State ex rel. Pontiac Realty Co. v. Nangle

• Decision Date: 14 July 1958
• Docket Number: C,No. 46693,No. 3,3,46693
• Parties: The STATE of Missouri, at the Relation of PONTIAC REALTY COMPANY, a Missouri Corporation, Arcadia Realty Company, a Missouri Corporation, Arc Realty Company, a Missouri Corporation, Lydiade Investment Trust, a Missouri Corporation and Gustavus A. Buder, Jr., Relators, v. James F. NANGLE, Judge, Divisionircuit Court of the City of St. Louis, Missouri, Respondent.
• Court: Missouri Supreme Court

Page 214

315 S.W.2d 214

The STATE of Missouri, at the Relation of PONTIAC REALTY

COMPANY, a Missouri Corporation, Arcadia Realty Company, a

Missouri Corporation, Arc Realty Company, a Missouri

Corporation, Lydiade Investment Trust, a Missouri

Corporation and Gustavus A. Buder, Jr., Relators, v. James F. NANGLE, Judge, Division No. 3, Circuit Court of the

City of St. Louis, Missouri, Respondent.

No. 46693.

Supreme Court of Missouri, En Banc.

July 14, 1958.

Baron & Freed, David Baron, Charles Bates Baron, St. Louis, for relators.

James J. Milligan, Eugene H. Buder, St. Louis, for respondent.

HYDE, Judge.

Original proceeding in prohibition, in which relators seek to prohibit the trial judge from proceeding against them in the case of Oscar E. Buder v. G. A. Buder, Jr., Executor, et al. on plaintiff's third amended petition, making them defendants, filed in the Circuit Court of the City of St. Louis.

The original petition in the case (in equity for an accounting of the affairs of the partnership of Buder and Buder) was filed on January 2, 1946, by Oscar E. Buder against G. A. Buder and the First National Bank of St. Louis. It was alleged that each partner had a one-half interest and that plaintiff had dissolved the partnership as of January 1, 1946. On November 13, 1953, the Bank filed answer, to the scond amended petition in the case, in the nature of interpleader joining relator, Pontiac Realty Company (hereinafter called Pontiac) as a third-party defendant to assert its interest in property held by the Bank as collateral to a note of Pontiac. The Bank was permitted by consent to deliver this collateral into the registry of the Court and the case was dismissed as to it, leaving G. A. Buder the only defendant, except Pontiac Realty as to the status of which the parties do not agree.

G. A. Buder died on April 14, 1954, and, on May 19, G. A. Buder, Jr., his executor, was substituted as defendant. In January 1955, on motion of G. A. Buder, Jr., executor, Acreage Realty Company (a corporation) was made a defendant by consent of plaintiff, 'on the ground assets of the Acreage Realty Company are intermingled with the assets of the firm of Buder & Buder.' The parties negotiated about making relators defendants but could not agree, and on September 7, 1954, plaintiff had filed a supplemental petition to his second amended petition to bring in relators as additional defendants. This supplemental petition was dismissed without prejudice on September 5, 1956 and on October 15, 1956 plaintiff filed motion for leave to file his third amended petition making relators defendants and this motion was granted on February 15, 1957. Motions to strike and to dismiss the third amended petition were overruled. A referee had been appointed in the case and he had held 108 full days of hearings before relators commenced this proceeding. The supplemental petition, the third amended petition and the motions and orders concerning it are made a part of relators' petition herein. Relators' contention is: 'Respondent lacks jurisdiction over the claims alleged against Relators in the third amended petition because said petition shows on its face that plaintiff, Oscar E. Buder, has not stated and cannot now amend his petition to state a cause of action against Relators of which the Circuit Court would have jurisdiction for the reason that the claims, alleged therein on their face, are barred by limitations and laches.' Relators claim the five-year statute of limitations (Section 516.120 RSMo 1949, V.A.M.S.) applies to the claims of Oscar E. Buder (hereinafter called plaintiff) against them; and that limitations began to run against plaintiff's claims at the time the property in question was taken by claim of ownereship with his knowledge, which they say was January 1, 1946, when the partnership was dissolved, at the latest.

