Johnson v. Duensing, 47080

• Decision Date: 14 March 1960
• Docket Number: No. 47080,47080
• Parties: Harold E. JOHNSON, Plaintiff-Respondent, v. E. A. DUENSING, George Duensing, Jr., S. C. Vaughn, J. R. Proctor, R. W. Meyer, Charles Israel, Appellants, Missouri River Sand and Gravel Company, a Corporation, Defendant-Respondent, B. D. Trout, R. A. Johnson, Jr., G. W. Winn, Appellants.
• Court: Missouri Supreme Court

Page 950

332 S.W.2d 950

Harold E. JOHNSON, Plaintiff-Respondent, v. E. A. DUENSING, George Duensing, Jr., S. C. Vaughn, J. R Proctor, R. W. Meyer, Charles Israel, Appellants Missouri River Sand and Gravel Company, a Corporation Defendant-Respondent B. D. Trout, R. A. Johnson, Jr., G. W. Winn, Appellants.

No. 47080.

Supreme Court of Missouri, En Banc.

March 14, 1960.

L. O. Schaumburg, W. H. Martin, Schaumburg & Martin, Boonville, Edward T. Matheny, Jr., Caldwell, Eastin, Blackwell & Oliver, Kansas City, for appellants.

William H. Becker, Columbia, for respondent.

DALTON, Judge.

This cause comes to the writer on reassignment after an opinion on the merits failed of adoption. The action is in equity in two counts, both based upon the same factual averments. The cause was instituted in the Circuit Court of Cooper County on November 19, 1956, by plaintiff-respondent Johnson as a minority stockholder in the defendant Missouri River Sand and Gravel Company, a corporation. He characterizes the action as a minority stockholder's dervative action on behalf of the Corporation for the purpose of restoring to the Corporation a loss alleged to have been sustained by an unlawful sale of 545 shares of its treasury stock and to protect his proportionate interest in the corporate property and his alleged pre-emptive right to acquire additional shares of stock in the Corporation, when shares of its treasury stock are to be sold.

Plaintiff alleged that the loss and damage complained of was the result of the individual defendants acting in concert as the dominant and controlling group of officers, directors and stockholders of the Corporation; that said defendants acted in concert for the purpose of 'depriving the plaintiff of his preemptive rights to purchase a portion or all of the said five hundred forty-five (545) shares of stock owned by the corporation, and for the purpose of depriving the corporation of the difference between the par value of said shares of stock and the market value thereof * * *'; and that neither the plaintiff nor any other shareholder was given an opportunity to buy any of said stock owned by the Corporation or an opportunity to bid upon the same prior to said sale. The amount of difference between the market and sale value of the stock was not alleged, nor was the money value of the loss to plaintiff stated. Plaintiff further alleged that 200 shares of treasury stock in the Corporation had been sold to one of the directors and the other shares to parties selected by the defendant directors.

By the first count of the petition plaintiff sought a declaratory judgment and affirmative equitable relief, to wit, that the sale of 545 shares of the Corporation's treasury stock be declared illegal and the sale rescinded; that the stock, since resold, be returned to the Corporation; that, upon the return of the shares of stock to the Corporation properly endorsed, the original purchase price paid therefor be refunded to the present owners; that said stock be offered to the public for sale to the highest bidder, or to all shareholders proportionately who desired to buy at the fair market price, or at a figure to be found and determined by the court; that the election of certain directors be declared void; and that the court make other orders concerning costs and expenses and for other general relief.

The facts stated in the first count were realleged in the second count and a mandatory injunction was sought to supplement the relief asked in the first count. Plaintiff also asked 'that the personal defendants be ordered to repay to the corporation all expenses paid by the corporation for legal services for the defense of this suit and for counsel, advice, and services for the defense of the actions of the personal defendants complained of in this petition.' In addition, plaintiff asked for the appointment of a receiver and other relief. The Corporation joined with the individual defendants in defending the action and by answer adopted the allegations of the answer of the personal defendants.

The trial court found that the sale of the 545 shares of treasury stock on December 15, 1955, to a director and other persons chosen by the directors constituted a breach by the directors of their fiduciary duties and obligations as directors and officers of the Corporation and amounted to a constructive fraud upon the defendant Corporation and other stockholders interested therein. The court found the fair value of the treasury stock and its market value to be 'substantially in excess' of the value for which it was sold and ordered the sale rescinded and the shares returned to the Corporation for resale by the Corporation at public auction to the highest bidder. The court found that said shares of stock had been sold without notice to the plaintiff and without affording him an opportunity to bid on or to purchase same; that the original purchasers had since resold the shares at a profit; that the defendants now owning the stock had subsequently purchased the shares with knowledge of plaintiff's claims and equities; and that they were not bona fide owners of such shares. The original sale price of the stock was ordered refunded by the Corporation to the present owners on delivery of the stock properly endorsed. The election of the two additional directors was held void. Receivership and injunctive relief was denied. The Corporation was ordered to pay plaintiff $2,758 for costs and expenses in opposing the sale of the mentioned shares of stock and the defendants were ordered to repay the amount to the Corporation. Other detailed orders were entered.

