Denny v. Guyton

• Citation: 57 S.W.2d 415
• Decision Date: 31 December 1932
• Docket Number: No. 32373.,No. 32372.,32372.,32373.
• Parties: YOUNGER B. DENNY, Executor of the Estate of JOSIAH C. WOLCOTT, Appellant, v. MARGARET A. GUYTON, FANNIE G. CARKENER, J. FRANK GUYTON, Executors of the Will of J.D. GUYTON; COMMERCE TRUST COMPANY, a Corporation, Executor of the Will of H.M. BEERS; W.R. HARRINGTON, YOUNGER B. DENNY, Executor of the Will of JOSIAH C. WOLCOTT, v. MARGARET A. GUYTON, FANNIE G. CARKENER, J. FRANK GUYTON, Executors of the Will of J.D. GUYTON; COMMERCE TRUST COMPANY, a Corporation, Executor of the Will of H.M. BEERS; W.R. HARRINGTON, Appellants.
• Court: Missouri Supreme Court

57 S.W.2d 415

YOUNGER B. DENNY, Executor of the Estate of JOSIAH C. WOLCOTT, Appellant, v. MARGARET A. GUYTON, FANNIE G. CARKENER, J. FRANK GUYTON, Executors of the Will of J.D. GUYTON; COMMERCE TRUST COMPANY, a Corporation, Executor of the Will of H.M. BEERS; W.R. HARRINGTON, YOUNGER B. DENNY, Executor of the Will of JOSIAH C. WOLCOTT, v. MARGARET A. GUYTON, FANNIE G. CARKENER, J. FRANK GUYTON, Executors of the Will of J.D. GUYTON; COMMERCE TRUST COMPANY, a Corporation, Executor of the Will of H.M. BEERS; W.R. HARRINGTON, Appellants.

No. 32372.

No. 32373.

Supreme Court of Missouri, in Banc.

December 31, 1932.

Appeal from Jackson Circuit Court. — Hon. Thomas J. Seehorn, Judge.

MODIFIED AND AFFIRMED.

James A. Reed, J.M. Johnson, I.N. Watson, J.P. Aylward, Donald W. Johnson, Henri L. Warren and John B. Gage for appellant-respondent.

