Hidden v. Edwards

• Decision Date: 05 April 1926
• Citation: Hidden v. Edwards, 285 S.W. 462, 313 Mo. 642 (Mo. 1926)
• Parties: EDWARD HIDDEN and ALBERT N. EDWARDS, Trustees, v. FLORENCE NOBLE EDWARDS and MARY ELIZABETH EDWARDS, Defendants; and ALBERT N. EDWARDS and EDWARD HIDDEN, as Trustees, and as Executors of Last Will of GEORGE L. EDWARDS, and BEN F. EDWARDS, MRS. F. W. EDWARDS and EDWARD L. EDWARDS, Surviving Partners of A. G. EDWARDS & SONS, and A. G. EDWARDS & SONS BROKERAGE COMPANY, Cross-Defendants; FLORENCE NOBLE EDWARDS and MARY ELIZABETH EDWARDS, Appellants
• Court: Missouri Supreme Court

285 S.W. 462

313 Mo. 642

EDWARD HIDDEN and ALBERT N. EDWARDS, Trustees, v. FLORENCE NOBLE EDWARDS and MARY ELIZABETH EDWARDS, Defendants; and ALBERT N. EDWARDS and EDWARD HIDDEN, as Trustees, and as Executors of Last Will of GEORGE L. EDWARDS, and BEN F. EDWARDS, MRS. F. W. EDWARDS and EDWARD L. EDWARDS, Surviving Partners of A. G. EDWARDS & SONS, and A. G. EDWARDS & SONS BROKERAGE COMPANY, Cross-Defendants; FLORENCE NOBLE EDWARDS and MARY ELIZABETH EDWARDS, Appellants

Supreme Court of Missouri

April 5, 1926

Appeal from St. Louis County Circuit Court; Hon. G. A Wurdeman, Judge.

Affirmed.

Glendy B. Arnold for appellants; Thos. C. Hennings and Sam A. Mitchell of counsel.

(1) Joint ownership in a business admittedly a partnership, the sharing of its profits and losses, and the participation in its management, in the absence of the clearest evidence to the contrary, becomes conclusive evidence of membership in the firm. Torbert v. Jeffrey, 161 Mo. 645. (2) The question of partnership or no partnership is one of law. Ellis v. Brand, 176 Mo.App. 554. (3) The statements of Knight, Grant and other witnesses to the effect that the corporation owned the assets of the firm and that the firm was agent of the corporation are legal conclusions and not evidence. Hendley v. Globe Refinery Co., 106 Mo.App 20; Curtwright v. Culver, 74 Mo. 179; Ellis v Brand, 176 Mo.App. 390; Roark v. Pullam, 229 S.W. 235. (4) The statements of Knight and Grant that Ben and Albert Edwards were not members of the firm are legal conclusions and not evidence. Ellis v. Brand, 176 Mo.App. 390; Roark v. Pullam, 229 S.W. 235. (5) The officers and directors of even a solvent private business corporation, without the unanimous consent of its stockholders, have no authority or power to alienate all of its property and to discontinue the business for which it was created. Feld v. Roanoke Inv. Co., 123 Mo. 603; Cummings v. Parker, 250 Mo. 427; Coleman v. Hagey, 252 Mo. 102. (6) The transfer of all of the property of the corporation to the firm, with the power and authority in the firm to deal with said property as partnership property, was the act of its stockholders, and not a corporate act, and its officers making such transfer were the agents of the stockholders. Feld v. Roanoke Inv. Co., 123 Mo. 603; Cummings v. Parker, 250 Mo. 427; Coleman v. Hagey, 252 Mo. 102. (7) The transfer of all of the corporate property to the stockholders composing the firm, and the discontinuance of the business of the corporation for fifteen years, was a distribution of the corporate property among its stockholders, which destroyed the corporate title thereto. 14 C. J. p. 59, secs. 20, 21; Cornell v. Corbin, 64 Cal. 197; In re Rieger, Kapner & Altmark, 157 F. 613. (8) The corporation and the stockholders having agreed that the firm should have the legal power in cases of death or withdrawal of a partner and stockholder to treat the assets of the firm as firm property for the purpose of accounting to the legal representatives of a deceased partner or to a withdrawing partner, the corporation and its stockholders are estopped to assert the invalidity of the contract or that it does not mean what it says. McFarlane v. McFarlane, 278 Mo. 1; 21 C. J. 1236, and Sec. 244, p. 1111; Hodde v. Hann, 283 Mo. 329; DeLashmutt v. Teetor, 261 Mo. 441; Spence v. Renfro, 179 Mo. 421. (9) "Death operates as a dissolution of a partnership; the law has never been otherwise." Exchange Bank v. Tracy, 77 Mo. 599. (10) "The law imperatively requires that when a copartnership is dissolved by death the affairs of the firm shall be settled in administration." Ensworth v. Kerr, 68 Mo. 284; State ex rel. v. Withrow, 141 Mo. 85. (11) The probate court is without jurisdiction of demands by the surviving partners against the estate of a deceased partner until there has been an adjustment and settlement of the deceased partner's interest in the firm by the surviving partners, and its allowance of the demands in this case was a nullity. Leabo v. Renshaw 61 Mo. 292; Ross v. Carson, 32 Mo.App. 148; Gaskill v. Spence, 83 Mo.App. 380; Mulhall v. Cheatham, 1 Mo.App. 476; Easton v. Courtwright, 84 Mo. 27.