All of the defendants, except the Corporation, have appealed and now contend that the court erred in finding that the sale of the 545 shares of stock to a director and others were fraudulent and improper; (2) that the court erred in the remedy applied, to wit, in ordering recision and subsequent resale of the shares of stock; and (3) that the court erred in not allowing the Corporation's directors to be reimbursed by the Corporation for costs and expenses in defending plaintiff's claim. Appellants further stated that this appeal 'has to do only with recision of the stock sales by the trial court and with that court's further order of resale.' Respondent Johnson insists that the judgment is supported by the evidence and well within the discretion of the trial judge; that it reaches a just and proper result and should be affirmed.

Appellate jurisdiction is dependent upon the questions (or live issues) preserved in the record and presented for review upon appeal. Winslow v. Sauerwein, 365 Mo. 269, 282 S.W.2d 14, 16(2); Vannorsdel v. Thompson, Mo.Sup., 315 S.W.2d 121, 123(2, 3). This Court's jurisdiction of this appeal has not been questioned, but it is our duty sua sponte to investigate and determine that matter. While this is an appeal in an equity case and such appeal brings up the entire record for review and for hearing de novo, yet the Court will ordinarily consider only the issues actually presented on appeal. Ewing v. Kansas City, 350 Mo. 1071, 169 S.W.2d 897, 900(1); Sections 512.160 and 510.310 RSMo 1949, V.A.M.S. These issues have been stated. Our jurisdiction is first sought to be invoked on the the theory that the trial court ordered recision of the sale of 545 shares of stock of the defendant Corporation, which stock had been sold by the Corporation for $20 per share or for a total of $10,900, and that, since plaintiff-respondent (Johnson) had alleged and the trial court had found that the value of the stock was in excess of the total sale price of $10,900, the amount in dispute exceeds $7,500.

The pecuniary value of the shares of stock is not the amount 'in dispute' so as to give this Court appellate jurisdiction. It appears that the court ordered the original sale price of $20 per share refunded to the present owners who paid only $25 per share for the stock. The value of the property involved is not the basis for determining jurisdiction, but instead the amount in dispute. Juden v. Houck, Mo.Sup., 228 S.W.2d 668, 669; Superior Press Brick Co. v. City of St. Louis, Mo.Sup., 152 S.W.2d 178, 183(7-9); Powers v. Johnson, Mo.Sup., 302 S.W.2d 899, 901; Vannorsdel v. Thompson, supra, 315 S.W.2d 121, 123(2, 3).

This Court is a court of limited appellate jurisdiction, while courts of appeal have general appellate jurisdiction. Article V, Section 3, Constitution of Missouri 1945, V.A.M.S. Before this Court has appellate jurisdiction of a cause, it must affirmatively appear from the record that this Court has jurisdiction of the particular appeal. Cotton v. Iowa Mutual Liability Ins. Co., 363 Mo. 400, 251 S.W.2d 246, 249(1-5). The appellate jurisdiction of this Court must appear from the record at the time the appeal is taken. Hemphill v. Jackson, Mo.Sup., 304 S.W.2d 7, 8(3); Haley v. Horwitz, Mo.Sup., 286 S.W.2d 796, 798; Lange v. St. Louis Public Service Co., Mo.Sup., 233 S.W.2d 641(1). We determine the issue of jurisdiction by an examination of the entire record presented for review. Vordick v. Vordick, 281 Mo. 279, 219 S.W. 591, 593. 'To preserve the constitutional integrity of this court, we pierce the shell of pleadings, proof, record and judgment sufficiently far to determine that our proper jurisdiction is not infringed upon, or improper jurisdiction is not foisted upon us by mere colorable amounts.' Simmons v. Friday, 359 Mo. 812, 224 S.W.2d 90, 94(6). The 'amount in dispute,' where such is the basis of jurisdiction, as here, is the amount that actually remains in dispute between the parties on the appeal and is subject to determination by the appellate court on the basis of questions raised by the record. Lemonds v. Holmes, Mo.Sup., 229 S.W.2d 691, 692(1); Heuer v. Ulmer, Mo.Sup., 273 S.W.2d 169, 170(2); Vannorsdel v. Thompson, supra. In this case the plaintiff obtained a money judgment for $2,758 for his costs and expenses in opposing the sale of...