Estel v. Midgard Inv. Co.

• Decision Date: 02 February 1932
• Docket Number: No. 20335.,20335.
• Citation: 46 S.W.2d 193
• Parties: ESTEL et al. v. MIDGARD INV. CO. et al.
• Court: Missouri Court of Appeals

46 S.W.2d 193

ESTEL et al. v. MIDGARD INV. CO. et al.

No. 20335.

St. Louis Court of Appeals. Missouri.

February 2, 1932.

As Modified on Denial of Rehearing February 17, 1932.

Appeal from Circuit Court, Perry County; E. M. Dearing, Judge.

"Not to be officially published."

Suit by R. E. Estel and others, in behalf of themselves and all others similarly situated, against the Midgard Investment Company, C. A. Kiesler, and others. From judgment, defendant Kiesler appeals.

Affirmed.

See, also, 38 S.W.(2d) 1046.

John A. Hope, of St. Louis, and Clyde Williams, of Hillsboro, for appellant.

Chas. A. Killian and P. B. Hood, both of Perryville, for respondents.

SUTTON, C.

This is an action in equity, commenced in the circuit court of Perry county, on February 20, 1926, and afterwards transferred, on change of venue, to the circuit court of Jefferson county.

The petition alleges that the defendant Midgard Investment Company was incorporated as a business corporation under the laws of the state of Missouri, on May 30, 1915, with a capital stock of $50,000, divided into five hundred shares of $100 each, and that plaintiffs are the owners of the aggregate of one hundred sixty-nine shares of said stock; that the charter of said Midgard Investment Company was revoked by the secretary of state, on January 21, 1921, for failure to comply with the laws in relation to annual registration and the filing of annual statements and anti-trust affidavits, and that its charter is still forfeited; that defendants C. A. Kiesler, J. H. Kiesler, and H. F. Weiss were at all times the sole and only directors of said corporation, and had, and still have, the custody and control of the books and assets of said corporation; that since the revocation of the charter of said corporation the said C. A. Kiesler and J. H. Kiesler have had full possession of all of the assets of said corporation; that the said directors wholly failed to notify or acquaint the stockholders of said corporation of the revocation of its charter, and that plaintiffs did not learn thereof until January 22, 1926; that the last meeting of the stockholders of said corporation was held in the year 1916, since which time the said directors have wholly failed to call any meeting of the stockholders; that the said corporation had no by-laws, and no time for a stated annual meeting; that the said board of directors never at any time or place made any statement to the stockholders of the business of said corporation as required by law; that the said directors have wholly failed to perform the duties imposed upon them by the statute, requiring them to settle the affairs of the corporation after its dissolution and distribute its effects among the stockholders, but on the contrary have led the stockholders to believe the corporation was a going concern and its business affairs in good shape, and were paying the stockholders, applying for the same, an annual dividend of 6 per cent. on their stock, until within the last few months, when it first came to the knowledge of these plaintiffs that the charter of said corporation had been revoked; that, if said corporation has any property or effects, they are wholly within the knowledge and possession of the said C. A. Kiesler and J. H. Kiesler, and are so held by them that there is no way by which these stockholders can come to a knowledge of them or protect their interest therein, except through the intervention of this court; that these plaintiffs have good reason to believe, and do believe, that the defendant H. F. Weiss has no knowledge of the affairs of said corporation, or of the books of said corporation, if any exist, and that the business of said corporation was conducted and managed solely by the said C. A. Kiesler and J. H. Kiesler; that plaintiffs are the owners of stock of said corporation and as such are entitled to a knowledge of the business and affairs of said corporation at the hands of its said directors; that no such information has been given them by said directors, further than a verbal statement of the said C. A. Kiesler and J. H. Kiesler that the stock of said corporation has no value. The prayer of the petition is, in substance, that the defendants be required to account for their management and disposition of the funds, assets, and business of the corporation; that the court order and decree the payment by them to the company, or any receiver appointed therefor, of all sums of money and the value of the property which may have been acquired by themselves, or transferred to others, or lost or wasted; that a receiver be appointed, to take charge of the business, property, and effects of said Midgard Investment Company, and to collect, sue for, and recover the debts and demands that may be due, and the property that may belong to said corporation, to account for the same to the stockholders, and to preserve and keep the same intact for the persons who may be found entitled thereto; that the defendants be enjoined from conveying, transferring, or alienating any of the assets, property, or effects of said corporation, and that such other and further relief be granted as the court may deem just and proper in the premises.

Upon the trial of the cause, the court gave judgment for plaintiffs, directing C. A. Kiesler, J. H. Kiesler, and H. F. Weiss, trustees of the corporation, to file an account and settlement of their management and disposition of the funds, assets, and business of the corporation, and enjoining them from conveying, transferring, or alienating any of the assets, property, or effects of said corporation. From this judgment C. A. Kiesler has appealed to this court.

The appellant says the judgment below is erroneous, and must be reserved, because there is no proof that he was a stockholder or director of the corporation. It therefore becomes necessary to review the evidence with respect to this issue.

Plaintiffs introduced in evidence the articles of association of the corporation, signed, acknowledged, and sworn to before a notary public, on February 9, 1915, by C. A. Kiesler, J. H. Kiesler, H. F. Weiss, and other subscribers to the stock of the corporation. The articles set forth that the amount of the capital stock is $50,000, divided into five hundred shares of the par value of $100 each; that the same has been bona fide subscribed, and the whole thereof actually paid up in lawful money of the United States, and is in the custody of the persons named as the first board of directors. C. A. Kiesler, J. H. Kiesler, H. F. Weiss, and fifteen others are named as shareholders, the number of shares subscribed by C. A. Kiesler, J. H. Kiesler and H. F. Weiss being two hundred, one hundred fifty, and ten shares, respectively. C. A. Kiesler, J. H. Kiesler, and H. F. Weiss are named as the first directors. Stock certificates were issued to a number of the subscribers, but it does not appear that any certificate was issued to C. A. Kiesler or J. H. Kiesler. Plaintiff Charles A. Killian, who was a stockholder, testified that he knew from looking at the books that no certificate was issued to C. A. Kiesler or J. H. Kiesler, but that C. A. Kiesler said that he was a stockholder. A paper purporting to be a report of the inspectors at the election held on January 16, 1916, was introduced in evidence, showing the election of C. A. Kiesler, J. H. Kiesler, and H. F. Weiss, as directors, each of said persons receiving four hundred twenty-five votes. Records were introduced in evidence showing that on December 1, 1915, dividends were paid to Kiesler Bros., H. F. Weiss...