Avery v. Central Bank of Kansas City

• Decision Date: 31 May 1909
• Citation: 119 S.W. 1106,221 Mo. 71
• Parties: AVERY et al. v. CENTRAL BANK OF KANSAS CITY et al.
• Court: Missouri Supreme Court

119 S.W. 1106

221 Mo. 71

AVERY et al. v. CENTRAL BANK OF KANSAS CITY et al.

Supreme Court of Missouri, Division No. 1.

May 31, 1909.

1. APPEAL AND ERROR (§ 192)—QUESTIONS IN TRIAL COURT—PLEADINGS—SUFFICIENCY.

Where the pleadings were treated in the trial court as sufficient to direct the court's attention to the real controversy, which was adjusted by the court, the question of the insufficiency of the pleadings to present to the court any issue would not be considered on appeal.

2. APPEAL AND ERROR (§ 879)—WHO MAY ALLEGE ERROR.

A party obtaining judgment who does not file a bill of exceptions nor take an appeal cannot require the court on appeal to consider his objection to the introduction of evidence.

3. CORPORATIONS (§ 149)—HOLDERS OF STOCK —BONA FIDE PURCHASERS.

One taking by gift from his father stock in a failing bank is not an innocent purchaser, but holds the stock subject to any equities existing in favor of the bank or other stockholders.

4. CORPORATIONS (§ 629)—DISSOLUTION— DISTRIBUTION OF PROCEEDS.

In winding up a corporation and making distribution among the shareholders, the court must try controversies involving disputes between the stockholders, especially where issues are framed and submitted to the court without objection.

5. CORPORATIONS (§ 629)—DISTRIBUTION ON WINDING UP CORPORATION—RIGHTS OF STOCKHOLDERS.

In winding up a corporation, every stockholder is entitled to participate in proportion to the number of shares held by him.

6. CONTRIBUTION (§ 5)—JOINT WRONGDOERS.

There is no right of contribution between joint wrongdoers either at law or equity.

7. ACTION (§ 1)—GROUNDS—MISCONDUCT OF PLAINTIFF.

No one can make his own misconduct the ground for an action in his own favor.

8. ACTION (§ 1)—GROUNDS—PARTIES BOTH AT FAULT.

Where the fault is mutual, the law will leave the case as it finds it.

9. EQUITY (§ 65)—MAXIMS.

He who seeks equity must come into court with clean hands.

10. CONTRIBUTION (§ 5)—JOINT WRONGDOERS.

The rule that there is no contribution between joint wrongdoers applies between members of a corporation who have conspired to defraud it.

11. CONTRIBUTION (§ 5)—JOINT WRONGDOERS.

The rule that there is no contribution between members of a corporation who have conspired to defraud it applies as between members, though the share of one joint wrongdoer may be benefited by an increment of gain from a judgment recovered in the name of the corporation against a joint tort-feasor.

12. CONTRIBUTION (§ 5)—JOINT WRONGDOERS.

Where a corporation in its own name collected a judgment from a joint tort-feasor and placed the proceeds in the corporate treasury, the proceeds inured to the benefit of the corporate creditors and to the benefit of all the stockholders, and the joint wrongdoer, who was a stockholder, could not enforce contribution against the other wrongdoer who was also a stockholder.

13. JUDGMENT (§ 720)—RES JUDICATA.

A judgment in an action at law by a corporation against a stockholder for his misconduct which fixes the liability of the stockholder, and which is subsequently paid by the stockholder, is res judicata, and the court in winding up the corporation is without power to order a repayment of a part of the judgment on the ground that another stockholder was a joint wrongdoer.

Appeal from Circuit Court, Jackson County; W. B. Teasdale, Judge.

Action by D. A. Avery and others against the Central Bank of Kansas City and others for the appointment of a receiver of the bank, in which Sallie M. Thayer, administratrix of George E. Thayer, deceased, filed a petition for the distribution among the stockholders of the bank, the surplus remaining after the payment of debts. From a judgment denying relief, the administratrix appeals. Affirmed.

Douglas & Watson, for appellant. Gage, Ladd & Small, for respondents.

LAMM, P. J.