(1) Where a party acquires property from another by means of fraudulent representations and concealments, equity will charge him as a constructive trustee. Denny v. Guyton, 40 S.W. (2d) 590; Wootton Land & Fuel Co. v. Ownbey, 265 Fed. 100; Rutherford v. Williams, 42 Mo. 18; King v. Moon, 42 Mo. 551; 33 C.J. 851; Seehorn v. Hall, 130 Mo. 257; Knapp v. Hanley, 108 Mo. App. 353; Parish v. Casner, 282 S.W. 412; Pomeroy v. Benton, 57 Mo. 542; 1 Perry on Trusts, sec. 166; 3 Pomeroy's Equity Jurisprudence (4 Ed.) secs. 1052, 1058, 39 Cyc. 182; Hoge v. George, 200 Pac. 96; Lind v. Webber, 36 Nev. 623; May v. Hettrick Bros. Co., 167 N.Y. Supp. 966; Jackson v. King, 4 Cowen, 207; 3 Greenleaf on Evidence, sec. 254, p. 241; Cassidy v. Horner, 208 Pac. 775; Cull v. Cavanaugh, 218 Pac. 299; 33 C.J. pp. 857, 858, secs. 53, 54; Modlin v. Licht, 224 App. Div. 614, 231 N.Y. Supp. 265; Dexter and Carpenter v. Houston, 20 Fed. (2d) 647; Moe v. Lowrey, 194 Pac. 363; 2 Storey Eq. Jur., sec. 1265. (2) The burden of proof rests upon defendants as such constructive trustees to make a full, fair and complete disclosure of all profits made by the joint adventure. It devolves upon them to show by competent proof what they received and what they did with the profits, and any losses suffered must be shown by defendants by proof aliunde their own testimony. Where a fraudulent trustee commingles trust property with his own so that the same cannot accurately be segregated, he must lose his own rather than that any loss should be visited upon his cestui que trust. Wootton Land & Fuel Co. v. Ownbey, 265 Fed. 100; 33 C.J. 870, sec. 95; Pomeroy v. Benton, 57 Mo. 531; Pomeroy v. Benton, 77 Mo. 64; Pomeroy's Equity Jurisprudence (4 Ed.) p. 2471; Leary v. Kelley, 120 Atl. 817; Navarro v. Lamana, 179 S.W. 922; Hubbard v. Ferry, 141 Wis. 17, 123 N.W. 142; Runyon v. Eaches, 79 Pa. Sup. 272; McGinnis v. McGinnis, 274 Mo. 284; Pomeroy's Equity Jurisprudence (4 Ed.) p. 2499; Wilson v. Drumrite, 24 Mo. 304; Gray v. Parker, 38 Mo. 160; Cruce v. Cruce, 81 Mo. 675; Young v. Powell, 87 Mo. 128. (3) On the former appeal this court found there was a joint adventure as charged in the petition and that Wolcott had been defrauded in the sale of his interest to defendants. The judgment was reversed and the cause remanded, with special directions to the circuit court to try the single issue of accounting. Where a judgment is reversed and the cause remanded with specific directions the decision is res adjudicata, and in this case the issues of joint adventure and fraud are not open for review either in the trial court or in this court on the second appeal. Van Fleet, p. 1324, sec. 683; Stump v. Hornback, 109 Mo. 262; Hurck v. Erskine, 50 Mo. 116; Shroyer v. Nickell, 67 Mo. 589; Chouteau v. Allen, 74 Mo. 59; Hecker v. Vlish, 37 S.W. (2d) 444; First Natl. Bank of Las Vegas v. Franklin Bank, 233 S.W. 14; McLure v. Bank, 263 Mo. 136; State ex rel. Robertson v. Kelley, 293 Mo. 300; Pipkin v. Shockett, 117 Mo. 547; Tourville v. Railroad, 148 Mo. 623; Young v. Thresher, 123 Mo. 308; Keaton v. Jorndt, 259 Mo. 179. (4) There is a marked distinction between "the law of the case" and res adjudicata. The foregoing cases on res adjudicata are clearly distinguishable from the line of cases such as Mangold v. Bacon, 237 Mo. 496 and cases following that decision where the judgment was reversed and the cause remanded generally and without specific directions. Southern Railway Co. v. Clift, 260 U.S. 319. Without exception the authorities hold that where a judgment is reversed and the cause remanded with specific directions the decision is res adjudicata and the issues thereby finally determined cannot be reopened. Mangold v. Bacon, 237 Mo. 496. (5) The purported newly discovered evidence relating to joint adventure and fraud was wholly incompetent and irrelevant. (a) The so-called proof consisted of unexecuted documents which had been in the possession of counsel for defendants when the case was tried before Judge Landon, and the defendants had knowledge of the existence, thereof during all the time this suit has been pending. (b) There was no competent preliminary proof as to the existence or authenticity of these documents and that they had been presented to Wolcott or that he had knowledge of them. To make such evidence competent there must be proof that the same was known to Wolcott and approved by him. 1 Wigmore on Evidence, sec. 95, Vol. 2, secs. 120]; McFarlane v. Association, 124 Mo. 204; Grain Co. v. Rys. Co., 120 Mo. App. 203; Ward v. Transfer & Storage