Black & White Cabs of St. Louis, Inc. v. Smith
| Citation | 370 S.W.2d 669 |
| Decision Date | 20 September 1963 |
| Docket Number | No. 31132,31132 |
| Parties | BLACK AND WHITE CABS OF ST. LOUIS, INC., a Corporation, (Plaintiff) Respondent, v. Thomas Donald SMITH, Administrator of Estate of George W. Smith, Deceased, (Defendant) Appellant. |
| Court | Court of Appeal of Missouri (US) |
Mehan & Sanders, Richard J. Mehan, St. Louis, for appellant.
Max Sigoloff, St. Louis, for respondent.
This is an action in equity brought by plaintiff, a Missouri corporation, for specific performance of an agreement entered into by and between George W. Smith during his lifetime and all other shareholders of plaintiff corporation. The defendant, son of decedent, is the administrator of the Estate of George W. Smith, Deceased. The court entered its judgment and decree in favor of the plaintiff and ordered the defendant to specifically perform the agreement entered into by the defendant, George W. Smith, and to deliver to the plaintiff corporation, properly and duly endorsed, as administrator of the Estate of George W. Smith, Deceased, twenty shares of capital stock of the plaintiff corporation upon payment to him by plaintiff of the sum of $8000.00. The court further ordered that the defendant be restrained from disposing of said stock or making application to the Probate Court for distribution of said stock as administrator of his father's estate. From this judgment and decree, defendant appeals.
The defendant presents two points for our consideration. He contends (1) that the court erred in overruling his Motion to Dismiss filed prior to the commencement of the trial because plaintiff was not a party to the agreement on which the equity action is founded and is only an incidental beneficiary under said agreement and, therefore, is not entitled to enforce it; (2) that the trial court erred in denying defendant's motion to inspect the books and records of the plaintiff corporation.
It is alleged in the petition and the evidence in support thereof shows that the decedent, George W. Smith, for a number of years prior to his death, was one of the six principal shareholders of the plaintiff corporation. Each of the shareholders of said corporation owned an equal number of shares of the capital stock of said plaintiff corporation. The six shareholders owned all of the capital stock issued by the plaintiff corporation and outstanding at the time of the execution of the agreement hereinafter referred to and at the time of the death of George W. Smith. The six shareholders comprised the Board of Directors of said corporation.
At the time of the execution of the agreement and at the time of his death, George W. Smith was the owner of 20 shares of $100 par value per share of the capital stock of plaintiff corporation which ownership was represented by a stock certificate issued by the corporation under date of June 2nd, 1955, with an endorsement thereon stating that 'the sale or transfer of this stock is subject to the terms and conditions of a contract between Myron C. Redman, Oscar G. Heintzmann, John J. Smith, Frank Foley, George W. Smith and Harry Lander dated 24 day of July, 1957.'
On the 28th day of February, 1958, Myron C. Redman, Oscar G. Heintzmann, John J. Smith, Frank Foley, George W. Smith, and Harry Lander, comprising all of the shareholders of plaintiff corporation, entered into an agreement, the pertinent parts of which we set out.
'(3) In the event any of the shareholders hereof should desire to dispose of any of his shares of stock in any or all of the companies aforesaid during his lifetime, then he shall first offer to sell all of his shares of stock to each of the aforesaid corporations at the price herein set forth: * * * Black and White Cabs of St. Louis, Inc., $300.00 per share.
* * *'
The agreement then provides that if the company would fail to buy the shares of stock so offered, then the shareholder shall have the right to offer to sell his stock to the other shareholders in proportion to their respective holdings and if the corporation and the shareholders to whom said stock is offered shall decline to buy such stock in proportion to their holdings in said company, then the shareholder desiring to sell shall have the right to sell his stock to any one or more of the other shareholders of said corporation and if none of the shareholders agree to buy all of the stock, then said shareholder shall have the right to sell his stock to any other person not a shareholder of said corporation.
Thereafter the agreement provided:
'(8) None of the parties shall during his lifetime assign, encumber or dispose of any portion of his respective stock interest in the aforesaid companies by sale or otherwise without the written consent of the other shareholders of the corporation in which they hold such stock.
'(9) In the event of the death of any of the shareholders, then and in that event, the Executor, Administrator or personal representative of the deceased shall offer the stock of the deceased to the respective corporations above mentioned under the same terms and conditions hereinbefore provided, and if any of said companies shall fail or refuse to buy the same within the time mentioned aforesaid, then such stock shall be offered to the survivors of said parties under the same terms and conditions as hereinbefore agreed by all of the respective parties with each other, on the same terms as hereinbefore provided, in the event any of them desire to sell his stock during his lifetime.
'(10) Payment for said stock shall be made in cash by the party purchasing the same.
'(11) Each certificate of stock owned by the parties shall bear a notation of the existence of this contract between said parties, so that all who are not parties to this contract shall have notice thereof.
* * *
* * *
'(14) The parties hereto for themselves, their successors, assigns and administrators, hereby agree to the full performance of the covenants and agreements herein contained which shall be binding upon them individually and their personal representatives.'
This agreement covered the stock in three other corporations which stock was held by the same shareholders holding the stock of plaintiff corporation. Thus the reference in the agreement to 'corporations.' In January of 1960 the six shareholders pursuant to the terms of the aforesaid agreement agreed that the value of and the amount to be paid for the stock of plaintiff corporation in the event of any of the happenings mentioned in said agreement during the year 1960 shall be $400 per share.
George W. Smith died on the 5th day of September, 1960, and his son, the defendant herein, was appointed administrator of his estate. After the defendant took charge of the estate of his father, he did not offer the stock of the Black and White Cabs of St. Louis, Inc., inventoried in said estate, for sale to the plaintiff corporation pursuant to the terms of the aforesaid contract. On November 30, 1960, the plaintiff, in a letter addressed to the defendant, administrator, called the defendant's attention to the terms of the agreement as set out herein and then stated:
This offer to purchase the shares of stock held in the Estate of George W. Smith, deceased, was made pursuant to a resolution adopted at a special meeting of the Board of Directors of plaintiff corporation held at the office of the corporation on the 19th day of October, 1960. Defendant refused to accept the offer and continued to refuse to sell the stock, giving as his reason that he did not think the price offered represented a fair value. Also stating that he was unwilling to file an application for an order of the Probate Court to sell said stock.
Myron C. Redman, president of plaintiff corporation, testified that the plaintiff was willing and ready to pay the administrator $8000 for the 20 shares of stock.
The decedent, when living, was present at all meetings of the shareholders and directors and was present at the meeting held in January 1960, when the value of $400 per share was placed on the stock. No evidence was offered by the defendant.
Defendant filed his answer to plaintiff's petition on May 18, 1961, and in it he alleged that he was without...
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