Borbein, Young & Co. v. Cirese

• Decision Date: 07 February 1966
• Docket Number: No. 24289,24289
• Citation: 401 S.W.2d 940
• Parties: BORBEIN, YOUNG & COMPANY, Plaintiff-Respondent, v. Joseph C. CIRESE and Mary T. Cirese, Defendants-Appellants, and W. N. Hemstock and Dominic F. Tutera, Administrator of the Estate of Michael J. Cirese, Defendants-Not Appealing.
• Court: Missouri Court of Appeals

Page 940

401 S.W.2d 940

BORBEIN, YOUNG & COMPANY, Plaintiff-Respondent, v. Joseph C. CIRESE and Mary T. Cirese, Defendants-Appellants, and W. N. Hemstock and Dominic F. Tutera, Administrator of the

Estate of Michael J. Cirese, Defendants-Not Appealing.

No. 24289.

Kansas City Court of Appeals, Missouri.

Feb. 7, 1966.

Motion for Rehearing and/or Transfer to Supreme Court Denied

April 4, 1966.

J. K. Owens, Kansas City, for appellants.

George H. Charno, Jr., Tucker, Charno, Willens & Jouras, Kansas City, for respondent.

CROSS, Presiding Judge.

This is a suit to recover an unpaid balance of purchase price due for merchandise sold on the open account of Universal Trailer and Manufacturing Corporation, hereinafter referred to as Universal. That entity was incorporated in Missouri in 1948, with charter authority to manufacture and deal in trailers, but on January 1, 1954, its charter was forfeited and the corporation was dissolved by the Secretary of State. Notwithstanding, the various officers and directors of Universal continued thereafter to conduct business in Universal's name and to manufacture trailers until the year 1960 the same as it had done prior to forfeiture of its charter. In the years 1959 and 1960 plaintiff Borbein, Young & Company sold and delivered parts and materials to the account of Universal on which there is an unpaid balance in the sum of $10,913.94. Thereafter in the year 1960 Universal was adjudicated a bankrupt.

As plaintiff, Borbein has sued and undertakes to recover from the four named individual defendants on theory that defendants Joseph C. Cirese, Mary T. Cirese and W. N. Hemstock, together with Michael J. Cirese, deceased, whose administrator is also a defendant, were Universal's officers and directors at the time its charter was forfeited on January 1, 1954; that immediately upon such forfeiture and by reason of their stated capacities, the four persons above named became trustees of the dissolved corporation charged with the legal duty to wind up its business and affairs as provided by law; that they failed to liquidate the corporation but instead continued to operate Universal's business; and, that in consequence, defendants Joseph C. Cirese, Mary T. Cirese and W. N. Hemstock, and Michael Joseph Cirese, deceased, became personally liable, jointly and severally, for the obligations incurred by them in the course of their activities and operations in conducting the business of Universal after its dissolution in excess of their authority as such trustees.

Trial to a jury resulted in a verdict and judgment against all four defendants awarding Borbein the principal sum of $10,913.94 and interest in the amount of $2946.78, a total of $13,860.72. However, this appeal is prosecuted solely by defendants Joseph C. Cirese and Mary T. Cirese, who are husband and wife. They will be generally referred to hereinafter as appellants.

Borbein has moved for dismissal of the appeal on complaints principally that appellants have violated Civil Rule 83.05(a), (b), V.A.M.R. in that their brief contains no jurisdictional statement; fails to contain a fair and concise statement of facts, and is incomplete, inaccurate and argumentative; fails to provide any page references to the transcript in the statement of facts and omits such page references from the entire remaining portion of the brief except for reference to the quotation of one instruction; and, fails to set forth the text of two instructions claimed to have been erroneously refused. Although appellants' brief is deficient in the respects charged, in the exercise of our discretion we decline to dismiss the appeal and proceed to examine appellants' assignments of error.

Appellants' first point is a complaint that the court erred in giving Borbein's verdict directing instruction (No. 2) because 'it directs the jury to find against all the defendants, and does not give the jury the right to find for some of the defendants and not for all defendants'.

This allegation of error has not been properly preserved for appellate review. It is shown by the record that the only objection to the instruction made at the trial before submission to the jury was that defendants 'object and except' to the action of the court in giving it. Civil Rule 79.03 requires that if specific objections to instructions are not made at the trial before submission to the jury, then specific allegations of error must be set forth in the motion for new trial to preserve the error for review. The sole allegation in appellants' separate motions for new trial with respect to the instruction or the court's action thereon is that 'The court erred in giving Instruction No. 2 offered by plaintiff'. Obviously appellants have not satisfied the requirements of the cited rule. Notwithstanding, we elect to consider the merits of their complaint.

In substance the instruction required the jury to return a verdict against 'the defendants and for the plaintiff' if they found (1) that Universal's charter was forfeited on January 1, 1954; (2) that Michael Joseph Cirese (now deceased), Joseph C. Cirese, Mary T. Cirese and W. N. Hemstock were then the officers or directors of Universal; (3) that those named persons continued thereafter to operate Universal's business and affairs; (4) that at their instance and request Borbein sold to Universal's account the goods and merchandise in question; (5) that the amount charged was the reasonable value thereof, and (6) remains unpaid; (7) and, that demand for payment was made.

The foregoing submission was made in reliance upon provisions of V.A.M.S., Section 351.525 as interpreted by the Supreme Court en banc in Leibson et al. v. Henry et al., 356 Mo. 953, 204 S.W.2d 310, in affirming a judgment holding stockholding directors personally liable. Pertinent portions of the opinion are as follows: 'Upon forfeiture, the plaintiffs (directors) under § 5094 (present Section 351.525) became trustees with the full power to liquidate Shelco's affairs to the end of protecting the interests of the stockholders and the creditors. Plaintiffs, as trustees, were without power to transact any business of Shelco, except to wind up its affairs and distribute its assets. * * * Acting beyond their powers as trustees, plaintiffs continued the transaction of business in like manner as had Shelco prior to the forfeiture * * *. It seems to us a court should recognize plaintiffs' personal liability for obligations so incurred by them in such unlawful transaction of business in the corporate name, transgressing their powers as trustees. If a court should otherwise rule, such a ruling would be in violation of the plain purpose of the law, open the door to fraud, and sanction the former directors' operation of the business, without liability, affording opportunity for wasting or diverting the corporate assets, thus subjecting stockholders, creditors and the State to a remediless loss of their rights to avail themselves of the corporate property'.

Instruction No. 2 correctly applies the law as written in the statutes of Missouri and declared by our courts, and each hypothesis of fact presented by it is amply supported by substantial evidence. Although not clearly expressed, it appears to be appellants' contention that the instruction should have told the jury in express terms that it could return a verdict in favor of one or more of the defendants. There is no merit in this submission. In the first place, the instruction does not direct a verdict against any defendant in the absence of an affirmative finding as to each of the essential elements hypothesized therein, although it directs a verdict against all four if those findings are made. If appellants interpret the instruction otherwise, they have misconstrued its plain language.

Furthermore, the instruction must be read and understood in relation with all the other instructions given. The form of verdict instruction advises the jury precisely how to return a verdict against all defendants, or against some defendants only, or in favor of all def...