Henry G. Taussig Co. v. Poindexter

• Decision Date: 29 July 1930
• Citation: 30 S.W.2d 635,224 Mo.App. 580
• Parties: HENRY G. TAUSSIG COMPANY, APPELLANT, v. JOHN S. POINDEXTER AND F. H. DANGLADE, RESPONDENTS
• Court: Missouri Court of Appeals

30 S.W.2d 635

224 Mo.App. 580

HENRY G. TAUSSIG COMPANY, APPELLANT, v. JOHN S. POINDEXTER AND F. H. DANGLADE, RESPONDENTS

Court of Appeals of Missouri, Springfield

July 29, 1930

Appeal from the Circuit Court of Jasper County, Division Number 2.--Hon. Grant Emerson, Judge.

AFFIRMED.

Judgment affirmed.

Westley Halliburton for appellant.

(1) The legal estate in the personal property of the E. R. Miller Cigar Company which was placed by the declaration of trust in E. R. Miller, W. O. Miles and Phillip G. Gephart was never severed from the equitable estate which was placed by the declaration of trust in E. R. Miller, W. O. Miles and Phillip F. Gephart. The result of the execution of the declaration of trust was an immediate merger of the legal and equitable estates, utterly destroying the equitable estate which the declaration of trust attempted to create, and leaving the legal estate in Miller, Miles and Gephart as partners Foster v. Friede, 37 Mo. 43; Atkinson v Angert, 46 Mo. 515; State ex rel. v. Koch, 47 Mo. 582; Miller v. Talley, 48 Mo. 503, 504; Wead v. Gray, 78 Mo. 59, 65; Hospes v. Olmstedt, 13 Mo.App. 270, 273; Hospes v. Olmstedt, 83 Mo. 473 474; Collins v. Stocking, 98 Mo. 290, 295; Williams v. Brownlee, 101 Mo. 309, 314; Wilson v. Van Stine, 112 Mo. 315; Sieberling et al. v. Tipton, 113 Mo. 373, 377; Bassett v. O'Brien, 149 Mo. 381, 389 et seq.; Hayden v. Lauffenberger, 157 Mo. 88, 95; Peugnet v. Berthold, 183 Mo. 61, 64 et seq.; Chrisman v. Linderman, 202 Mo. 605, 618 et seq.; Phillips v. Jackson, 240 Mo. 310, 331; Trust Company v. Goings, 288 Mo. 505, 517; Willis v. Robinson, 291 Mo. 650, 676; Sater v. Hunt, 66 Mo.App. 527, 530; Wonderly v. Geissler, 118 Mo.App. 708, 718; Currey v. Lafon, 133 Mo.App. 163, 178; Gerardi v. Christie, 148 Mo.App. 75, 192 et seq.; Dent v. Matthews, 202 Mo.App. 451, 457; Petrie v. Reynolds, 219 S.W. 934, 938; Sorrell v. Bradshaw, 222 S.W. 1024, 1025. (2) Merger occurs where there are more than one trustee, for if there be two or more trustees, still the equitable estate will merge in the legal estate where all the trustees are the same persons as all the beneficiaries. Greene v. Greene, 125 N.Y. 506, 26 N.E. 739, 21 Am. St. Rep. 743, where three persons were both trustees and beneficiaries. Tilton v. Davidson, 98 Me. 55, 56 A. 215, where two persons were both trustees and beneficiaries. (3) As the declaration of trust failed to create a valid trust, the question arises as to what relationship was created among the share-holders. It has been held in numerous cases in this State that when persons associated themselves together, intending to form a corporation, and failed to create a corporation, the law will pronounce the persons so acting together as partners, with respect to the persons with whom they have dealt, and hold them to the responsibilities of partners. Richardson v. Pitts, 71 Mo. 128; Ferris v. Thaw, 72 Mo. 447; Martin v. Fewell, 79 Mo. 401; Simmons v. Ingram, 78 Mo.App. 603; Hyatt v. Van Riper, 105 Mo.App. 664; Smith v. Warden, 86 Mo. 382.

Ray Bond for respondent Poindexter.

