Kubatzky v. Ramada Inns, Inc., 43785
| Decision Date | 30 March 1982 |
| Docket Number | No. 43785,43785 |
| Citation | 632 S.W.2d 73 |
| Parties | Karla Rai KUBATZKY and Linda Lee Kubatzky, Plaintiffs-Appellants, v. RAMADA INNS, INC., Harry G. Neill, Jr., and Patrick K. Warner, Defendants-Respondents. |
| Court | Missouri Court of Appeals |
Juan D. Keller, St. Louis, for plaintiffs-appellants.
Richard Wolff, Clayton, Andrew G. Neill, St. Louis, for defendants-respondents.
Plaintiffs-appellants were minors holding shares of stock of a closely held corporation which defendant-respondent Ramada Inns, Inc. acquired. Plaintiffs appeal from a trial court judgment absolving Ramada Inns from liability for permitting an allegedly unauthorized transfer of plaintiffs' stocks by their father. They do not appeal the trial court's finding of nonliability on the part of defendants Neill and Warner, the purchasers of the stock. We affirm.
The facts of the case have been submitted to us through the trial court's findings of fact and the legal file.
Karla Rai Kubatzky and Linda Lee Kubatzky, daughters of Theodore Kubatzky, were each issued 1,000 shares of Lee-Rai Corporation on February 8, 1961, when they were approximately 12 and 8 years of age. The certificates indicating ownership of these shares were issued in the individual names of the minor girls. Their father, Theodore Kubatzky, was then the principal shareholder 1 and president of Lee-Rai and remained so until March, 1965.
At that time Kubatzky transferred his shares of Lee-Rai, along with his daughters' shares, to defendants Neill and Warner. Sometime before the father presented the daughters' certificates to Neill and Warner for transfer, they had been altered to indicate that they were owned by "Theodore O. Kubatzky, Trustee-Karla Rai Kubatzky" and, "Theodore O. Kubatzky, Trustee-Linda Lee Kubatzky." To accomplish the transfer, Kubatzky endorsed his daughters' certificates in his name as "trustee for" Karla and Linda and delivered them to Neill and Warner. In the written agreement between him and Neill and Warner, Kubatzky agreed that the certificates issued in his minor daughters' names would bear their individual endorsements and that he would indemnify the purchasers if in the future the daughters voided the sale and demanded return of the stock. The father received full consideration for the sale of stock with his daughters apparently receiving nothing.
Subsequent to the sale, Lee-Rai issued new certificates in the names of Neill and Warner. Neill became a director and secretary of the corporation, and Warner became its president. In 1968 the stockholders of Lee-Rai transferred all outstanding shares of Lee-Rai to Ramada Inns in an exchange of stock. Lee-Rai subsequently merged into Ramada Inns, which was the survivor corporation.
Plaintiffs' suit against Neill and Warner was based on the premise that the girls' stock had been purchased with notice that the transfer was unauthorized and in fraud of their rights. Further, it was alleged that the transaction constituted an unlawful conversion of the stock certificates and a breach by Neill and Warner of their fiduciary duty as officers and directors of Lee-Rai. Plaintiffs also brought action against Lee-Rai, subsequently substituting Ramada Inns as the successor corporation, on the ground that the corporation was liable for the alleged misdeeds of its officers and directors. Suit was not brought against the father; his whereabouts were unknown.
The trial court held against plaintiffs and in so doing found that the Lee-Rai Corporation "stock book stubs were in such a state of disarray that they did not put anyone on notice as to the true nature of the ownership of the stock."
Plaintiffs appeal that portion of the trial court judgment finding no liability on the part of the corporation. They maintain that the finding that the stocks were issued in the plaintiffs' names alone dictates the conclusion that the corporation violated sections 403.030-.050, RSMo 1959, of the Uniform Stock Transfer Law, in effect at the time of transfer of plaintiffs' stocks, by permitting their transfer on the sole endorsement of the father. They contend further that the corporation violated section 403.280, RSMo 1959, by not requiring evidence of the father's appointment as trustee when he requested transfer of plaintiffs' certificates as their alleged trustee. 2
The Uniform Stock Transfer Law, sections 403.010-.240, RSMo 1959, governed stock transfers at the time of transfer of plaintiffs' stocks. 3 Section 403.050 provides that the transfer of title to a certificate and the shares it represents is permissible only where the certificate itself or a separate document directing assignment of the certificate is endorsed by either the person who appears by the certificate to be the owner or by a person authorized by law to transfer the certificates for the owner, such as the owner's executor, guardian or administrator. Section 403.030 defines "the person appearing by the certificate to be the owner thereof" as "(t)he person to whom a certificate was originally issued."
Since the trial court specifically found that "the original certificates were issued in the individual names of the minor children," it follows that plaintiffs must be "the persons appearing by the certificates to be the owners." See also Kaiser v. Moulton, 631 S.W.2d 44 (Mo.App.E.D.1981); Pederson v. Brantner, 503 S.W.2d 25, 27 (Mo.App.1973); Vandivort v. Dodds Truck Line, Inc., 444 S.W.2d 229, 230 n.1 (Mo.App.1969), holding that a stock certificate is a muniment of title to shares of stock. Hence, an endorsement on an appropriate document by either plaintiffs or by a person legally authorized to sell their stock was a prerequisite to a lawful transfer of the stock. As plaintiffs' certificates were endorsed only by their father "as trustee" we must determine whether he possessed lawful authority to assign their stocks.
There are two potential sources of Kubatzky's authority to transfer plaintiffs' stocks-as their "trustee" or as their father and natural guardian. We need only consider the latter ground of his purported authority.
As a general rule, a minor child may acquire and own property in his or her name alone, and a parent lacks authority to sell the minor child's interest in property except as provided by law. Nilges v. Nilges, 610 S.W.2d 58, 61 (Mo.App.1980); In re Scott K, 24 Cal.3d 395, 595 P.2d 105, 111, 155 Cal.Rptr. 671, cert. denied, 444 U.S. 973, 100 S.Ct. 468, 62 L.Ed.2d 388 (1979). See Gross v. Gross, 625 S.W.2d 655, 662 (Mo.App.1981) (...
To continue reading
Request your trial
-
State v. Davis
...such could exercise a degree of control over his children and their property. See generally § 475.025, RSMo 1986; Kubatzky v. Ramada Inns, Inc., 632 S.W.2d 73 (Mo.App.1982). From this the jury could reasonably infer that defendant believed he would benefit financially by disposing of Susan ......