Insurance Agency Co. v. Blossom

• Decision Date: 08 February 1921
• Docket Number: No. 16211.,16211.
• Citation: 231 S.W. 636
• Parties: INSURANCE AGENCY CO. v. BLOSSOM et al.
• Court: Missouri Court of Appeals

231 S.W. 636

INSURANCE AGENCY CO. v. BLOSSOM et al.

No. 16211.

St. Louis Court of Appeals. Missouri.

February 8, 1921.

Rehearing Denied June 7, 1921.

Appeal from St. Louis Circuit Court; Vital W. Garesche, Judge.

"Not to be officially published."

Suit by the Insurance Agency Company, a corporation, against Dwight B. Blossom, individually and as one of the trustees under dissolution of the Webb Motor Fire Apparatus Company, a corporation, and another. From judgment for defendants, plaintiff appeals. Affirmed.

Greensfelder & Levi, of St. Louis, for appellant.

Jesse McDonald and Arnold Just, both of St. Louis, for respondents.

BRUERE, C.

This is a suit in equity. The pith of the lengthy petition in the case is: That the plaintiff obtained a judgment on the 20th day of October, 1914, in the circuit court of the city of St. Louis against the Webb Motor Fire Apparatus Company, on a debt due June 1, 1912. That execution was Issued thereon, at the April term, 1915, of said court, and returned unsatisfied, and that the judgment remained unpaid. That the defendant, Dwight B. Blossom, was a director and officer of said company, and as such assented to the organization of a corporation, known as the "Webb Company." That pursuant to an agreement entered into, between the stockholders and officers of the Webb Motor Fire Apparatus Company and the stockholders and officers of the Webb Company, all the assets of the Webb Motor Fire Apparatus Company were transferred to the Webb Company and removed from the state of Missouri to the state of Pennsylvania. That the stockholders and officers of the Webb Motor Fire Apparatus Company misappropriated all the assets of the Webb Motor Fire Apparatus Company to their own use instead of applying the same to the payment of its debts. That the defendant, Dwight B. Blossom, received, for his participation in the above transaction, $4,150 par value of preferred stock and $4,150 par value of the common stock of the Webb Company. That at that time Dwight B. Blossom was the owner of 82,300 shares of the capital stock of the Webb Motor Fire Apparatus Company, the par value of which was $82,300, for which he had only paid $41,150; leaving a liability against him on account of said unpaid stock of $41,150. That the defendant, Dwight B. Blossom, was guilty of violations of the corporation laws of the state of Delaware, in that, as director of the Webb Motor Fire Apparatus Company, he had ordered dividends to be paid, in amounts greater than plaintiff's claim, out of property of the said corporation other than its surplus and net profits. The petition concludes by declaring that, because of the matters therein stated, the said Dwight B. Blossom became a trustee for the benefit of the plaintiff and became liable to plaintiff to the amount of its judgment against the Webb Motor Fire Apparatus Company; it prays judgment for said amount. The answer is a general denial.

The circuit court found the issues in favor of the defendants and entered up a judgment for the defendants. Plaintiff appeals from said judgment.

The facts in the case are not controverted. The case is such that it demands a detailed statement of facts. The facts are: The plaintiff is a judgment creditor of the Webb Motor Fire Apparatus Company. The debt on which the judgment was obtained accrued during the month of May, 1912. The Webb Motor Fire Apparatus Company was a Delaware corporation doing business in the city of St. Louis, Mo. The defendant, Dwight B. Blossom, was the vice president and treasurer of that company until July 1, 1912. He was the owner of 82,300 shares of stock of said company of the par value of $82,300, for which he paid par, in cash. On April 17, 1912, he was also a creditor of said company to the extent of $89,282.53. The company became financially involved, and on April 17, 1912, a contract was entered into, between G. E. Blakeslee, on behalf of himself and his associates, and certain stockholders of the Webb Motor Fire Apparatus Company, including Dwight B. Blossom, the defendant, whereby the said Blakeslee agreed to cause to be issued trustees' certificates, representing preferred and common stock in a proposed new corporation, in exchange for stock held by said stockholders of the Webb Motor Fire Apparatus Company. Said contract further provided that the stockholders of the old company were to receive the same number of shares in the new company as they held in the old; the shares were to be divided 50 per cent. preferred and 50 per cent, common stock of said new corporation. The total number of shares to be thus exchanged totaled 206,900. Of these Dwight B. Blossom was to receive 41,150 preferred and 41,150 shares of common stock. The old company was capitalized for $300,000; the new company was to have a capital stock of $1,500,000. The contract further provided that 12 notes of the proposed corporation for $3,273.55 each, payable in 1, 2, 3, 4, 5, 6, 7, 8, et 10, 11, and 12 months, respectively, should be executed and delivered to Dwight B. Blossom in part payment of the amount of $89,282.53, then due said Blossom from the said Webb Motor Tire Apparatus Company, and that for the remaining $50,000, of said indebtedness the said Blossom was to receive $50,000 of the preferred stock and $25,000 of the common stock of said new corporation. The contract further provided that G. E. Blakeslee should furnish, within 30 days of the date thereof, a sum not less than $50,000 to be used in paying claims against the Webb Motor Fire Apparatus Company. It was further provided that there should be sold, on or before the 1st day of July, 1912, at par, $120,000 of the preferred stock of said new corporation, which said $120,000 would carry with it a stock bonus of $60,000 of the common stock. The contract was to be consummated on or before the 1st day of July, 1912....