A. E. Spencer and A. E. Spencer, Jr. for respondent Danglade.

(1) The declaration of trust was in such form as to create a proper common law trust, with no personal liability upon the holders of trustee's certificates. Darling v. Buddy, 318 Mo. 784, 1 S.W.2d 163; Krey Packing Company v. Hitchings, 18 S.W.2d 123. (2) Under the undisputed evidence this trust continued in force and there was no merger of title which prevented this. (3) Conceding both of these propositions to the appellant, still, the evidence does not show that respondents were partners, inter sese, in the enterprise and hence they cannot be held personally liable. National Bank of Commerce v. Francis, 296 Mo. 169, 246 S.W. 327; State ex rel. Jones v. Daues (Mo.), 13 S.W.2d 537; Darling v. Buddy, 318 Mo. 784, 1 S.W.2d 163. (4) Respondent Danglade only held certificates of beneficial interest as collateral security for the payment of a note given by the cigar company, and cannot be held personally liable.

COX, P. J. Bailey and Smith, JJ., concur.

OPINION

COX, P. J.

Action upon six trade acceptances totaling about $ 3900. Trial by court who found for the defendants. Plaintiff appealed.

When the petition was filed six other parties were made defendants with Poindexter and Danglade but the suit as to those six defendants was dismissed before judgment. The petition declared against all defendants as partners. Defendants Poindexter and Danglade each filed a separate answer which was a general denial and a denial under oath of the alleged partnership.

At the trial, plaintiff offered the trade acceptances declared upon which were accepted by E. R. Miller Cigar Company, by E. R. Miller. Plaintiff then admitted receipt on June 14, 1927, of $ 367.05 and on September 13, 1928, the sum of $ 223.90 which were paid as dividends upon the bankrupt estate of E. R. Miller Cigar Company. Plaintiff then attempted to prove the partnership by offering in evidence a certain declaration of trust agreement which plaintiff contends is void as a trust agreement and that by reason of that fact, these defendants who owned certain shares in the alleged trust estate were, as a matter of law, partners. This trust agreement at its beginning provided as follows:

"DECLARATION OF TRUST AGREEMENT.

"THIS DECLARATION OF TRUST, Made this 23rd day of February, 1922 by E. R. Miller, W. O. Miles and Phillip G. Gephart, hereinafter called, Trustees,

"WITNESSETH: That whereas, on the 23rd day of February, 1922, there was conveyed to said trustees certain moneys, right and interests and property rights as set forth in Schedule 'A' identified by the signatures of the parties thereto to be held by them upon the trust hereinafter set forth said conveyance being filed with said trustees and reference to which is hereby made,

"Now, Therefore, We the said Trustees, acting and speaking in our own behalf and that of our future associates, trustees and their successors and associates trustees of us and all of them do hereby declare said trust as follows:

"1. This declaration of trust shall be binding upon said trustees as well as future subscribers to shares, present holders or future purchasers of shares hereunder.

"2. This Association shall be designated, trade and do business as the E. R. Miller Cigar Company, and so far as practicable all business thereof shall be transacted and trust property and trust funds held under that name."

This alleged trust agreement also contained the following provisions:

"That the trustees should hold title to the property for the benefit of all shareholders and should serve until a vacancy should occur by death, resignation or removal, and all vacancies should be filled by the remaining trustees.

"That the beneficial interest in the trust should be divided into 1250 shares, each to have a nominal par value of $ 100. The trustees were to issue to each shareholder a negotiable certificate in such form as the trustees should by resolution adopt. These certificates should be personal property giving only the right to share in the profits of the business and a division of the trust funds upon the dissolution of the trust. It also provided that: 'It is hereby declared that a trust and not a partnership is hereby created and neither the trustees nor the shareholders, present or future, shall ever be personally liable hereunder as partners or otherwise.' The trustees certificate of interest issued to shareholders provided that it was fully paid and non-assessable subject to the declaration of trust.

"This declaration of trust was executed by E. R. Miller, W. O. Miles and Phillip G. Gephart on February 23, 1922.

"Schedule 'A' referred to in the beginning of the declaration of trust began with the following: THIS INDENTURE made this 23rd day of February, 1922, by and between E. R. Miller, W. O. Miles, and Phillip G. Gephart, holders of beneficial interest for themselves and their assigns and the undersigned trustees for themselves and their successors witnesseth:

"That the following described cash and property as below set forth has been this day transferred to the undersigned trustees as a trust estate in accordance with a certain agreement and a declaration of trust between the same parties of even date herewith to which this schedule is attached and of which it is made a part." This is followed by a list of property and cash contributed totaling $ 125,000. This document is signed by E. R. Miller, W. O. Miles and Phillip G. Gephart as trustees; also signed by the same parties as beneficial owners.

The contention of appellant is to the effect that since in the attempted establishment of this trust estate the trustees and the holders of the beneficial interests were the same persons they could not be trustees for themselves and since the trustees held the legal title and it was superior to the beneficial interests held by the same parties, the lesser estate was merged in...