Boatmen's Bank v. Gillespie

Decision Date24 December 1907
Citation209 Mo. 217,108 S.W. 74
PartiesBOATMEN'S BANK v. GILLESPIE et al.
CourtMissouri Supreme Court

Appeal from Circuit Court, Jackson County; Shannon C. Douglass, Judge.

Action by the Boatmen's Bank against Thomas E. Gillespie and others. From a judgment for plaintiff, defendants appeal. Reversed.

Lathrop, Morrow, Fox & Moore, C. O. Tichenor, James P. Gilmore, and George J. Mersereau, for appellants. I. N. Watson, for respondent.

BURGESS, J.

This is an action on two promissory notes, each for $8,000, upon which plaintiff seeks to recover judgment against the defendants individually, as members of the A. J. Gillespie Commission Company, on the ground that said commission company which indorsed and sold said notes, never became a corporation. The petition is in two counts, the first count of which states: That on October 15, 1898, one G. G. Gillette and J. S. Hollinger, C. H. Patterson, E. C. Hollinger, Jos. Z. Reed, A. T. Hollinger, and O. L. Thisler made, executed, and delivered to the above-named defendants, under the name and style of the A. J. Gillespie Commission Company, their negotiable promissory note as follows: "$8,000.00. Boatmen's Bank. October 15, 1898. One hundred and twenty days after date, without grace, for value received, we jointly and severally promise to pay to the order of the A. J. Gillespie Commission Co. eight thousand and no/100 dollars, at the office of the A. J. Gillespie Commission Company, Live Stock Exchange, Kansas City, Kansas, with interest at the rate of 8 per cent. per annum from maturity. We, the makers, indorsers, grantors, assignors, and sureties, severally waive the benefits of the exemption laws of the states and territories of the United States, and also severally waive presentment for payment, demand, protest and notice of protest for nonpayment of this note, and all defense on the ground of any extension of the time for its payment that may be given by its holders to the maker or makers thereof, or to any indorser or surety. G. G. Gillette. P. O. Address, Woodbine, Kan. Due Feb. 12, 1899." Indorsed across the back as follows: "The A. J. Gillespie Com. Co., by J. S. Hollinger, Pt." That prior to October 19, 1898, the said A. J. Gillespie Commission Company, for value received, indorsed across the back of said note the following: "The A. J. Gillespie Commission Co., by J. S. Hollinger, Pt." — and delivered said note to the Hocker, Arnold & Woodson Brokerage Company, and that on October 19, 1898, said Hocker, Arnold & Woodson Brokerage Company, for value received, sold said note to plaintiff, who ever since said date has been the owner and holder thereof. That notice of protest was expressly waived by said defendants. That said note is now long past due, etc. Wherefore plaintiff prays judgment for said $8,000 and interest thereon at the rate of 8 per cent. per annum from maturity, and for costs. The second count of the petition alleges in substance that on or about October 1, 1898, the defendants, together with J. S. Hollinger, C. H. Patterson, E. E. Hollinger, and J. S. Hollinger as trustee for J. B. Case, Jos. Z. Reed, Otis L. Thisler, C. A. Stannard, and A. L. Hollinger, formed themselves into a voluntary association, and filed with the Secretary of State a paper purporting to be articles of incorporation, signed and acknowledged by said parties. The said articles, which are fully set out in the petition, show the location of the company as Kansas City, Mo., and its capital stock as $100,000, divided into 1,000 shares of the par value of $100, each, of which the defendants each subscribed for 100 shares. J. S. Hollinger signs as trustee for J. B. Case, Jos. Z. Reed, Otis L. Thisler, C. A. Stannard, and A. L. Hollinger. The place of the residence of the defendants as shareholders is given in the articles as Kansas City, Mo., and that of the others as the state of Kansas. Defendants are also named among the 11 directors of the company; the other directors being J. S. Hollinger, C. H. Patterson, E. C. Hollinger, A. L. Hollinger, J. B. Case, Jos. Z. Reed, Otis L. Thisler, and C. A. Stannard. The petition then avers that said Case and Stannard never authorized said J. S. Hollinger to sign their names to such agreement, and never ratified said signing; that the defendants were not bona fide subscribers to said paper, and were only nominal parties to said arrangement; that said association never had or maintained an office in or transacted business in this state, and never elected a board of directors as stated in said paper, and that said attempt to incorporate was for the fraudulent purpose to obtain a charter under the laws of Missouri and evade the laws of Kansas governing stockholders' liability in said state; that the defendants paid nothing for any stock in said company, and that the capital stock of said company never was paid, as represented to the Secretary of State. The "Secretary of State of Missouri, relying upon the written statements contained in said written agreement aforesaid, and believing that all the persons whose names were appended to said paper had actually entered into said agreement and signed the same, and believing that said parties were all bona fide subscribers to said articles of agreement, and had bona fide subscribed for the shares of stock set opposite their names, and had met and elected the board of directors named therein, and that the capital stock had been fully paid up as therein stated, and believing that said alleged corporation intended bona fide to engage in business in the state of Missouri and maintain its general office in Kansas City, Jackson county, Mo., and believing all said statements to be bona fide and true, issued a certificate of incorporation, in the name of the A. J. Gillespie Commission Company, under the laws of the state of Missouri, when in truth and in fact said statement that said parties had associated themselves together and entered into the said agreement was false and fraudulent, and said statement that said capital stock should be $100,000, and that the same had been bona fide subscribed and...

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