The Central Bank of Kansas City went into voluntary liquidation in 1891. Subsequently (while in process of winding up) its affairs were lifted from the hands of its officers and put in charge of Strother, receiver, in the suit of D. A. Avery et al. v. Central Bank et al. Geo. E. Thayer was elected cashier of the bank in 1888, was acting in that capacity when the bank closed its doors, and afterwards had charge of its assets and business until said receivership. Presently Strother and the bank brought suit against Thayer; the object being to recover sundry items of the bank's funds wrongfully converted by Thayer. In one count of the petition it was charged that he wrongfully and fraudulently took $2,550 out of the moneys and property of the bank, deposited it to his individual account, and converted it to his own use under color of a pretended sale or transfer by him to the bank of 25 shares of his stock, all done without any knowledge of the officers and stockholders. In another it is charged that one J. W. Sponable was the owner of 25 shares of stock, and that Thayer, wrongfully and fraudulently colluding with Sponable, wrongfully took from the moneys of the bank the further sum of $2,550, and deposited the same to the credit of said Sponable, which sum said Sponable converted to his own use; that this was done under color of a pretended sale or transfer to the bank of said 25 shares of capital stock; and that the wrongful conversion was without the knowledge of the officers and stockholders of the bank. These conversions are alleged to have been of the date of January 31, 1890. On tender of the stock back by the receiver, demand for the return of the purchase price, and refusal to pay, the bank and receiver sued for that and other items. The blocks of stock so transferred to the bank are known as the "Cowling stock." It seems that Cowling owed the bank; that he had been permitted to pledge to it 50 shares of its stock as collateral security for a loan, that Thayer paid the loan and became the owner of the stock, and thereafter all of it was cashed in at his instance and through his manipulation as cashier; the two (Thayer & Sponable) dividing the money share and share alike. Sponable was a nonresident of the state, was a stockholder in the bank and director, but not an officer. Such steps were taken and proceedings had in that case that judgment went against Thayer on the report of Judge Ball, referee; the judgment including the Cowling stock item. On appeal here that judgment was affirmed. 184 Mo. 61, 82 S. W. 142. Sponable died in 1899. Thayer died June 1, 1903. Sponable's estate is in process of administration in another state. Mrs. Thayer, appellant, is the administratrix of Thayer's estate. As such administratrix she paid the judgment to the Central Bank. Eventually the creditors of the bank were satisfied in full, and Thayer's administratrix on June 17, 1905, filed in the receivership case an intervening petition, therein alleging that the capital stock of the bank was $100,000, divided into shares of $100 each; that the estate of Thayer owned 165 shares; that the estate of Sponable owned and owns $35,000 worth par value of the capital stock (i. e., 350 shares). The Cowling stock transaction is alleged in detail, the suit to recover on account of that transaction is alleged, and the substance of the petition is given, together with the result of the suit, viz., the recovery of $5,100, with 6 per cent. thereon from January 31, 1890 (with other amounts not material here), and the payment in full of that judgment by Thayer's administratrix. The receivership had reached the stage of final distribution among stockholders; the rights of creditors being out of the way. It is next charged that, while Geo. E. Thayer was properly held responsible and mulcted for the whole amount wrongfully abstracted from the bank in the Cowling matter, yet the recovery against him included the share wrongfully received by Sponable; that, as to that item, Sponable participated in the unlawful manipulation and conversion of the funds so recovered back; that it would work a great wrong to now permit the estate of Sponable as holder of 35 per cent. of the capital stock of the bank to receive 35 per cent. of the proceeds of the judgment paid in by Thayer's administratrix; that the estate of Sponable is not entitled in law or equity to receive a pro rata share of the judgment and should be excluded from any distributive share in final distribution among stockholders, concluding as follows: "Wherefore your petitioner prays the court to state an account between said corporation and A. R. Strother, receiver of said bank, and each of its stockholders, as to the amounts which will be due each of them, respectively, on a division of the assets of said corporation, and in this accounting deduct a 35/100 part of said fund of $5,100 and interest thereon since January 30, 1890, on account of the holdings of said Sponable estate for the reasons aforesaid, and also deducting the pro rata share due on the 165 shares of the capital stock now held by said George E. Thayer's estate, and that this court frame a decree, whereby the money heretofore paid to the corporation and A. R. Strother, receiver, on said judgment shall be prorated among the shareholders, as follows—that is: 48.5/100 part thereof divided among the stockholders who did not assent to said transaction in said $5,100 and interest due thereon since January 30, 1890, in accordance with their respective interests, and that said J. W. Sponable's estate be entirely excluded from participation in any manner whatever in said $5,100 and interest due thereon, and that your petitioner be decreed to be entitled to 51.5/100 part of said fund, being the balance thereof; that is, the pro rata part that would otherwise have gone to said Sponable in his estate, but for the reason hereinbefore mentioned, and also including the pro rata part on account of the Thayer stock now held by his said estate, and your petitioner prays the court for a decree that said plaintiff bank and its receiver state an account of amount of...