Commonwealth Finance Corp. v. Missouri Motor Bus Co.

• Decision Date: 03 April 1923
• Docket Number: No. 17958.,17958.
• Citation: 251 S.W. 756
• Parties: COMMONWEALTH FINANCE CORPORATION v. MISSOURI MOTOR BUS CO. et al.
• Court: Missouri Court of Appeals

251 S.W. 756

COMMONWEALTH FINANCE CORPORATION v. MISSOURI MOTOR BUS CO. et al.

No. 17958.

St. Louis Court of Appeals, Missouri.

April 3, 1923.

Rehearing Denied May 25, 1923.

Appeal from St. Louis Circuit Court; Charles B. Davis, Judge.

Receivership proceeding by the Commonwealth Finance Corporation against the Missouri Motor Bus Company and another. From an order refusing to allow him attorney's fees, D. H. Wayman appeals. Affirmed. McLaran & Garesche and F. H. Wayman, all of St. Louis, for appellant.

Nagel & Kirby and E. P. Griffin, all of St. Louis, for respondent Commonwealth Finance Corporation.

J. L. Hornsby, of St. Louis, for respondent Tower Grove Bank.

BIGGS, C.

E. H. Wayman, as attorney for defendant Missouri Motor Bus Company, appeals from an order of the circuit court refusing to allow him an attorney's fee for his services to said bus company in a receivership proceeding filed against it. The order appealed from is as follows:

"The court, having duly considered the petition E. H. Wayman for an allowance for alleged services performed, heretofore filed and submitted herein, doth order that the prayer of said petition be and is hereby denied."

As appears from the record, on January 8, 1920, the plaintiff, Commonwealth Finance Corporation, filed a petition in the circuit court of the city of St. Louis against the Missouri Motor Bus Company and the Tower Grove Bank. By its petition it is alleged that one Oliver Frazier who was the agent of plaintiff, had without authority loaned and otherwise advanced to the Missouri Motor Bus Company moneys belonging to the plaintiff in excess of $100,000 for the purpose of financing said motor bus company, and for the further purpose of enabling it to purchase motor busses for use on the streets of the city of St. Louis; that said Frazier had no authority to use said funds; that Frazier was an officer and director of the Missouri Motor Bus Company, and that company knew, therefore, that the money advanced it by Frazier was the money of plaintiff, and that Frazier had no authority to so advance

The petition further avers that, by reason of said advancements by Frazier without the knowledge or authority of the plaintiff, but with the knowledge of the bus company, the plaintiff was entitled to have a trust declared in its favor as to all property in the custody of the said bus company.

After making allegations as to the insolvency of the bus company, plaintiff seeks a decree from the court declaring a trust in its favor as to all the property of the bus company, and that a receiver for that company be appointed, and that said company, its officers and agents, be enjoined from in any manner disposing of any of its property or interfering with the conduct and management thereof by the receiver.

As to the defendant the Tower Grove ank, plaintiff alleged that the defendant bus company had executed a chattel mortgage in favor of said bank on a portion of its motor busses to secure a note given by the bus company to the bank in the sum of $30,000; that this mortgage was fraudulent and void because of knowledge on the part of the said bank to the effect that the said busses on which it took a mortgage were purchased with plaintiff's funds advanced to the said company by said Frazier without authority. The petition asks that the mortgage to the bank be declared void, and that its officers be enjoined from in any manner availing itself of said mortgage or of attempting to enforce the same.

Upon an order to show cause why a receiver should not be appointed for the said bus company, and why injunctions should not be granted as prayed in the petition, the defendant bus company filed a return, by which the said defendant admits that from time to time said Oliver Frazier, acting as the agent of plaintiff, advanced to it various sums of money for the purpose of purchasing busses, but alleges that for all of said money so secured it executed its promissory notes secured by chattel mortgages on the said busses. It is alleged in the return that the said Frazier was authorized by plaintiff to advance said money for the benefit of said defendant, and that said agent had authority from plaintiff to so invest the funds of plaintiff, but, if in truth and fact said Frazier had not such authority, then the defendant denies that it had any knowledge thereof. While admitting said Oliver Frazier was one of the directors of the defendant bus company, the return denies the said Frazier was one of the active promoters and organizers of the defendant company.

The return further denies that plaintiff ever demanded an accounting of the transactions between it and said Oliver Frazier, and denies that it ever refused to give plaintiff any information whatever concerning the transactions between it and said Frazier. It is then admitted by said return that on April 20, 1920, the bus company executed a chattel mortgage to the defendant Tower Grove Bank to secure said bank for an indebtedness of $30,000, but denies the said chattel mortgage is invalid in manner and form as in plaintiff's petition alleged.

By the return a denial is made as to the insolvency of the defendant bus company. And it is further set up that the plaintiff company is a nonresident corporation, doing business in Missouri without having complied with the laws of said state relating to foreign corporations, and that therefore said plaintiff has no right to maintain this suit, and that its promissory notes given to said plaintiff by the defendant company are for this reason void and of no effect. It is further alleged in said return that the said notes given to plaintiff are usurious in character, and are therefore illegal and invalid, and that the plaintiff is not entitled to any lien upon the property of this defendant by virtue of said chattel mortgages or otherwise.

The abstract of the record before us does not set forth the return of the Tower Grove Bank, nor is the evidence upon which the court acted in the matter of appointing a receiver brought here by the appellant.

It appears from the record that on July 1, 1920, after a hearing, a receiver was appointed for the bus company, and that temporary injunctions were granted against the said bus company and the Tower Grove Bank as in the petition prayed. The record then states:

"That thereafter various and necessary steps and proceedings were had in said litigation which are not necessary to be here abstracted because some of them are not necessary to a proper determination of the question involved in this appeal, and because those steps and proceedings which do bear upon this appeal are fully detailed in the evidence forming the bill of exceptions hereinafter set forth."

It appeared from the evidence that the order to show cause was submitted in the form of depositions take on behalf of plaintiff and counter affidavits with exhibits attached thereto filed on behalf of the defendant. These depositions, affidavits, and exhibits are not contained in the record.

It appears from appellant's testimony that, after the order was made appointing the receiver and granting the injunction, an appeal was thereupon taken by the bus company to the Supreme Court, which affirmed the judgment of the lower court in appointing the receiver. Afterwards the receiver sought an order to sell the assets of the bus company, which was unsuccessfully resisted by the defendant bus company in the circuit court, and thereafter said bus company sought by writ of prohibition from the Supreme Court to prohibit the sale of the assets, which prohibition matter was determined adversely to the said bus company.

Afterwards, and on June 23, 1921, tie appellant, El. H. Wayman, filed in said cause his petition for an allowance of fees as attorney for the Missouri Bus Company, asking that same be paid out of the funds in the hands of the receiver. By his amended petition for allowance filed on September 22, 1921, after setting up a statement of the nature, character, and extent of the services performed, it is alleged by appellant that, under his employment as attorney, he will be required to defend said cause on its merits before the circuit court, and that the trial of said cause on its merits will entail a great deal of work, study, and preparation therefor, and will consume approximately five days in the actual trial thereof. After stating that the petitioner has been paid by the said defendant the sum of $500 on account of his services, it is alleged that a reasonable allowance to the applicant at this time...