Louisiana Purchase Exposition Co. v. Kuenzel

• Decision Date: 01 November 1904
• Citation: 108 Mo. App. 105,82 S.W. 1099
• Parties: LOUISIANA PURCHASE EXPOSITION CO. v. KUENZEL.
• Court: Missouri Court of Appeals

82 S.W. 1099

108 Mo. App. 105

LOUISIANA PURCHASE EXPOSITION CO. v. KUENZEL.

St. Louis Court of Appeals. Missouri.

November 1, 1904.

CORPORATIONS — STOCK SUBSCRIPTIONS — CONDITIONS PRECEDENT — COMPLIANCE — ACTS OF INCORPORATORS — REVIEW — CONTENTS OF BOOKS — SECONDARY EVIDENCE.

1. Laws 1899, p. 130, providing for the incorporation of an organization to conduct the Louisiana Purchase Exposition, provided that the articles of agreement should declare the number of shares of stock; that not less than one-half of the entire amount had been subscribed, and 10 per cent. of the amount subscribed actually paid, and in the possession of the directory, or disbursed for preliminary expenses; and section 3, p. 131, provided that the stock should not fall below $500,000 or exceed $20,000,000. The association agreement responded to the requisites of the act, on which the State Secretary issued a certificate of incorporation to plaintiff. Held, that the duty of determining as an existing fact, the true amount of the capital stock subscription, was imposed on the original incorporators, and their decision that such amount had been subscribed before applying for a charter was conclusive, in an action on a subscription, in the absence of fraud.

2. Where, in an action on a subscription to the stock of the Louisiana Purchase Exposition, defendant did not demand that plaintiff's subscription books and accounts should be produced in court, and defendant's counsel had declined an opportunity to examine the same, on account of the magnitude of the undertaking and the poor facilities at hand, plaintiff was entitled to prove by a witness the general result of his examination of such subscription books and accounts, without producing them.

Appeal from St. Louis Circuit Court; Moses L. Sale, Judge.

Action by the Louisiana Purchase Exposition Company against Andrew Kuenzel. From a judgment in favor of plaintiff, defendant appeals. Affirmed.

Rassieur & Buder, for appellant. Franklin Ferriss and Rowell & Zumbalen, for respondent.

REYBURN, J.

This proceeding was instituted by plaintiff against the defendant, as a delinquent subscriber, for the enforcement of his subscription to its capital stock. The petition narrated that, with many others, appellant united in subscribing a written agreement to become a stockholder for an enumerated number of shares in a corporation to be organized to solemnize the one hundredth anniversary of the Louisiana purchase, upon condition that such subscription should not become obligatory until the full amount of $5,000,000 should have been subscribed, and agreeing to make payment for such subscription in manner detailed; that the total of the requisite and named amount was duly subscribed, the proposed corporation organized, and all steps adopted required by law for the incorporation of such company; that it had accepted such subscription of defendant, and, relying upon the subscription of defendant and his associates, it had proceeded to obligate itself for and expend large sums of money in its organization, construction of buildings, and other preparations for a world's fair in the city of St. Louis. Continuing, the petition charged the making of the various calls upon the subscribers to its stock in manner provided by such subscription instrument, and notice thereof to appellant; that he had paid the first installment of 10 per cent., but had defaulted in subsequent calls, and judgment therefor was asked. The answer admitted the execution of the subscription, but, making denial of all other allegations of the petition, by way of affirmative defense averred that the amount of $5,000,000, essential to render defendant's subscription binding, never was subscribed, but that the aggregate subscriptions fell short of such amount. A jury was waived, and the trial before the court terminated upon the close of the evidence offered by the plaintiff; the defendant tendering no proof, but proffering a demurrer to the evidence, which was overruled; and a finding and judgment were had in favor of plaintiff.

1. The initial contention of appellant is that his agreement to become a subscriber to plaintiff's stock was not absolute and unqualified, but was conditional and dependent, and the burden devolved upon plaintiff to establish by competent legal proof due compliance with the antecedent conditions before recovery was warranted, and that it had failed to demonstrate such performance by legal evidence. The first section of the legislative act, general in character, but special in its practical application and employment, being an act of the fortieth General Assembly of the state of Missouri, under which, together with subsequent amendatory acts not material herein, the plaintiff was brought into legal existence, April, 1901, and' denominated "World's Fairs and Centennial Expositions" (Laws 1899, p. 130), and adopted to commemorate and solemnize the centennial anniversary of the Louisiana purchase by holding a world's fair at the city of St. Louis, in defining the recitals to be set forth in the articles of agreement for the legal creation of a corporation to be invested with the powers and authority of such legislative act and for the purposes enumerated in section 6, especially the inauguration and maintaining of national, international, and world's fairs, centennial and other expositions, commemorative of any historical event, or for the promotion and encouragement of the arts, sciences, professions, and industries by the exhibition of products of the arts, industries, and manufactures, and of soil, land and sea, prescribed that the amount of the capital stock of the corporation and the number of shares, of a minimum par value of $10 and maximum of $100 per share, and that not less than one-half of the entire amount thereof had been subscribed in good faith, and 10 per centum of the amount subscribed was actually paid up in lawful money of the United States and was in possession of the directory or had been disbursed for preliminary expenses of organization, should be set forth; and section 3 provided that the stock of such corporation should not fall below $500,000 nor exceed $20,000,000, reiterating that at least one-half of the capital stock should be subscribed for in good faith, and no less than 10 per centum paid up, at the time of filing the articles, the remaining 90 per cent. to be subject to the call of the board of directory in such sums and at such times as might be agreed upon by the subscribers in the association articles. The instrument of association, introduced at the hearing, responded to the requisites of the act in question by embracing provisions and recitals that the authorized amount of the capital stock should be $6,000,000, divided into 600,000 shares of the par value of $10, $5,000,000 of which capital stock had been subscribed in good faith, and that 10 per cent. of the amount subscribed was either in the custody of the first board of directors, or had been appropriated to expenses of organization; and upon the faith of such instrument embodying all other statements and specifications made requisite by the act, after its execution by an appropriate number of subscribers, recording, and like formal steps, the certificate of incorporation issued from the office of the State Secretary, and, after recording the latter, the legal creation of the plaintiff was perfected.

The evidence received, presently further considered, being the testimony of a witness familiar and intrusted with the subscription lists and original subscriptions, which had been preserved and transferred under his individual directions, by him personally verified and compared, and the aggregate amounts computed, established that the subscription lists, accounts, and books were bulky and voluminous, comprehending over 23,000 individual subscriptions, appearing...