Erskine v. Loewenstein

• Decision Date: 30 April 1884
• Citation: 82 Mo. 301
• Parties: ERSKINE, Appellant, v. LOEWENSTEIN.
• Court: Missouri Supreme Court

82 Mo. 301

ERSKINE, Appellant,

v.LOEWENSTEIN.

Supreme Court of Missouri.

April Term, 1884.

Appeal from St. Louis Court of Appeals.

AFFIRMED.

C. S. Hayden for appellant.

This case comes before this court as a non-jury or equity case. The court below passed upon the facts as a court, and not as a jury, and the question is whether the finding was a right finding. The finding of the trial court was not only against the evidence, but was against the weight of the evidence. The question is not how the respondent originally received, but how he afterwards held the stock. But even by the first agreement, a holding other than as collateral was provided for, and this other holding took place. By his own contract with Popper, respondent made himself liable. Independent of any such contract, respondent is liable by estoppel. His course of conduct, his acts and representations fix this liability upon him. Griswold v. Seligman, 72 Mo. 110. The respondent did not hold the stock as a purchaser in good faith and for valuable consideration, and cannot shelter himself under the decisions which relate to such parties.

Rombauer & Goldsmith for respondent.

The failure of the appellant to except to the action of the court in overruling his motion for execution, is fatal. Bateson v. Clark, 37 Mo. 31; City of St. Joseph v. Ensworth, 65 Mo. 628. The appellant has not made out a case, (1) Because he failed to show by proper evidence that the stock for which certificate No. 28 was issued to Edwards, was a part of that for which certificate No. 22 had been issued to Ashcroft. (2) Because there is no evidence whatsoever that the stock transferred by Popper to Loewenstein was the same for which certificate No. 28 was issued to Edwards. A purchaser or holder of stock who, in good faith, acquires it as full paid, cannot be held liable for amounts which are in fact unpaid thereon, if it was issued or is represented by the corporation to be full paid. Keystone Bridge Co. v. McCluney, 8 Mo. App. 496; Foreman v. Bigelow, 4 Clif. 508; Skrainka v. Allen, 76 Mo. 392; Brant v. Ehlen, 59 Mo. 1. The testimony of Edwards as to whether Popper acquired the stock in good faith as full paid, was a mere deduction or inference on his part, and was incompetent. 1 Wharton Ev., §§ 508, 509. The finding of the trial court on the issue is conclusive. Chapman v. McIlwrath, 77 Mo. 43. The fact that Loewenstein acquired the stock as full paid, is a sufficient defense.

PHILIPS, C.

Plaintiff, on the 15th day of February, 1876, recovered judgment against the Gravois Railroad Company, a corporation under the laws of this State, for the sum of $5,879.61. On return of execution, nulla bona, plaintiff, in 1877, began proceedings in the circuit court of St. Louis county, against the defendant, as a stockholder in said company, to realize his said judgment. This proceeding was discontinued by plaintiff. Afterwards, on the 24th day of January, 1880, he began the present proceeding by motion in the circuit court for the same purpose. There is no question made as to the act of incorporation of said company, and the existence and validity of plaintiff's judgment. The contention is, as to whether the defendant was the owner of unpaid stock in said concern.

The plaintiff's evidence sought to show that 1,000 shares, at $50 a share, of the company's stock, were issued to one Ashcroft; that one Edwards became the holder of 100 shares of this 1,000, which he transferred to one Popper; and that the defendant acquired the same from Popper. He further contends that the company never was paid for said stock, and that all the holders thereof had notice of this fact when they obtained the shares in question. The evidence showed that some time in the fall of 1873 Popper, who was cashier of the bank of Taussig, Gemp & Co., borrowed of the defendant the sum of $2,000 and transferred to him as collateral security for said loan, the said shares of stock. The certificate, therefore, was re-issued in the name of Loewenstein, and so continued in his name on the books of the company. About six months after the loan of this money, Popper repaid the same to defendant. It seems that at that time the said concern of Taussig, Gemp & Co. was in financial trouble. Whether Popper was involved personally in this embarrassment, does not affirmatively appear in this record. At all events, instead of having Loewenstein retransfer the said stock to him, upon satisfaction of the debt for which it was held, Popper requested defendant to retain the stock in his name and sell it for him. When the first movement was made against defendant, as such stockholder, by plaintiff in 1877, on advice of his counsel, he signed the blank transfer on the back of the certificate and delivered it to Popper, who thereafter held the same; but no transfer thereof from defendant to Popper was made on the books of the company. They continued to show that defendant was the owner. The defendant seeks to explain this omission by showing that the company ceased to do business or have any office, and that the books were taken into legal custody and held by one Harrison, an attorney at law representing claims against the insolvent company. But there was a period intervening between the payment of Loewenstein of the money borrowed by Popper and the dissolution or suspension of business by the company, when defendant might have made such transfer of his stock to Popper. On the contrary he consented to hold it for Popper until he could sell it.

Defendant's evidence tended to show that Popper was an innocent purchaser for value, and that defendant took and held the same, as aforesaid, without any notice that it was not “paid up stock.” The circuit court found the issues for defendant and refused the motion. Plaintiff appealed to the court of appeals, where the judgment of the lower court was affirmed. He brings the case here on appeal from the court of appeals.

I. Respondent objects to the consideration, by this court, of any imputed error of the trial court for the reason that the bill of exceptions does not show that plaintiff excepted at the time to the action of the court in overruling the motion for execution against the defendant. We think this is a misapplication of the rule invoked by respondent. That rule applies to motions such as are in cidental to the trial of the principal proceeding, and not to a case like this where the motion is the principal proceeding, the foundation of the litigation. This motion takes the place, under the statutory provision, of the suit in equity, at common law, to reach assets in the hands of the stockholder; and, to a certain extent, should be treated as a petition. The refusal of the court to grant the motion is a finding of the issue for the defendant. The remedy for the error of the court in making such finding is by motion for new trial and exception, at the time, to the action of the court in overruling this motion, as was done in this case. A more serious question might be as to whether the motion for the execution should not be preserved in the bill of exceptions in order to make it a part of the record. London v. King, 22 Mo. 336; Corby v. Tracy, 62 Mo. 515. We will give the appellant the benefit of this mere doubt.

II. Question is also raised by counsel as to whether this case on appeal, should not be treated as a trial at law; and as no questions of law were raised by instructions, the only inquiry here should be, was there any evidence to support the finding of the court? If there was any such evidence, respondent contends, the finding of the trial court on the evidence is conclusive on this court. As above suggested, this proceeding by motion is summary and we are disposed to treat it, in this respect, as a statutory substitute for a bill in equity. The statute, evidently, contemplates a hearing and determination of this motion by the court without the intervention of a jury. Hensley v. Baker, 10 Mo. 157, 158.

III. We are disposed on the evidence, to accept as correct the plaintiff's claim that this case should be treated as if it were a proceeding directly against Popper, instead of Loewenstein. Conceding that so long as defendant held the stock as collateral security he was a bona fide...