Sam B. Jeffries, Arthur E. Simpson and Paul F. Plummer for respondents.

(1) The question of partnership vel non as between the parties is to be determined by their intention. Fuel Co. v. Brady, 202 Mo.App. 551; Hindman v. Secoy, 218 S.W. 418; Mingus v. Bank of Ethel, 136 Mo.App. 413; Brown v. Houchin, 154 Mo.App. 261; Chapin v. Cherry, 243 Mo. 407; Hughes v. Ewing, 162 Mo. 261; McDonald v. Matney, 82 Mo. 365; Freeman v. Bloomfield, 43 Mo. 392; Torbert v. Jeffrey, 161 Mo. 645; Ellis v. Brand, 176 Mo.App. 393. (2) The referee's findings that all of the property in the possession of the firm of A. G. Edwards & Sons was, in fact, owned by A. G. Edwards & Sons Brokerage Co., was supported not only by substantial but by overwhelming evidence, and such findings should be deferred to by this court. State ex rel. Wabash v. Pub. Serv. Comm., 271 Mo. 155; New England Loan Co. v. Browne, 177 Mo. 412; Snell v. Harrison, 83 Mo. 651; Parker v. Robert, 16 Mo. 657; Mathias v. O'Neil, 94 Mo. 520; Jamison v. Bagot, 106 Mo. 240. (3) There was no dissolution of A. G. Edwards & Sons Brokerage Co. Jackson v. Hooper, 27 L. R. A. (N. S.) 658; Cuppy v. Ward, 176 N.Y. 233; Canning Co. v. Evans, 163 Mo.App. 564. (4) Estoppel is available only to party who has altered his position in reliance upon the truth of the statement in question. Schilling Brew. Co. v. Schneider, 110 Mo. 83; McFarland v. McFarland, 278 Mo. 1; DeLashmutt v. Teetor, 261 Mo. 412; 22 C. J. 1294, sec. 1727; p. 1233, sec. 1645. (5) The provisions in articles of partnership that firm shall not be dissolved upon death of a member is binding upon the partners and on their privies. Exchange Bank v. Tracy, 77 Mo. 599; Edwards v. Thomas, 66 Mo. 468; Hax v. Burnes, 98 Mo.App. 707. (6) No creditors objecting, surviving partners have the right to settle with the executor of the estate of a deceased partner. Bell v. Bank, 188 Mo.App. 383; Werner's Law of Administration (3 Ed.) p. 427; Clay v. Field, 138 U.S. 464; Hoyt v. Sprague, 103 U.S. 613; Bell v. Hepworth, 135 N.Y. 442; Richter v. Poppenhausen, 39 How. 82; Laughlin v. Lorenz, 48 Pa. St. 275; Avery v. Myers, 60 Miss. 367; Hyde v. Easter, 4 Md. Chan. 84; Taylor v. Hutchison, 25 Gratt. 536; Young v. Ray, 193 S.W. 608; Powell v. Hurt, 108 Mo. 507; Buckham & Kibbe v. Singleton, 10 Mo. 405; Estate of Jarboe v. Jarboe, 227 Mo. 59; Sage v. Woodin, 66 N.Y. 578; Palmer v. Kingsford, 112 N.Y. 337. (7) The judgments of a probate court acting within its jurisdiction are conclusive and binding and not subject to collateral attack. Smith v. Black, 231 Mo. 681; McClure v. Baker, 216 S.W. 1018; Norton v. Reid, 253 Mo. 236; Carter v. Carter, 237 Mo. 624; Desloge v. Tucker, 196 Mo. 587; Cox v. Boyce, 152 Mo. 576; Macey v. Stark, 116 Mo. 481; Sherwood v. Baker, 105 Mo. 472; Murphy v. DeFrance, 105 Mo. 53.

