Hequembourg v. Edwards

• Decision Date: 05 March 1900
• Citation: 155 Mo. 514,56 S.W. 490
• Parties: HEQUEMBOURG v. EDWARDS et al.
• Court: Missouri Supreme Court

56 S.W. 490

155 Mo. 514

HEQUEMBOURG v. EDWARDS et al.

Supreme Court of Missouri.

March 5, 1900.

CORPORATIONS — VOLUNTARY ASSIGNEE — DIRECTORS — STOCKHOLDERS — ARTICLES OF ASSOCIATION — PAYMENT OF STOCK — PEREMPTORY INSTRUCTION — ESTOPPEL — TITLE OF ASSIGNOR — FRAUD LACKING — PAROL TESTIMONY.

1. In a suit brought by the voluntary assignee of a corporation against its directors, who were also its stockholders, the petition alleged, and evidence showed, that the articles of association certified payment of one-half the capital stock in cash, in the hands of the directors, but that only a portion thereof was so paid, and plaintiff sought to recover the balance thereof. The evidence showed that such portion was all the capital stock ever paid to or accounted for by the directors. Held, that plaintiff was not entitled to recover.

2. A voluntary assignee of a corporation, prior to Laws 1897, p. 38 (Rev. St. 1899, § 365), conferring on assignees new powers and duties, could not recover against its directors moneys which were never in its treasury, nor in the control of such directors.

3. Directors of a corporation, who were its only stockholders, who certified in their articles of association payment to them of one-half the capital stock, were not estopped thereby, prior to Laws 1897, p. 38 (Rev. St. 1899, § 365), conferring on assignees new powers and duties, to deny such payment in an action against them as such directors by the voluntary assignee of such corporation, since such assignee succeeded only to the title of the assignor, and the essential element of fraud was lacking.

4. In an action by a voluntary assignee of a corporation against its directors, who were also its only stockholders, to recover a certain sum certified by the articles of association to have been paid on the capital stock to such directors, testimony that only a portion thereof had been paid in was properly admitted, since, in the absence of elements of estoppel, the certificate in the articles of association was only prima facie evidence of such payment, and disputable with oral testimony.

Sherwood and Marshall, JJ., dissenting.

In banc. Opinion in division (50 S. W. 908) reversed, and judgment in circuit court affirmed.

The Builders' Iron Works, a business corporation, on September 15, 1894, made a voluntary assignment of all its assets for the benefit of its creditors. The plaintiff is the assignee under that deed of assignment. The defendants were the directors of the corporation, and for alleged dereliction in that capacity they are here sued. The suit is to recover $7,000 of the capital stock, which the petition essays to allege came into the hands of the defendants as directors, and for which they have failed to account. According to the petition it appears that the capital stock of the corporation was $20,000, divided into 200 shares of the par value of $100 per share, of which defendant Edwards subscribed for 100 shares, and defendants Kilpatrick and Hunleth for 50 each, so that those three composed the list of stockholders, and the entire board of directors; that the articles of association, which were signed by those three, certified that the entire stock was subscribed, and one-half paid up in cash, and then in the hands of the board of directors, but that the defendants had accounted to the corporation for only $3,000, leaving $7,000 unaccounted for, which the petition says is required to pay the debts of the concern, and, therefore, to recover which this suit is brought. The answer is a general denial. On the trial the evidence on the part of the plaintiff showed that the company was incorporated in 1893, with a nominal capital stock of $20,000. The articles of association, which were signed by the defendants, did certify that the whole amount of stock was subscribed, and one-half actually paid up in cash, and was then in the hands of the board of directors. The evidence also showed that in point of fact, although all the stock was subscribed as stated, yet only $3,000 was in fact ever paid in; that Edwards paid $1,500 on his subscription, and Kilpatrick and Hunleth $750 each, and that is all of the capital stock that was ever paid into the corporation. Appellant, in his statement filed herein, says: "No more than this $3,000 was ever contributed to the funds of the corporation, nor accounted for by the defendants." So there is no dispute on that point. At the close of the plaintiff's evidence the trial court gave an instruction to the effect that the plaintiff was not entitled to recover. Thereupon he took a nonsuit, with leave, and, failing in his motion to have the same set aside, brings this appeal.

Jos. T. Tatum, for appellant. Rassieur & Rassieur, for respondents.

VALLIANT, J. (after stating the facts).

1. There is some discussion in the briefs as to the nature of the cause of action stated in the petition. Counsel for respondents treat the petition as stating an action for conversion, but appellant's counsel says that that is a misconception; that the action is debt; yet, in the same connection, immediately adds that it is assumpsit on an implied promise. Measured by the rules of good pleading, the petition does not state a cause of action of any kind. It states argumentatively that $10,000 of the capital stock came into the hands of the board of directors; that is to say, it states that which is evidence tending to prove that fact, but refrains from stating the ultimate fact. Defendants' counsel and the trial court put the most favorable construction on the petition of which it was susceptible, — that is, by accepting the statement that the defendants, in their articles of agreement, acknowledged the receipt of that much money, as equivalent to a statement that they did receive it; but the plaintiff's counsel, in his reply brief, says that it is a misconception of his petition to say that it states as a fact "that there was then and there in the custody of said defendants the sum of $10,000 as the property and assets of said corporation"; that, while it is true that the petition does contain those words, yet he says it is stated as a deduction only, — that is, in this connection: "That, by the terms and acknowledgments of said articles of agreement, there was then and there in the custody," etc. Putting the pleader's own construction on his petition, it leaves it as a declaration to the effect that the defendants have accounted for only $3,000 of the capital stock of the corporation, whereas there is evidence to show that they received $10,000; and that is really its correct construction. It is all that the pleader himself says he intended to say, and it is all that his evidence justified him in saying.

It is also to be observed that the petition does not attempt to state a cause of action against the defendants as...