163 Mo. App. 451 | Mo. Ct. App. | 1912
This is a suit, filed to the October term, 1907, of the circuit court of the city of St. Louis, against Henry Mayer, Morris Mayer and Frederick Mayer, as stockholders, officers and directors of the A. B. Mayer Manufacturing Company, for an accounting and to recover from them as individuals the amount of a judgment, together with costs and interest, in favor of plaintiff and against the A. B. Mayer Manufacturing Company. The petition, after averring the incorporation of the A. B. Mayer Manufacturing Company, and that it entered upon its business as a manufacturing corporation, avers that thereafter, on the 12th of April, 1897, that company became justly indebted to the plaintiff, on which indebtedness plaintiff, on the date last mentioned, brought action against the company; that afterwards, on the 12th of June, 1902, plaintiff recovered his judgment against the company in the sum of $765' for his debt and $157.55 for his costs in the suit expended and that that judgment thereafter remained and still is unpaid. It
The cause came on for hearing before the court as a cause in equity and resulted in a judgment for plaintiff against the defendants Henry and Morris
Counsel for respondent complains tbat tbe abstract prepared by tbe counsel for appellants does not set out all tbe evidence in tbe case and supplements it by wbat, as we understand, is tbe omitted part. Examining tbat we cannot say tbat it is of sufficient materiality or importance to bave affected tbe result, one way or tbe other, and as we are satisfied we bave practically all tbe testimony before us, we decline to dismiss tbe appeal, or affirm, as we might do, for reason ■ of an incomplete setting out of all tbe evidence in tbe case, it being a suit in equity.
All tbe facts leading up to tbe transfer of tbe assets of tbe A. B. Mayer Manufacturing Company to tbe Mayer Fertilizer & Junk Company are so fully set out in Warren v. Mayer Fertilizer & Junk Co., 145 Mo. App. 558, 122 S. W. 1087, and were-substantially in evidence in tbe trial of this case, so tbat we do not consider it necessary to repeat them, referring to tbe report of tbat case for those facts. Accepting wbat was held in tbat case as to tbe bona fides of tbe transaction as between tbe two* companies, and tbat tbe remedy, if any, was against tbe officers, directors and stockholders of tbe A. B. Mayer Manufacturing Company, plaintiff brought this suit.
In rendering judgment tbe learned. trial court handed down a memorandum giving bis view of tbe case. Reciting tbe facts substantially as in the for-, mer case, and taking up tbe dealings with tbe fund of $12,000, tbe proceeds of tbe sale, by tbe executrix of tbe A. B. Mayer estate, to whom tbe court found tbat
Counsel for appellants make five points for reversal. First, that a dividend,, properly declared, becomes, from the time of its declaration, an enforcible claim against the,company, whether or not a specific fund is set aside out of which to pay it. Second, dividends may be declared on uncollected accounts, supposed to be good, even though the corporation may be in debt. Third, a person or corporation has the .right to prefer one creditor over another. Fourth, the Statute of Limitations does not extinguish a cause of action; it merely bars the remedy. Even then it must be specially pleaded. Fifth, and finally, the transfer of the assets of the A. B. Mayer Manufacturing Company to the Mayer Fertilizer & Junk Company was made for an adequate and reasonable consideration, citing in support of this last proposition Warren v. Mayer Fertilizer & Junk Co., supra. This last proposition is not disputed.
