Holmes v. Doe Run Lead Co.

• Decision Date: 08 June 1920
• Docket Number: No. 15888.,15888.
• Parties: HOLMES v. DOE RUN LEAD CO. et al. (ST. JOSEPH LEAD CO., Interpleader).
• Court: Missouri Court of Appeals

223 S.W. 772

HOLMES v. DOE RUN LEAD CO. et al. (ST. JOSEPH LEAD CO., Interpleader).

No. 15888.

St. Louis Court of Appeals. Missouri.

June 8, 1920.

Appeal from Circuit Court, St. Francois County; Peter H. Huck, Judge.

"Not to be officially published."

Action by Robert Holmes against the Doe Run Lead Company and others, in which the St. Joseph Lead Company filed petition of intervention and interpleader. From a judgment for plaintiff, the St. Joseph Lead Company appeals. Affirmed.

Nagel & Kirby, of St. Louis, for appellant.

Jourdan, Rassieur & Pierce, of St. Louis (Benj. H. Marbury, of Farmington, of counsel), for respondent.

ALLEN, J.

This suit involves the title to 23 shares of stock of the Doe Run Lead Company, a Missouri corporation, hereinafter termed the Doe Run Company. The conflicting claimants to such stock are the plaintiff, Robert Holmes, a resident of the city of St. Louis, respondent here, and the St. Joseph Lead Company (hereinafter termed the St. Joe Company) interpleader below, appellant here. Plaintiff claims the absolute and unqualified title to the stock, under a purchase made by his broker at a public foreclosure sale in the city of St. Louis, made by the National Bank of Commerce of said city, to which the stock had been pledged as collateral security by one Charles G. Ricker.

The appellant interpleader claims under a contract signed by said Ricker, his wife, and son, while they owned the shares in question, providing for the exchange thereof (subject to the lien of the Bank of Commerce) for shares of stock of the St. Joe Company, which said contract was consented to by the bank, though the bank later sold the stock in disregard of said agreement and without notice that the stock was subject thereto. It is the claim of the interpleader that plaintiff, Holmes, knew, or was affected with notice, of the fact that the stock was subject to such agreement, and therefore acquired it subject thereto.

The suit was instituted December. 4, 1915, against the Doe Run Company, one Dearing, alleged to be the secretary of the company, and one Adami, alleged to be the vice president in charge thereof, seeking to compel the transfer of said stock to plaintiff on the books of the Doe Run Company.

The petition alleges that on January 26, 1914, one Montgomery was the owner of 23 shares of stock of the Doe Run Company, evidenced by certificate No. 3024 for 3 shares and certificate No. 3023 for 20 shares; that on April 16, 1915, Montgomery transferred and assigned to plaintiff said certificate No. 3023, and signed a power of attorney to transfer the stock on the books of the corporation; that on the same day Montgomery transferred and assigned to A. H. Fisher, B. H. Marbury, and L. W. Childress, for plaintiff, said certificate No. 3024, and that Fisher, Marbury, and Childress assigned and transferred the same to plaintiff. It is alleged that on December 4, 1915, plaintiff made demand on the defendants for the issuance to him of certificates of stock in lieu of the above certificates, and that defendants refused so to do. The prayer of the petition is for a decree ordering the defendants to transfer the shares to plaintiff on the books of the company and to issue to plaintiff new certificates therefor.

The joint answer of defendants, after admitting the incorporation of the Doe Run Company, avers that defendants are not possessed of sufficient knowledge or information to form a belief as to whether said Montgomery was on January 26, 1914, the owner of said certificates Nos. 3023 and 3024, for a total of 23 shares of stock in defendant corporation, or whether plaintiff is the bona fide holder and owner of said certificates. The answer further alleges that the St. Joe Company claims to be the owner of and equitably entitled to said 23 shares of stock, by virtue of a certain written, contract for the sale of said stock to it, executed by Charles G. Ricker, Nelson D. Ricker, and Sallie D. Ricker, who were the owners of the stock at the time of the execution of such contract; that after the execution of the contract the stock was transferred to Montgomery, and certificates numbered 3023 and 3024 were issued to him as trustee for the three Bickers and the National Bank of Commerce in St. Louis; that plaintiff had full knowledge and notice of said contract prior to the acquisition of any rights which he may have to such stock; that defendants have notice of the claim of the St. Joe Company; that defendants claim no interest in said shares of stock, but are ready and willing to transfer the same to whomsoever may be determined to be the rightful owner thereof. And the answer prays for an order making the St. Joe Company a party to the suit and that it be required to interplead with plaintiff herein.