Co., 119 Mo. App. 88; Goucher v. Novelty Co., 116 Mo. App. 99. (c) The documents do not tend to contradict the existence of a joint adventure as found by this court and therefore are inadmissible as a pretext for re-opening the issues heretofore determined by this court. Denny v. Guyton, supra. (6) The defendants as trustees ex maleficio were and are bound to account to the cestui que trust for the full share of Wolcott in the joint adventure together with interest computed thereon at six per cent per annum with annual rests. They converted his interest to their own use, kept him out of the possession of his share and are still contesting his right to any interest in the joint adventure. Wootton Land & Fuel Co. v. Ownbey, 265 Fed. 100. (a) The petition inter alia prays an accounting and has a general prayer "for such other and further relief as to the court may seem proper, the premises considered." Such a prayer covers all interest which the facts in evidence warrant. McQuitty v. Steckdaub, 190 S.W. 590; Sanguinett v. Webster, 153 Mo. 343; McClure v. Bank of Commerce, 252 Mo. 520; Gibson v. Shull, 251 Mo. 491; Phillips v. Jackson, 240 Mo. 336; Holland v. Anderson, 38 Mo. 58; Canadian Car & F. Co. v. American Can Co., 258 Fed 363; Cook v. Lowry, 95 N.Y. 103 (Interest with annual rests allowed). (b) This is a case for the assessment of interest with annual rests from February 21, 1918, the end of the joint adventure. Pomeroy v. Benton, 77 Mo. 64; Pomeroy v. Benton, 57 Mo. 531; Heath v. Waters, 40 Mich. 457; I Greenleaf on Evidence, sec. 34; Frost v. Winston, 32 Mo. 489; In re J.L. Davis, Executor, 62 Mo. 454; Sowers v. Ingram, 74 Mo. 193; Cruce v. Cruce, 81 Mo. 676; Bobb v. Bobb, 89 Mo. 421; Scott v. Cruce, 62 Mo. 472; Perry on Trusts, sec. 471; Barnett v. Sanders, 57 How. 542; Miller v. Lusk, 100 Cal. 609, 25 Pac. 345; 24 C.J. 87, sec. 510; 33 C.J. 203, sec. 60; Arkadelphia Co. v. Railways, 249 U.S. 147; Chicago v. Tibbetts, 104 U.S. 125; 15 R.C.L. 36, 37; 37 A.L.R. p. 49 et seq. (7) A minority stockholder has no title or right of action for profits against the corporation until a dividend is legally declared. 6 Fletcher Cyc. on Corporations, 3652; Secs. 4064, 4959, R.S. 1929. (a) Frank Guyton was not a party to the joint adventure. No claim was made by him against the Guyton and Harrington Mule Company for 1/30 of the profits, and by arrangement between himself and his father he received ¼ of all the profits coming to his father as his full interest and share in the profits of the Guyton and Harrington Mule Company. (8) The deduction of $33,209.89 made by the court from the interest of $199,605.87 paid out of profits of the Guyton and Harrington Mule Company was an improper deduction. This was not an expense chargeable to the joint adventure. Sanguinett v. Webster, 153 Mo. 375; Denny v. Guyton, supra. (9) The court improperly deducted items from the deficit account of the Guyton and Harrington Mule Company. The deficit shown by the books of $228,850.85 and the interest paid on old indebtedness of $199,605.87 were paid out of the profits of the Guyton and Harrington Mule Company in which Wolcott, under his joint adventure agreement was entitled to a share of approximately 1/6. The joint adventure was not concerned with the rehabilitation or re-valuation of the Guyton and Harrington Mule Company, and its members, including Wolcott and Beers, were entitled to their respective shares of the full profits earned by the adventure. Denny v. Guyton, supra; Wootton Land & Fuel Co. v. Ownbey, 265 Fed. 100. (10) It is improper to deduct from the profits anything on account of the purported growing crops on the Lathrop farm in 1914 or to deduct for losses that occurred through the misconduct or fraud of trustees ex maleficio. Denny v. Guyton, supra; Wootton Land & Fuel Co. v. Ownbey, 265 Fed. 100; Hollister v. Simonson, 55 N.Y. Supp. 372; Childers v. Neely, 47 W. Va. 70, 34 S.E. 828; Poss v. Gottlieb, 193 N.Y. Supp. 418; Pierce v. Daniels, 25 Vt. 624; Carlin v. Donegan, 15 Kan. 495; Murphy v. Crafts, 13 La. Ann. 519; Ball v. Levin, 48 La. Ann. 359; Bohrer v. Drake, 33 Minn. 408; Jessup v. Cook, 6 N.J. Law 434; Smith v. Loring, 2 Ohio, 440; Crawford v. Spotz, 11 Phila. 255; Gordon v. Moore, 8 Pa. Co. Ct. R. 289, 134 Pa. 486; Looney v. Gillinwaters, 58 Tenn. 133; Morris v. Wood, 35 S.W. 1013; Gill v. Wilson, 2 Wilson, 380; 47 C.J. 1255 and authorities there cited. (11) No deductions are proper for the following items claimed: (a) Cattle and hogs at Lathrop and seed account at Lathrop, which were not...