This case presents a situation somewhat similar to that in State ex rel. Connors v. Shelton, 238 Mo. 281, 142 S.W. 417. Here, as in the Shelton case, 'this cause is submitted on the bare pleadings. There is no evidence, no formal demurrer to the returns and no motion for judgment.' As in the Shelton case, after our preliminary rule issued, responent made return 'admitting some, but denying specifically cartain other, vital allegations of the petition' and 'stated facts putting a case to us quite different from that stated in the petition.' In the Shelton case (238 Mo. loc. cit. 286, 142 S.W. loc. cit. 418) 'relators filed a reply, to the effect that they were without information or knowledge on certain allegation of facts in the returns, but averring that 'said matters are immaterial in this case.'' Here, however, relators' reply specifically denies the new matter but does also say these facts 'are irrelevant and immaterial', claiming 'this cause must be determined on the basis of the allegations in Oscar E. Buder's third amended petition.' Likewise, as in the Shelton case, the reply renewed the prayer for an absolute writ and 'neither side asked for a commissioner to take proofs and report.' Our ruling in the Shelton case was: 'Present issues of fact, absent evidence puon which those issues can be determined, and present a reply of the kind indicated, followed by a submission of the case on the pleadings, we may, ex gratia, treat the reply as a demurrer to the returns. In that view of it, we must take all well-pleaded allegations of the returns (not impossible) as true, for the purpose of the case. State ex rel. [Caulfield] v. Broaddus, 234 Mo. loc. cit. 332, 137 S.W. 271. Or, if by way of extreme grace, we take the reply at bottom and meaning as a motion for judgment on the pleadings, the same result would follow, to wit, the wellpleaded averments in the returns would be taken as true, and those averments of the petition specifically denied by the returns would be taken as false. State ex rel. [American Pigment & Chemical Co.] v. Shields , 141 S.W. 585. * * * In no other way can the issues of fact raised by the pleadings be laid out of view, and vitality and sense be given to the submission.' See, also, State ex rel. Reeves v. Brady, Mo.Sup., 303 S.W.2d 22, 23 and cases cited; Clendaniel v. Conrad, 3 Boyce 549, 26 Del. 549, 83 A. 1034, 1052; Ex parte Easton, 95 U.S. 68, 24 L.Ed. 373. While only plaintiff's third amended petition could be considered on the issue of whether a cause of action has been stated, we certainly must consider the facts stated in plaintiff's return on the issue of whether he can amend his petition to state a cause of action against relators. We will, therefore, consider the facts material to this issue shown by relators' petition and exhibits attached, admitted by the return, and also those shown by the return.

Relators are Missouri corporations; Pontiac was incorporated in 1901, Arcadia Realty Company in 1895, Arc Realty Company in 1899 and Lydiade Investment Trust in 1930. Plaintiff and G. A. Buder, brothers, were partners under the firm name of Buder and Buder, from January 1, 1908 to January 1, 1946, each having a one-half intest in the firm with equal rights in the conduct of the business and the assets acquired. There were no written articles of partnership and no agreement as to how long it should continue; and its business was practicing law and making and managing investments in both real and personal property. Each partner received a monthly salary and all money in excess thereof was to accumulate and be invested. Plaintiff was the active member of the firm handling the preparation and trial of lawsuits and G. A. Buder, the senior in age, operated the firm offices, employed all necessary help, supervised and directed the keeping of books and records, made all investments, had possession and control of the assets of the firm, and acted as attorney and counsellor for many corporations and other clients. Relators' offices are in the Buder Building and in recent years G. A. Buder, Jr., (who had been an employee of Buder and Buder) was the chief officer in charge of them. Plaintiff alleges that G. A. Buder withdrew funds of Buder and Buder (amounting to several millions of dollars) and placed them in the names of relators as straw parties; that these funds were used to buy real or personal property, the title to which is held by relators and which they hold as trustee for the use and benefit of Buder and Buder; that the capital of the corporate relators are investments of Buder and Buder; that all of these corporations were improperly contolled by G. A. Buder and G. A. Buder, Jr.; that the books and records of the corporate relators were kept by Buder and Buder; that the accounts of relators were and are continuous running accounts to the present time, receiving as trustee income belonging to Buder and Buder, but recorded on the books of Buder and Buder only to January 1, 1946; that the debit or credit balances in relators' accounts are a part of either the assets or liabilities of Buder and Buder; that the corporate relators have filed claims in the Probate Court against the Estate of G. A. Buder, deceased, as an attempt to recover and convert to their own use money which belongs to Buder and Buder, when at the same time they hold assets of Buder and Buder with profits and dividends amounting to many millions of dollars; and that 'the assets of Buder and Buder are mingled, commingled, and intermingled with the assets, if any, of (relators) .' Plaintiff alleges that there was a net profit of $622,235.04 from the sale of timber lands of the Arcadia Timber Company (Buder and Buder owning 2/3 of the capital stock), in 1919, which G. A. Buder invested in stock of the Burroughs Adding Machine Company and held in names other than Buder and Buder concealed from plaintiff in relators' accounts. Plaintiff also alleges the receipt of a fee of $105,000 by G. A. Buder, in 1909, which he says G. A. Buder placed in his personal bank account,...