OPINION

White, J.

The plaintiffs filed their petition as trustees in charge of property belonging to the defendants, Florence Noble Edwards and Mary Elizabeth Edwards, presented their accounts, duly verified, and prayed the court to accept their resignation as trustees, approve their accounts and appoint their successors.

The defendants, Florence Noble Edwards and Mary Elizabeth Edwards, filed a cross-bill making Albert N. Edwards and Edward Hidden as trustees, and as executors of the last will of George L. Edwards, also Ben F. Edwards, Mrs. F. W. Edwards, and Albert N. Edwards, surviving partners of the firm of A. G. Edwards & Sons, a partnership, also A. G. Edwards & Sons Brokerage Company, a corporation, cross-defendants, thus bringing into the case by the cross-bill the trustees in their capacity as executors, and one of them as a surviving partner; also two other persons and a corporation. The original defendants became cross-plaintiffs and the original plaintiffs became cross-defendants. The cross-bill alleged that the cross-defendants named therein had waived objections to the jurisdiction of the parties, misjoinder and non-joinder of causes of action. The several cross-defendants filed their separate answers to the cross-petition and the case was tried mainly upon the issues thus joined.

George L. Edwards, the husband of Florence Noble Edwards and the father of Mary Elizabeth Edwards, their only living child, died July 11, 1919. His wife and daughter were his beneficiaries under his will. During his life he created a trust and appointed the trustees mentioned, placing certain property in their hands as such.

In 1894 A. G. Edwards & Sons Brokerage Company, a corporation, was organized. It succeeded a partnership of that name which then passed out of existence. A. G. Edwards, who died many years before, was the father of the other Edwardses mentioned in the record. The brokerage company originally was incorporated for $ 100,000. Its capital stock was increased from time to time until it reached $ 1,000,000, but in 1920 it was reduced to $ 50,000.

In 1898 the officers and managers of the brokerage company found it very important to have a membership in the New York Stock Exchange, but no corporation under the requirements of that body could be a member. In order to accomplish their purpose certain officers of the corporation formed a partnership called A. G. Edwards & Sons, consisting of George L. Edwards, Harry F. Knight and A. D. Grant. A membership was taken out in the New York Stock Exchange in the name of Harry F. Knight, which he held for the benefit of the partnership, and which the partnership held in trust and for the benefit of the corporation. The amount paid for the membership was $ 26,000, and in addition a transfer fee of between...