Breneman v. The Laundry, 32867.

• Decision Date: 05 November 1935
• Docket Number: No. 32867.,32867.
• Citation: 87 S.W.2d 429
• Parties: BRENEMAN v. THE LAUNDRY et al.
• Court: Missouri Supreme Court

87 S.W.2d 429

BRENEMAN v. THE LAUNDRY et al.

No. 32867.

Supreme Court of Missouri, Division No. 2.

November 5, 1935.

Appeal from St. Louis Circuit Court; Albert D. Nortoni, Judge.

Suit by Edward R. Breneman against The Laundry and others, which was revived in the name of Bessie Breneman, executrix of the estate of Edward R. Breneman, deceased, after his death. Decree for plaintiff, and defendants appeal.

Affirmed.

Bryan, Williams, Cave & McPheeters, of St. Louis, for appellants.

Kratky, Soffer, Nessenfeld & Cox, of St. Louis, for respondent.

WESTHUES, Commissioner.

Edward R. Breneman brought this suit in equity in the circuit court of the city of St. Louis, Mo., against "The Laundry," a corporation, and Charles F. Eime, Oscar W. Eime, Edwin A. Eime, and O. F. Ash, Jr. Subsequent to the trial of the case, Breneman died and the case was revived in the name of respondent, widow of deceased, as executrix of his estate. Edward R. Breneman, deceased, will be referred to in the course of the opinion as plaintiff. The principal object of the suit was to compel the appellants, defendants below, to retransfer 121 shares of stock in the defendant corporation to plaintiff. The trial court entered a decree for plaintiff. The defendants duly appealed. The stock involved was alleged to be worth in excess of $7,500, and hence appellate jurisdiction in this court.

The evidence disclosed that plaintiff, a man named Schwartz, and defendant Charles F. Eime became associated in the laundry business in the year 1914. Two years later plaintiff and Eime purchased the interest of Schwartz. Thereafter the present corporation was formed with a capital of $25,000, divided into 250 shares of stock. Plaintiff owned 121 shares, Charles F. Eime 121, and his sons, defendants Oscar W. and Edwin A., 4 shares each.

Plaintiff, who was an experienced laundryman but had no capital, managed the business, while Charles F. Eime, who knew little if anything about a laundry, furnished the capital and did not take an active part in managing the business. The corporation was prosperous, and plaintiff and time received substantial amounts in dividends and salaries. Eime also received commissions and interest for capital loaned to the corporation. Harmony prevailed and business continued to be good, amounting to about $3,000 gross income per week, until July 9, 1930, when a fire destroyed the plant. After this fire a new location was purchased at Kingshighway and Manchester avenue, St. Louis, Mo. A building located on the lot was remodled, and within about three months business was resumed. During this time the company retained all of its help on the pay roll at a cost of approximately $30,000. The company received $70,000 from insurance companies for losses caused by the fire. Some of the old machinery was salvaged, and new machinery costing around $40,000 was purchased to equip the laundry.

Walter E. Breneman, son of plaintiff, had been in the employ of the company for many years and was in charge of the books both prior to and after the fire. In December, 1930, defendant O. F. Ash, Jr., entered the scene. A brother of Charles F. Eime had advised that the books of the company ought to be audited and suggested the name of Ash, an acquaintance, as a proper accountant to make the audit. The matters, which were alleged in the petition as the essence of plaintiff's cause of action, occurred between the first part of December, when Ash was present at a meeting of plaintiff, his son, and the defendants Eimes, and January 5, 1931, when plaintiff transferred 90¾ shares of stock to Eime.

Plaintiff charged in his petition, in substance, that Ash and the other defendants entered into a conspiracy to divest him (plaintiff) of his stock; that he was told the company was in immediate need of $20,000 cash to pay creditors, and that Eime would advance that amount on condition that he (plaintiff) would assign his stock to Eime with the privilege of redeeming the same within five years by paying $10,000, or one-half of the sum to be advanced by Eime; that he (plaintiff) did not agree to this arrangement; that defendants thereupon informed him that his son had been guilty of defalcations and unless he transferred his stock to Eime his son would be sent to the penitentiary, whereupon he transferred 90¾ shares of stock to Eime. Plaintiff also charged that the alleged transfer was without consideration and procured by fraud.

The evidence disclosed that plaintiff's son, due to illness, left the employ of the company shortly after Ash began an audit of the books. Plaintiff's son was in the hospital with a nervous breakdown from that time until after plaintiff had assigned his stock to Eime. Plaintiff's son, who was acquainted with the books of the company and its financial condition, was therefore unable to assist plaintiff during the negotiations that followed the son's departure.

Plaintiff's evidence to support the charge that the assignment was obtained by duress was substantially as follows: Ash and Eime informed plaintiff on January 3, 1931, that the company was in financial difficulties and unless $20,000 new capital was immediately obtained to pay creditors the company would have to declare bankruptcy; that the stock of the company was worthless; that Eime was unwilling to advance the whole sum unless plaintiff would assign his stock to Eime to be redeemed within five years, on the payment of $10,000. Plaintiff testified that he did not agree to this plan. Defendants denied having made such an offer. Plaintiff testified that when he declined to assign his stock, as suggested, he was informed that his son had extracted about $1,700 from the company by issuing unauthorized checks and that unless the stock was assigned to Eime "the checks would be turned over to the bank and let the bank take its course." Plaintiff also testified that Ash and Eime informed him that in view of the fact that he had never invested any capital and would loose nothing in the event of bankruptcy, and in view of the action of his son, he ought to transfer his stock to enable Eime to save his investment. On Sunday, January 4, another meeting was had at the home of Eime. Plaintiff testified that while discussing the affairs of the company along the same line as at the meeting of the day before, the wife of Eime said: "You are all right; but that Walter" (meaning plaintiff's son), "he ought to be in the penitentiary." Plaintiff testified that he still refused to assign his stock; that on Monday, January 5, another meeting was had at the laundry plant at which time Ash and Eime repeated what had been said at the previous meetings with reference to the financial conditions of the company and the actions of his (plaintiff's) son, and after some discussion of the matter he placed his signature to an assignment which defendants had prepared.

We are of the opinion that the evidence was insufficient to sustain a finding that plaintiff assigned his stock under duress by a threatened prosecution of his son. No direct threats of prosecution were made. "Duress" is defined in 13 C. J., § 310, p. 396, as "that degree of constraint or danger, either actually inflicted or threatened and impending, which is sufficient in severity or in apprehension to overcome the mind of a person of ordinary firmness." Plaintiff's own evidence showed that he did not sign the instrument under the fear that unless he did so his son would be prosecuted for a criminal offense. On cross-examination he testified that what had been said about his son did not induce him to execute the assignment. The evidence, therefore, did not establish duress. Mississippi Valley Trust Co. v. Begley, 298 Mo. 684, 252 S. W. 76, loc. cit. 78 (1), and cases there cited.

In support of the...