Answering the contention of counsel for appellants, that the payment of the $12,000 by the A. B. Mayer Manufacturing Company to A. B. Mayer’s executrix, had been made on account of a dividend declared some twenty years prior to the dissolution of
We agree with the learned trial court in holding that, speaking generally, it is immaterial whether the $12,000 was turned over by the A. B. Mayer Manufacturing Company to the estate of A. B. Mayer, who had died before the dissolution of the company, in payment of the amount due him on account of the alleged dividend, or was turned over to that estate on account of the stockholdings of A. B. Mayer in the company. In either event and on either theory the two defendants, appellants here, received out of that fund the respective amounts found by the trial court, and in either event it was an unlawful preference or payment under the facts in evidence as to the then situation of the A. B. Mayer Manufacturing Company. Whether the fund of which they received part, came from the payment to the Mayer estate on account of its stock-holdings or on account of its position as a creditor to whom the alleged dividend was paid, these appellants received the benefit of the payment. At the time appellants voted to turn over this $12,000, they constituted a majority of the directors in the A. B. Mayer Manufacturing Company; they used their official positions for their own benefit, and when, as directors, they assented to the turning over of the whole fund realized on the sale of all the assets to the Mayer estate, they were acting in their own interests.
We may concede that the transfer of all of its assets by the A. B. Mayer Manufacturing Company to the Mayer Fertilizer & Junk Compaliy, was made
In the case of Shields v. Hobart, 172 Mo. 491, 72 S. W. 669, our Supreme Court (l. c. 517) distinctly recognizes the broad doctrine announced by Mr. Justice Story in Wood v. Dummer, 3 Mason 308, l. c. 311, that on the dissolution of a corporation the assets of a corporation in the hands of its directors constitute a trust fund which may be followed by the creditors into the hands of any persons having notice of the trust attaching to it. “If the capital stock is a trust fund,” says Mr. Justice Story in that case (1. c. 312), “then it may. be followed by the creditors into the hands of any persons, having notice of the trust attaching to it. As to the stockholders themselves, there can be no pretense to say, that, ‘both in law and fact, they are not affected with the most ample notice.’ ” That is the rule followed elsewhere. Notice being applicable to stockholders, it is, if possible, more so to directors. While the application of this rule to a going concern has been denied, it has always been followed by our courts in cases of dissolved corporations, of corporations out of, or about to go out of, business. [See Roan v. Winn, 93 Mo. 503, l. c. 510, 4 S. W. 736; Kankakee Woolen Mill Co. v. Kampe, 38 Mo. App. 229, l. c. 232-234; State ex rel. Moll v. Brockman, 39 Mo. App. 131.]
Mr. Morawetz, in his treatise on the Law of Priwate Corporations (2 Ed.), par. 787, and following, an-.nounces as settled law that a corporation which has woluntarily ceased to carry on business, or whose right "to use the corporate fund for business purposes has expired, continues to hold its assets subject to the equitable claims of its creditors, and while the legal ownership of the assets of a corporation is not al
Careful reading of the cases cited by the learned counsel for appellants and claimed by him to be contrary to this rule, fails to support that counsel’s contention. They are eases in which the preference was made “in the ordinary course of business,” so far as the corporations are concerned. The case of Shields v. Hobart, supra, is distinctly placed on this ground and is the last and hence the controlling decision. Applying this rule, whether this payment of all the proceeds of the assets of the A. B. Mayer Manufacturing Company was made in settlement of the claim of A.- B. Mayer on the dividend before then declared, or whether it was paid by virtue of his stockholdings in the company, in either event it was paid by the order and on the authority of all three of the directors, these two who received the benefit of the payment being a majority of the board; the payment not made in the or
We are not unmindful of a distinction that does exist between a preferential payment to a creditor and payment or distribution of tbe fund among tbe stockholders. In tbe latter case tbe whole payment may be recovered; in tbe former only tbe excess of tbe amount over what would bave been an equal pro rata distribution among all creditors bolding enforcible claims. No point was made in tbe trial court and none is made here as to this judgment being excessive as against appellants if they received tbe money as creditors, and we do not consider or pass upon it. Moreover, tbe learned trial court found as a fact that tbe evidence tended to show that it was paid to tbe executrix as on account of tbe stock, and not as on account' of tbe dividend claim, in which case tbe defendants, as stockholders, were liable for tbe whole sum received by them.
Tbe judgment of tbe circuit court is affirmed.