Keystone Bridge Co. v. McCluney

• Decision Date: 30 March 1880
• Citation: 8 Mo.App. 496
• Parties: KEYSTONE BRIDGE COMPANY, Respondent, v. JOHN H. MCCLUNEY, Appellant.
• Court: Missouri Court of Appeals

8 Mo.App. 496

KEYSTONE BRIDGE COMPANY, Respondent,

v.JOHN H. MCCLUNEY, Appellant.

St. Louis Court of Appeals, Missouri.

Mar. 30, 1880.

1. An innocent purchaser of stock, taken in good faith as paid up, in the absence of anything to put him upon inquiry, and where the books of the corporation would give no notice that the stock was not paid up, is not liable to the creditors of the corporation for the amount unpaid.

2. In order that shares o stock in the usual form should be regarded as paid up, in the hands of an innocent purchaser, it is not necessary that they should express upon their face that they are fully paid.

APPEAL from the St. Louis Circuit Court.

Reversed and remanded.

GLOVER & SHEPLEY, for the appellant: The transferee of the shares of stock is not liable for unpaid subscriptions on the shares purchased by him, unless he has agreed to pay them either expressly or by implication.-- Webster v. Upton, 91 U. S. 65; Sanger v. Upton, 81 U. S. 56; Seymour v. Sturgis, 26 N. Y. 134; Williams' Case, L. R. 1 Ch. Div. 576; Shackelford's Case, L. R. 1 Ch. Div. 567; Mallorie's Case, L. R. 2 Ch. 181; Foreman v. Bigelow, 7 Cent. L. J. 430; Burkinshaw v. Nicholls, 3 H. L. Cas. 1004.

J. H. WIETING, with whom are I. C. TERRY, and BROADHEAD, SLAYBACK & HAEUSSLER, for the respondent: The person appearing on the books of the corporation as the owner of stock is liable to a creditor of the corporation for the amount unpaid thereon.-- McClaren v. Franciscus, 43 Mo. 452; White v. Salisbury, 33 Mo. 150; Fine v. Hornsby, 2 Mo. App. 61; A. Wight Co. v. Steinkemeyer, 6 Mo. App. 575.

BAKEWELL, J., delivered the opinion of the court.

This is a proceeding, under the statute, by an execution creditor of the Illinois and St. Louis Bridge Company against McCluney as holder of one hundred and forty shares of stock of the Bridge Company on which fifty per cent is not paid up. The judgment against the company is for $46,831, and was rendered in January, 1878. Notice of the application to the Circuit Court for execution against McCluney, on the ground that he was a stockholder on the return-day of the execution, was served in the following May. The facts under which the creditors of the company hold the stockholders liable are fully set forth in Skrainka v. Allen, 7 Mo. App. 434. Under our ruling in that case, and in the case of Keystone Bridge Company v. Barstow, submitted with the case at bar, it results from the facts in evidence in the present case that of the one hundred and forty shares of stock in the Bridge Company standing in the name of McCluney on the books of the company there was unpaid twenty-five per cent, being the par value of the second-mortgage bonds received by the former owner of the stock on paying his subscription. Besides this, as to 12 8/11 of these one hundred and forty shares, $40 a share was unpaid; because these particular shares were a portion of eleven hundred shares owned originally by McPherson, who received one hundred shares of the whole number as bonus shares from the company. All the bonus stock was unpaid as to forty per cent. But the bonus shares were so mingled with the others that it is impossible to say of any particular share whether or not it is bonus. It was therefore assumed that each certificate included a percentage of bonus stock. It is unnecessary to repeat the statement made in Skrainka v. Allen. Reference is made to the opinion in that case for the facts on which it is held that this stock is unpaid stock to the extent stated above. The eleven hundred shares owned by McPherson passed by his will to his executors and trustees, Shepley and Parsons. One Wuerpel, the managing officer of a bank (both the bank and Wuerpel being then of good reputation in the business world), wished to purchase of the McPherson estate two hundred of these shares. In order to effectuate that sale, the trustees of the estate surrendered their two certificates for one thousand shares and one hundred shares, and received in exchange from the company eleven certificates for one hundred shares each. Wuerpel purchased two of these certificates on October 12, 1874, at $34 a share. He wanted to pay by a draft on London; but Parsons and Wuerpel could not agree as to the terms on which the draft should be discounted. To facilitate matters in regard to the draft, Wuerpel desired that the two certificates should be divided into twenty certificates of ten shares each. The certificates were therefore, by Parsons and Shepley, assigned to McCluney, who was an employee of Wuerpel's bank. McCluney thereupon surrendered these certificates to the Bridge Company, and took in exchange twenty certificates of ten shares each. Those shares were assigned by McCluney to Wuerpel, and attached to the draft on London. The shares have ever since stood on the books of the company in McCluney's name.

The question presented in this case is whether, in favor of a judgment creditor of the company, these shares are to be held as partially unpaid as against McCluney, who confessedly had no actual notice that they were not fully paid up shares. That they should be treated as unpaid as to the bonus stock and as to the amount received for the second-mortgage bonds whilst th...