Berry v. Rood
| Decision Date | 26 February 1908 |
| Citation | 108 S.W. 22,209 Mo. 662 |
| Parties | A. MOORE BERRY, Receiver, v. HORACE E. ROOD et al., Appellants |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. O'Neill Ryan Judge.
Reversed and remanded.
Dawson & Garvin for appellants.
(1) When this case was here on the former appeal it was reversed and remanded for a new trial, and not with directions to enter any particular judgment. State ex rel. v. St. Louis Circuit Court, 41 Mo. 574; State v. Newkirk, 49 Mo. 474; Updike v. Park, 11 Ill.App. 357; City v. Bogardus, 188 Ill. 74; Dunsmore v. Rouse, 211 Ill. 317; Hawkins v. Railroad, 99 F. 322. (2) And the action of the circuit court in sustaining plaintiff's motion for judgment and entering a decree thereon against defendants was erroneous. Patterson v Patterson, 200 Mo. 335; State ex rel. v Jarrott, 183 Mo. 204; Smith v. Paris, 70 Mo. 621; Lins v. Lenhart, 127 Mo. 280; Dalrymple v. Craig, 149 Mo. 357; Courtney v. Blackwell, 150 Mo. 267; Hoeller v. Haffner, 155 Mo. 597; State ex rel. v. St. Louis Circuit Court, 41 Mo. 574. (3) Defendants in this case are not liable for allowances for the compensation of receiver and his counsel. Such allowances being costs of administration of the estate of the Ozark Onyx Company must be made, if they are ever made, in the case of McMaster, assignee of the Providence Jewelry Company v. Ozark Onyx Company, wherein the receiver was appointed, and be paid out of such assets as he may have in his hands, or they may be taxed as costs in that case. The effect of the decree was to require defendants to pay plaintiff's attorney's fees in this case, which is contrary to the law of Missouri. Scovell v. Thyer, 105 U.S. 143; Hill v. Atoka Mining Co., 124 Mo. 166; Richmond v. Irons, 121 U.S. 66; St. Louis v. Meintz, 107 Mo. 615; Albers v. Merchants Exchange, 138 Mo. 160.
Lee W. Grant, P. R. Flitcraft and W. B. Homer for respondent.
(1) Bank v. Taylor, 62 Mo. 338; Bridge Co. v. Stone, 194 Mo. 184; Hunt v. Railroad, 184 U.S. 91; Chouteau v. Allen, 74 Mo. 56; Shroyer v. Nickell, 67 Mo. 589; Hurck v. Erskine, 50 Mo. 116; Stump v. Hornback, 109 Mo. 277; Treadway v. Johnson, 39 Mo.App. 136. (2) When a cause is reversed and remanded with directions, the trial court must proceed to enter the judgment indicated by the appellate court; nor is it necessary for the appellate court to give explicit directions regarding the judgment, but the trial court must examine the mandate and the opinion and the issues made by the pleadings, which have been adjudicated. Lackland v. Smith, 5 Mo.App. 153, 579, 75 Mo. 307; State ex rel. v. Edwards, 144 Mo. 467; Fanning v. Doan, 146 Mo. 98; Gamble v. Gibson, 10 Mo.App. 327; Supervisor v. Kennicott, 94 U.S. 498; Riley v. Sherwood, 155 Mo. 37; State ex rel. v. Given, 75 Mo. 516; Pickle Stone Co. v. Wall, 108 Mo.App. 495; Barkhoefer v. Barkhoefer, 93 Mo.App. 373. (3) A receiver, who is an officer of the court, is entitled to such allowances as the court may make out of the assets of the estate and unpaid subscriptions of the insolvent corporation are assets. Greeley v. Bank, 103 Mo. 212; Banking Co. v. Mfg. Co., 168 Mo. 646. A receiver appointed by the Comptroller of the Currency, under the National Banking Act, is entitled to recover from the stockholders, on account of their subscriptions to the capital stock of the corporation, not only enough to pay the debts of the bank, but also all costs and expenses necessarily incurred by him in the performance of his duties. Richmond v. Irons, 121 U.S. 65. A receiver appointed by a court of equity, under its ordinary powers, has the same powers and rights to proceed against stockholders as a receiver appointed by the Comptroller of the Currency. King v. Pomeroy, 121 F. 287. An assignee in bankruptcy or insolvency has the right to recover against the stockholders on account of unpaid stock, the amount sufficient to pay not only the debts of the concern, but also attorney's fees, in making collection of the assessment. Sanger v. Upton, Assignee, 91 U.S. 62; Webster v. Upton, Assignee, 91 U.S. 65; Johnson, Trustee v. Allis, 71 Conn. 219.
