"It appears that, in and prior to 1864, George Knapp, Nathaniel Paschall, and John Knapp were equal copartners under the firm name of George Knapp & Co., engaged in the business of newspaper, book, and job printing, and well known as publishers of the Missouri Republican, in St. Louis. That in April of that year these members of said firm, in conformity with the provisions of the Missouri act of February 15, 1864, for organizing business companies, formed a corporation, in the firm name of George Knapp & Co., to engage in substantially the same business as the firm had conducted. The capital stock of the corporation was fixed at $300,000, with the privilege of increasing it up to $500,000, divided into shares of $100 each; the business to be managed by a board of directors, who for the first year were to consist of the three incorporators. The by-laws of this corporation provided for a president, an editor, a secretary, and a treasurer, and on the 15th of April, 1864, the board elected those officers, — George Knapp, preisdent; Nathaniel Paschall, editor; and John Knapp, secretary and treasurer. On the same day the corporation, then organized, purchased of the said firm of George Knapp & Co., and the latter transferred to the corporation, the Missouri Republican newspaper and job office and book bindery, and the Republican building and grounds on Chestnut street, `and all the stock and fixtures, together with the debts due George Knapp & Co., now on the books of said firm of George Knapp & Co., except what is known as stock, Charlevoix property, and real estate, independent of the Republican building above.' For this property the corporation agreed to pay all the debts of the firm, and also the sum of $358,267.44. Of this purchase price, $300,000 was presently paid in the capital stock of the corporation, as follows: $100,000 to George Knapp, $100,000 to Nathaniel Paschall, and $100,000 to John Knapp; and these members of the firm gave the corporation their several receipts as for so much money on account of their interest in the Republican establishment, and were credited with capital stock to that amount on the books of the corporation, but no certificates were issued of the stock at this time. The balance of $58,267.44 of the purchase price was passed to the credit of the members of the firm on the books of the corporation, to be paid as they might desire, as follows: To George Knapp, $6,413.35; to Nathaniel Paschall, $22,254.11; and to John Knapp, $29,599.98. Notwithstanding these transactions, the copartnership of George Knapp & Co. was not now dissolved, but was continued on account of its interests outside of the interests of its members in the corporation, and its business was afterwards transacted by the same management and `clerical force' as conducted the corporation, and practically its transactions were carried into the corporation, as a depositary or agent to receive and pay out the moneys of the firm, and the amount of the business of the firm, including occasional entries of undivided profits of the corporate business, were kept on the books of the corporation in the name of the `Old Firm,' that being the name by which the firm of George Knapp & Co. was known in its dealings with the corporation. The business of the corporation itself was conducted as first organized, without change of officers or directors, until the death of Nathaniel Paschall, in December, 1866, whereupon, at a meeting of the board held January 7th, Henry G. Paschall, who was administrator of the estate of his father, said Nathaniel, was elected a director in his place. Subsequently, on the 4th day of February, 1867, the office of editor was abolished, and Henry G. Paschall was elected as secretary in the place of John Knapp, who resigned that office. At a meeting of the board as last constituted, held January 6, 1868, the following resolutions were adopted: `Whereas, it is considered necessary, in order to secure the services of new parties in the working department of the corporation of George Knapp & Co., to increase the capital stock of the company from three hundred thousand dollars to five hundred thousand dollars: therefore be it resolved that the capital stock of George Knapp & Co. be increased to five hundred thousand dollars, and that disposition of said increase be made as follows: Fifty thousand dollars to George Knapp; fifty thousand
dollars to estate of Nath. Paschall; fifty thousand dollars to John Knapp; and fifty thousand dollars to be placed to the credit of the "Old Firm," to be disposed of as thought proper by the present directors of the company; and, when disposition is made of any portion of said stock, the same to be specially noted in the records of the proceedings at the next meeting of the board of directors.' This increase was based on the original property of the corporation, and its increased value up to this time, and in the proportions and amounts stated in their resolutions, was credited to the several parties therein mentioned, in their accounts with the corporation kept on the ledger, and also in the book containing the records of the meetings of the board of directors; and the evidence tends to show that these credits were entered at the time the stock was increased. Following out the purpose indicated in the resolutions to secure the services of new parties in the working department of the company, the board of directors now arranged with William Hyde for the transfer to him of 200 shares of this increase of capital stock that had been credited to the `Old Firm.' The transaction is set out in the record of the meeting of the board held February 3, 1868, as follows: `In accordance with the authority conferred by resolution adopted January 6, 1868, the undersigned directors have disposed of two hundred shares of the stock of George Knapp & Co. to William Hyde, upon the following terms and conditions, which are to be transferred to him when the stock is fully paid up, according to the terms and conditions, as follows: When the dividends on the two hundred shares and the semiannual credits, seven hundred and fifty dollars, and such other sums as he may from time to time pay, shall amount to ten thousand dollars, in addition to the interest at the rate of six per cent. per annum on ten thousand dollars of said stock, then two hundred shares, being twenty thousand dollars of the stock of said company, shall be transferred to him. It is understood that ten thousand dollars of said stock is presented to said William Hyde in consideration and as an inducement that he will give his undivided personal attention to the interest of the establishment, independent of the consideration of his salary. George Knapp. John Knapp. Henry G. Paschall.'
"As this was the only instance in which the stock of the `Old Firm' was disposed of for the purpose mentioned in the resolutions of January 6, 1868, it is proper to notice the way it is carried out. An account was opened with William Hyde, in which he was debited with $10,000 for the two hundred shares. This account was ultimately closed in the manner agreed upon, and a certificate issued for stock. By an entry in the ledger of the corporation under date of February 1, 1868, the `Old Firm' is credited, `by Wm. Hyde, $10,000'; and by a subsequent entry, under date of July 1, 1868, the `Old Firm' is credited, `By contingent, $10,000.' The evidence tends to show that these entries were payments by the corporation to the `Old Firm' for the aforesaid 200 shares transferred to William Hyde. In the course of the business of the corporation, dividends were from time to time passed to the credit of the stockholders. These dividends, in two or three instances, were declared...
