Foster v. Mullanphy Planing-Mill Co.

• Decision Date: 16 May 1887
• Citation: 92 Mo. 79,4 S.W. 260
• Parties: FOSTER v. MULLANPHY PLANING-MILL CO.
• Court: Missouri Supreme Court

4 S.W. 260

92 Mo. 79

FOSTER v. MULLANPHY PLANING-MILL CO.

Supreme Court of Missouri.

May 16, 1887.

1. ATTACHMENT — FRAUD — CORPORATIONS.

The fact that an insolvent corporation makes a deed preferring some creditors, including some of its directors, does not give an unpreferred creditor the right to take out an attachment at law charging the corporation with attempting to defraud its general creditors.

2. CORPORATIONS — BY-LAW — CONSTRUCTION.

Where a by-law of a corporation provides that a majority vote of the directors shall determine the action of the body, held, that a majority of the whole number of the directors must be present; but, if a majority of those present concur in a resolution, it is binding.

Appeal from St. Louis court of appeals.

A. M. Berry, C. B. Stark, and J. L. Torrey, for appellant. H. J. Grover, for respondent.

SHERWOOD, J.

Action brought August 9, 1883, on four promissory notes for $1,600 each, dated September 14, 1881, and maturing in two, three, four, and five years after date. At the time of filing his petition, plaintiff sued out an attachment, based on the grounds that the defendant had fraudulently conveyed and assigned, and had fraudulently disposed of, its property and effects, so as to hinder and delay its creditors. Schureman and Gibson were summoned as garnishees. Defendant, in usual form, pleaded in abatement of the attachment. The issues thus raised were submitted on the following agreed statement of facts:

"(1) That the defendant is a corporation duly organized under the laws of the state of Missouri.

"(2) That on the fifth day of May, 1883, the defendant executed and delivered the deed of trust, hereinafter mentioned, to Jos P. Schureman, to secure certain indebtedness in said deed of trust described, which deed of trust was executed under authority of a resolution of the defendant's board of directors, passed April 30, 1883.

"(3) The number of directors of defendant company was fixed at thirteen persons, and on the said thirtieth day of April, 1883, the following persons constituted the board of directors of the defendant: F Lohse, H. Richter, H. Sunderman, F. Rose, H. H. Bruning, J. Nieman, F. Germer. Wm. Nolkemper, L. G. Twiehaus, W. A. Stender, C. H. Meyer, Henry Giese, and William Piel, — all of whom, except Giese and Piel, the two last named, were present when the said resolution authorizing the execution of said deed of trust was adopted. All of said directors, so present, voted in favor of said resolution, except J. Nieman, who voted against it.

"(4) That defendant's note for $2,500, due May 21, 1883, mentioned in said deed of trust, was indorsed jointly by F. Germer, Meyer & Stip, William Leori, and John Stoeppelworth, for the accommodation of said defendant, and discounted by the defendant at the Mullanphy Savings Bank, and that the defendant received the entire net proceeds, in cash, of said note so discounted, and used the same in carrying on its business: that this note, at the time said deed of trust was executed and delivered, was held and owned by the Mullanphy Savings Bank.

"(5) That, at the maturity of said note, on or about May 21, 1883, the said accommodation indorsers, their liability having become fixed by protest, took up and paid said note by substituting therefor their own note, which was accepted by said bank in payment thereof and defendant, failing to pay its note when due, the indorsers aforesaid paid it, and became, and ever since have been, the owners and holders thereof.

"(6) That the note mentioned in said deed of trust for $674.70, due May 30, 1883, and payable to Meyer & Stip, was given for money loaned to defendant by said Meyer & Stip.

"(7) That the said C. H. Meyer, who was one of the aforesaid directors of the defendant, was a member of the firm of Meyer & Stip, to whom said last-mentioned note was payable, and who were indorsers on said $2,500 note.

"(8) That F. Germer, having an open account against the defendant for $236, William Nolkemper, having an open account against the defendant for $47.35, and W. A. Stender, having an open account against the defendant for $33.15, all of which accounts were included in and secured by said deed of trust, are the same persons who were members of said board of directors aforesaid, and the said Germer is the same person of that name who was also indorser on said $2,500 note.

"(9) That all the indebtedness mentioned in and secured by said deed of trust was a bona fide liability of said defendant to the persons and in the amount therein named, and as therein expressed, existing at the time said deed was executed.

"(10) That section 5 of article 3 of the by-laws of the defendant is as follows: `A majority vote of the board of directors shall, at all times, determine the action of that body.'

"(11) The deed of trust aforesaid is hereby offered in evidence, and shall be considered a part of this agreed statement of facts. All questions of competency and relevancy of said deed are reserved, but its execution is admitted.

"(12) That the said claims of said F. Germer for $236, of W. A. Stender for $33.15, and of said William Nolkemper for $47.35, mentioned in the said deed of trust, were for labor done and performed by said persons, respectively, for said defendant, at its request, for which demand was made by them of defendant, on the day said deed of trust was executed, and said indebtedness accrued within three months next immediately preceding the day on which said demand was made.

"(13) That the notes sued on were executed on the fourteenth day of September, 1881, and matured as stated in the affidavit to attachment herein by the defendant, and the plaintiff is the legal holder for collection thereof.

"(14) [Unimportant.]

"(15) That, on the day when the said deed of trust was executed, said defendant was insolvent, but said deed was not fraudulent in fact, nor was it executed or received for the purpose, or with any actual fraudulent intent on the part of the parties thereto, or any of them, or on the part of the board of directors, or either of them, of hindering or delaying any creditor or creditors of said defendant, but said deed was executed and received by said parties in good faith, and for the bona fide purpose of securing the claims therein mentioned."

The deed of trust also formed a part of the agreed statement, but it is unnecessary to insert it here.

On this agreed statement the circuit court found the issues...