In a suit then pending in the St. Louis Circuit Court in which F. J. McMaster, assignee, etc., was plaintiff, and the Ozark Onyx Company, a corporation, was defendant, A. Moore Berry, the plaintiff in this suit, was appointed receiver to collect the assets and wind up the affairs of the corporation which was in that suit adjudged to be insolvent. Among orders made in that suit was one directing the receiver to ascertain who were creditors and how much was owing each and to bring suit against the stockholders of the corporation to collect the balances, if any, due on their stock subscriptions to the extent of a sufficient amount to pay the debts and expenses of the proceeding. In obedience to that order the receiver instituted this suit; the defendants in this suit were the officers and stockholders of the corporation.
This is the second appeal in this case. The proceedings in this court on the first appeal are reported in 168 Mo. 316, to which we now refer for a more complete statement of the issues and facts than will be herein given. [Berry v. Rood, 168 Mo. 316, 67 S.W. 644.]
Reference to that report will show that when this cause came on for trial in the circuit court it was sent to a referee to try all the issues. A lengthy trial was had before the referee, who at its conclusion made a report to the court in writing and with the report filed in court a record of all the evidence taken at the trial.
By the referee's report it appeared that the defendants, as incorporators and subscribers to the stock, launched the corporation on the business community with an ostensible full paid capital stock of $ 300,000, whereas in truth the stock was not paid for in money or money's worth, but only in property, the real value of which turned out to be inconsiderable. But the referee found that whilst that was so, yet when the defendants gave in the property they had such confidence in its prospective value that they really believed it was worth the face value of the stock and because they acted in good faith the referee held that they were not liable.
When the report came in plaintiff filed exceptions to it, both as to the findings of fact (chiefly to the findings that the incorporators acted in good faith), and also to the conclusions of law on the facts found. Defendants filed no exceptions to the report. Pending the exceptions filed by the plaintiff, the court re-referred the case to the same referee with instructions to ascertain and report if the defendants as officers of the corporation acted with ordinary business judgment and discretion in fixing the value of the property taken in payment of the stock. The referee accordingly reopened the case to try that question, and after a hearing reported to the court that defendants Rood and Leighton did not exercise reasonable care and ordinary business judgment and discretion in the matter, but that the other defendants did. To that supplemental report the plaintiff filed exceptions and the defendants Rood and Leighton filed exceptions. On final hearing the court overruled all the exceptions and rendered judgment for the defendants on the theory that although the property given in was of comparatively little value, yet they believed it to be of great value and thus acted in good faith. When the cause was here on the former appeal the main controversy was over the correctness of that theory. We reversed the judgment and held that the defendants were liable for the difference between the real value of the property given in and the face value of the stock, notwithstanding they may have believed that the property was of the value of the face of the stock. There is no necessity for repeating now what we said then on that point; we are satisfied with the views there expressed. There were some other points discussed in the opinion in the former appeal, but the main point was the one above mentioned. The opinion concluded with this sentence: "The judgment is reversed and the cause remanded to the circuit court with directions to proceed to adjust the rights of the parties in accordance with the law as herein expressed." In the judgment rendered in this court, after words reversing the judgment of the circuit court, was this clause: "It is further considered and adjudged by the court that the said cause be remanded to the circuit court of the city of St. Louis for further proceedings to be had therein in conformity with the opinion of the court herein delivered."
The plaintiff interpreted that opinion and judgment to mean a direction to the circuit court to enter judgment in his favor against the defendants respectively in proportion to their stock holdings in sums sufficient to pay the debts of the corporation as set out in the opinion and expenses of the receivership, including his own compensation and compensation for his attorneys, and he filed a motion in court asking such judgment.
The defendants on the contrary interpreted the opinion and judgment of this court to mean that the judgment of the circuit court was reversed and the cause remanded to be tried...
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