Meramec Trust Company, a Corp. v. Johnson
| Decision Date | 21 February 1927 |
| Citation | 293 S.W. 517,220 Mo.App. 686 |
| Parties | MERAMEC TRUST COMPANY, A CORPORATION, RESPONDENT, v. JANE CHESTER JOHNSON, EXECUTRIX OF THE LAST WILL AND TESTAMENT OF S. H. JOHNSON, DECEASED, APPELLANT. |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of the City of St. Louis.--Hon William H. Killoren, Judge.
AFFIRMED.
Judgment affirmed.
Jones Hocker, Sullivan & Angert for appellant.
(1) As indorser, the defendant was entitled to notice of demand and dishonor. Such notice was a condition precedent to his liability, and the evidence wholly failing to show such demand and notice, the demurrer to the evidence should have been sustained. 8 C. J. 637-639; Rockfield v. Bank, 83 N. E. (Ohio St.) 392; Napper v. Blank, 54 Mo 131; Vogel v. Starr, 132 Mo.App. 430; Westbay v. Stone, 112 Mo.App. 411. While it is true that the rights of all parties are fixed as of the date of insolvency, yet the Commissioner of Finance, like an assignee or receiver, merely steps into the shoes of the insolvent bank or trust company. He has no greater rights than the corporation or creditors would have, and the defendant is entitled to the same rights as he would have had in the absence of insolvency: 32 C. J. 841-843; Jacobi v. Jacobi, 101 Mo. 507; Midland Nat. Bank v. Brightwell, 148 Mo. 358; Homer v. National Bank of Commerce, 140 Mo. 225; Van Frank v. Walther, 84 Mo.App. 472. (2) There is no statute or provision of the Constitution of this State which requires a certificate of stock to be transferred upon the books of the company in order to relieve the stockholder from liability to creditors, and no by-law was shown in evidence making such transfer necessary. The sale and endorsement of the certificate of stock by the defendant in good faith to H. F. Reis effectually passed the title to the stock and the defendant thereafter ceased to be a stockholder in the Trust Company. 14 C. J. 1025; Dain Mfg. Co. v. Seed Co., 95 Mo.App. 146; Wilson v. Railroad, 108 Mo. 588; Crenshaw v. Mining Co., 110 Mo.App. 365; Kahn v. Bank, 70 Mo. 262; Moore v. Bank, 52 Mo. 377; McClaren v. Franciscus, 43 Mo. 452; Kretzer v. Cole Bros., 181 S.W. 1066. (3) Irrespective of all other questions in the case, the demurrer to the evidence should have been sustained because the uncontradicted evidence and the admissions in the record show that the fact that the defendant had sold his stock to H. F. Reis was known to the Trust Company. The president and secretary were the officers whose duty it was, if a transfer were necessary and proper, to make such transfer on the books of the company. Since the company knew of such transfer, it must be deemed to have acquiesced therein. Mining Co. v. Taylor, 247 Mo. 23; Mining & Smelting Co. v. Clayton, 233 S.W. 215; 14A C. J. 484, 488; Griffith v. Royal Arcanum, 182 Mo.App. 656. While it may be contended that the knowledge of the president and secretary in this case cannot be imputed to the Trust Company for the reason that their knowledge came to them in connection with their purchase of the shares in question, that rule cannot apply in this case because (a) they had no adverse interest in the matter to conserve by not conveying such information to the directors, and (b) such rule cannot apply where the knowledge is communicated to the very officers whose duty it is to see that the transfers are made on the books of the company. Citizens Trust Co. v. Coppage, 227 S.W. 1059; Magee on Banks & Banking (3 Ed.), p. 122, sec. 108; Cragie v. Hadley, 99 N.Y. 131; Smith v. Board, etc., Co., 38 Conn. 208; Merchants' Nat'l. Bank v. Marden, Orth & Hastings, 125 N.E. 384; Bridge Co. v. Light & Power Co., 268 S.W. 408; 14A C. J. 484, 488. Since its officers, and therefore the plaintiff, had the notice of sale, and also had possession of the certificate of stock with power of attorney to transfer, the plaintiff cannot be heard to maintain that the stock should have been transferred on the books. Whitney v. Butler, 118 U.S. 655; Shoe Co. v. Morris, 182 S.W. 225; Bracken v. Nicol, 199 S.W. 920; Foster v. Row, 79 N.W. 696; Hunt v. Seeger, 98 N.W. 91; Chem. Nat. Bank v. Colwell, 132 N.Y. 250; Isham v. Buckingham, 49 N.Y. 216. (4) Since the instructions given on the part of the plaintiff ignored the principles of law applicable to the case, and since the court refused defendant's instructions C and E, setting forth the conditions of defendant's liability as indorser, reversible error was committed. Authorities, supra.
