riebold Parker $67,000.00through his involve- 000.00 make such an investment individuals should New Mexico and Mexican ment $17,000.00 point more price at a (T. 1100). mines.” According had paid. than FOUNDERS Advisory Committee contends: Riebold stat- testimony, Mr. Mr. Lowther’s (Com. p. 29) B. (Abstract p. 1039): ed that that, to the prior 1. execution our back in going “We’re contract, prom- never Mr. Riebold March the Mueller deal is six months because an additional charge ised free convey are They going going completed. to be 2% interest. Everything fee. pay an entrance will 2. paid no consideration was you fine if we I’ll don’t individuals the 2% interest. bring will your then that another 2% and what cost down to about promise 3. oral made Mr. paid interest.” for their prior 29th contract Riebold to the March unenforceable, However, no contained lan- the contract obligates Mr. Riebold con- guage which Lowther use FOUND- Mr. did an interest without addi- vey another 2% undivided ERS’ assets to obtain one-fifth $100,000.00. payment tional does of certain interests. option grant the seven individuals the Board members Respondent contends an additional 2% interest in the purchase that, if a had the assurance U.S.L.M. and assets M.C.A. not consummated with joint venture was deposition testified months, six an addi- Mueller within Joseph promise of Mr. Rie- conveyed to with reference would be tional 2% interest (T. 780, 781) as pp. bold follows: paying so would be them the individuals corporation. price point same on the way told Riebold “We was also

Notes

notes by signing borrow up ny and the evidence presented, Special Riebold, Rincon, principal as U.S.L.M. Master finds that no was made promise also made conveyance M.C.A. Mr. Riebold to Parker and “Tiny” Gerald after the Board of Directors had authorized Lowther to an additional 2% to the Lowther, and Mr. Crab- any individual members of the Board and mining interests and investigate tree to made, promise might have been badly when Mr. Riebold prospects Respondent, contended would not be en- progress at all money, if needed forceable. was to be made. Under Mr. Lowther n own testimony, the 4, 1968 of December promise was not clear and definite. It was to borrow wherein FOUNDERS contingent upon being “the Mueller deal states that as $200,000.00 specifically completed getting our back in

Case Details

Case Name: Matter of Lowther

Court Name: Supreme Court of Missouri

Date Published: Jan 13, 1981

Citation: 611 S.W.2d 1

Docket Number: 60716

Court Abbreviation: Mo.