The record recites that after a hearing on the issues thus made by the petition and answer the court made an order requiring that the St. Joe Company interplead in the cause, and that pursuant to such order the St. Joe Company "filed its petition of intervention or interpleader." This pleading alleges that the St. Joe Company "asserts a claim of right" adverse to that of plaintiff to the said shares of stock, based upon facts which are alleged, in substance, as follows: That the St. Joe Company is a New York corporation licensed to transact business in this state, and engaged in mining and smelting lead ores, having the charter power to own stock in corporations engaged in a business substantially similar to that in which it is engaged (pleading a statute of New York purporting to confer such power); that the Doe Run Company is a Missouri business and mining corporation, owning large lead properties adjacent to those of the St. Joe Company, and is engaged in mining and concentrating lead ore; that the Doe Run Company was organized by persons who were then holders of substantial amounts of stock of the St. Joe Company, and since its organization a large majority of its stock has been held by owners of substantial amounts of stock of the St. Joe Company; that plaintiff for many years was a holder of stock in both companies; that since the organization of the Doe Run Company, and with the consent of plaintiff, the business relations of the two companies have been very close; that the Doe Run Company has had no smelter of its own, and the St. Joe Company has had the only smelter in the district; that it was to the advantage of both companies to sustain close relations, in that the St. Joe Company had a large and more constant supply of ore to be treated, while the Doe Run Company found a constant, convenient, and desirable market for its lead ores; that in 1913 the Doe Run Company owed approximately $4,000,000 of which $2,000,000 was represented by bonds maturing March 1, 1915, the remainder being floating debts, the greater part of which were owed to the St. Joe Company or to companies controlled by it; that a joint committee of the stockholders of both companies was appointed, which committee recommended that the respective properties and businesses of the two companies be consolidated and merged along lines suggested, and this report was approved by the board of directors of each company, and notice thereof was sent to all of the stockholders of the Doe Run Company, together with copies of an "agreement and proxy" to be signed by each stockholder and sent in; that by such agreement and proxy it was provided that the same should become effective when signed by holders of SO per cent., in par value, of the outstanding stock of the Doe Run Company, and it was further provided that the merger might be effected through a purchase by the St. Joe Company of either the properties or the stock of the Doe Run Company; that on November 17, 1913, the holders of more than 91 per cent. of the stock of the Doe Run Company, including plaintiff had executed said agreement and proxy, and on that date the stockholders of the Doe Run Company were notified of that fact, and at a meeting of the stockholders of the Doe Run Company, held on December 6, 1913, the holders of 90 per cent. in amount of the outstanding stock of said company, including plaintiff and the holders of the stock here in controversy, voted to ratify the action of the board of directors in approving and adopting the recommendation of said joint committee; that the St. Joe Company elected to purchase the stock of the Doe Run Company, and gave the stockholders of the latter company notice of that fact, and did thereupon purchase more than 91 per cent. of all the stock of the Doe Run Company; that Charles G. Ricker had owned 15 shares, Neslon D. Ricker 5 shares, and Sallie D. Ricker 3 shares of the stock of said company, and each of said persons signed the agreement and proxy; that the stock certificates evidencing said 23 shares of stock were then held by the National Bank of Commerce in St. Louis as collateral to secure a loan, and said bank consented to the signing of the agreement and proxy by the three owners of said stock; that thereafter, in January, 1914, the bank requested a transfer of the stock on the books of the corporation to one Montgomery, and in writing confirmed its previous consent that the stock be bound by said agreement and proxy, and agreed that if such shares were transferred to Montgomery the bank would cause the new certificates to be indorsed and delivered, for the purpose of exchange, in accordance with the agreement and proxy; that the new certificates were issued to Montgomery, but the bank failed to deliver them for exchange; that plaintiff claims to have acquired said shares of stock, but if he did so it was with notice or knowledge that the stock was subject to said agreement and proxy, and plaintiff holds any interest that he may have in said stock to the terms of said agreement and proxy; that the stock of the Doe Run. Company is not listed on the market and cannot be readily obtained elsewhere; that its value is not readily or...