Hope & Hope for respondent.
The Meramec Trust Company by authority and for the use of E. H. Benoist, special deputy finance commissioner of the State of Missouri, recovered judgment against the defendant, S. H. Johnson, for the balance due on the subscription price of thirty shares of the said trust company stock alleged to be owned by the defendant. The defendant brings this appeal. Whilst the appeal was pending here the death of the appellant has been suggested and by consent the cause revived in the name of Jane Chester Johnson, executrix of the last will and testament of S. H. Johnson, deceased.
The Meramec Trust Company was incorporated in 1913 with an authorized capital stock of $ 100,000, subscribed for to the full amount thereof, but with only fifty per cent thereof paid in. Shortly thereafter the defendant, Johnson, purchased from one of the original subscribers thirty shares of the capital stock of the trust company and a new certificate for said thirty shares was duly made out and issued to him and his ownership thereof duly registered in the books of the trust company, and remained thus registered in defendant Johnson's name up to the trial of the case below.
In October, 1919, the bank commissioner of the State of Missouri took charge of the trust company for the purpose of liquidating the same and paying the claims of depositors and other creditors thereof, and appointed E. H. Benoist as his special deputy in charge. In conformity with the request of the special deputy the board of directors of the trust company, at a meeting on June 28, 1920, passed a resolution calling for the unpaid fifty per cent capital stock of the company. Notice of such call was duly published in a daily newspaper in the city of St. Louis, and also notice of such call was given the defendant Johnson, and the other stockholders of record, in writing by the said special deputy in charge of the trust company in the early part of July, 1920.
It is conceded that the defendant Johnson did in fact, on May 23, 1918, through Halliday & Company, a firm of brokers, sell his thirty shares of stock in the trust company to H. F. Reis, and that his certificate of stock duly endorsed by him was delivered at or about that time through said brokers to Reis but that this stock certificate was never surrendered to the Meramec Trust Company and never reissued in the name of Reis, and that the sale or transfer was never made a matter of record on the stock certificate register of the trust company; that the said Reis, at the time of the purchase of the stock by him from Johnson, was the president of the trust company, "but that in his purchase of these shares of stock Mr. Reis was acting in his individual capacity; bought the stock as an individual and was not acting as president of the Meramec Trust Company or buying it in his capacity as such president." Reis, who was president from the incorporation of the trust company, continued so up until a month or six weeks before the bank was taken over by the finance commissioner. At the time Reis resigned the presidency of the company he sold all of his shares of stock in the trust company, including those he had purchase from Johnson, to J. G. Lowe the then secretary of the trust company, and according to Reis' testimony he gave his certificate of stock to his son with instructions to deliver them to Mr. Lowe.
So far as the record before us discloses no request was made by Johnson's brokers on delivery of the stock to Reis, that he have the certificate cancelled and a new certificate issued in his name; and furthermore defendant Johnson did not at any time thereafter make any investigation or inquiry as to whether his certificate had been cancelled and a new one issued in lieu thereof though the certificate of stock on its face contained the statement that the stock was but fifty per cent paid up, and that the shares were, "transferable only on the books of this corporation in person or by attorney upon the surrender of this certificate properly endorsed." And according to Reis' own testimony, when he made his sale of the said thirty shares of stock to Lowe, he made no request that the Johnson certificate be cancelled and a new one issued to Lowe therefor. Reis testified, however, that at a board of directors' meeting in July, 1919, when the question of his resignation as president and director of the bank came up, he told the directors that he had an opportunity to sell his stock but that as he was one of the original incorporators he did not want to resign,
Analyzing Reis' statement to the board, it clearly appears therefrom that he had not in point of fact at the time...
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