Mitchell v. St. Louis Argus Pub. Co.

• Decision Date: 22 September 1970
• Docket Number: No. 33438,33438
• Citation: 459 S.W.2d 1
• Parties: Edwina MITCHELL, J. O. Mitchell and E. C. Wright, Plaintiffs-Appellants, v. ST. LOUIS ARGUS PUBLISHING COMPANY, a Corporation, and Nanny Turner, Frank Mitchell, Sr. and David M. Grant, Defendants-Respondents.
• Court: Missouri Court of Appeals

Page 1

459 S.W.2d 1

Edwina MITCHELL, J. O. Mitchell and E. C. Wright Plaintiffs-Appellants, v. ST. LOUIS ARGUS PUBLISHING COMPANY, a Corporation, and Nanny Turner, Frank Mitchell, Sr. and David M. Grant Defendants-Respondents.

No. 33438.

St. Louis Court of Appeals, Missouri.

Sept. 22, 1970.

Rehearing Denied Oct. 19, 1970.

Victor Packman, Clayton, for plaintiffs-appellants.

David M. Grant, Joseph S. McDuffie, St. Louis, for defendants-respondents.

SMITH, Commissioner.

This matter reached us on appeal from a judgment entered in a court tried case dismissing plaintiffs' cause of action. Plaintiffs sought certain equitable relief which generally described would have placed them in control of the St. Louis Argus Publishing Company (hereinafter Argus) and ousted the individual defendants from control. Plaintiffs' right to the relief sought depends on resolution of the ownership of ten shares of stock of the Argus, all of which is claimed by defendant Frank Mitchell, Sr. and 6 2/3 shares of which is claimed by plaintiff Edwina Mitchell. The controversy over control of the Argus has led the parties, directly or indirectly, before the Supreme Court of this state on at least two prior occasions. See Turner v. Mitchell, Mo., 297 S.W.2d 458, and Land Clearance for Redevelopment Authority of City of St. Louis v. Zitko, Mo., 386 S.W.2d 69.

On May 16, 1966, the Argus had 774 shares of common stock outstanding. Excluding those in dispute, plaintiffs owned 384 shares, the individual defendants owned 380. Plaintiffs at that time made no claim to ownership of the remaining 10 shares but contended that they were not owned by Frank Mitchell, Sr. This contention was overruled by defendant Turner, chairman of the meeting, and Frank Mitchell, Sr. was permitted to vote the shares. It is unnecessary to set forth at length the matters which came before the meeting or the results of votes, for, as above seen, the outcome of the stockholder division is, and presumably will continue to be, determined by the ownership of the 10 shares in question.

These shares were originally issued to S. S. Reed in 1920, and remained his property until his death in January 1955, in Wayne County, Michigan. In due course. his widow, Annie May Reed, was appointed administratrix of his estate by the Probate Court of Wayne County. Her inventory of the estate listed these 10 shares as an asset of the estate, and her application for letters listed herself and her two children, Mary Armstead and Samuel S. Reed, Jr., as the only heirs at law. On March 27, 1956, Mrs. Reed filed her final accounting and request for distribution to the heirs at law. This accounting showed she held the 10 shares for distribution. Attached to the final account were consents to its allowance executed by the two children.

By documents dated September 27, 1956, each of the heirs (including Mrs. Reed) acknowledged receipt of 3 1/3 shares of the stock of Argus and $7,258.60 'in full and complete satisfaction of my entire interest in the residue of the personal estate of (the) deceased.' The receipt filed by Annie May Reed as an heir contained the additional notation signed by the probate judge: 'Filed this 12th day of October A.D. 1966 AND IT IS HEREBY ORDERED That Annie May Reed, administratrix of said estate, be and she is hereby discharged, her bond released and said estate closed.'

By separate assignments dated December, 1956, each of the two adult children 'For Value Received' sold, assigned and transferred to their mother their 'interest in Twenty (20) Shares of the Capital Stock of the St. Louis Argus Publishing Company, formerly owned by his (her) father, Samuel S. Reed, deceased, standing in his (her) name on the books of said St. Louis Argus Publishing Co. represented by Certificate No. 27 * * *' Each of the children's signatures was guaranteed by a banking institution. No stock certificates were ever issued by the Argus to either of the children or the mother. On January 27, 1957, the Probate Court entered its order that the residue of the estate be assigned in equal shares to the widow and two children.

In 1959, Frank Mitchell, Sr. (apparently influenced by the main characteristic of the paper's namesake) paid Mrs. Reed $1500 'in full payment for 10 shares stock of St. Louis Argus Publishing Co. issued to Reve. S. S. Reed.' In return he received certificate number 27 of the St. Louis Argus Publishing Company reflecting ownership of 10 shares of the stock in S. S. Reed. The assignment and transfer section on the back of the certificate is signed 'Annie M. Reed, Widow of S. S. Reed.' Thereafter, certificate number 21 of Argus was issued to Frank W. Mitchell, Sr. reflecting his ownership of 10 shares of Argus stock.

In January 1966, Edwina Mitchell received from the Argus a certificate for 370 shares representing her life estate interest in stock held in trust pursuant to the trust instrument discussed at length in Turner v. Mitchell, supra. That trust had terminated by its terms in January 1966, and Edwina Mitchell at that time, for the first time, achieved the absolute right to vote the stock. Following the May 16, 1966 meeting, at which time or shortly prior thereto Mrs. Mitchell says the first became aware of the Reed-Mitchell transaction, Mrs. Mitchell or her representative contacted the two Reed children. She paid each of them $500 and received from each an assignment of all their 'right, title and interest as an heir and distributee of the Estate of Samuel S. Reed, deceased * * * in and to ten shares of stock of the (Argus) * * * said ten shares being evidenced by Certificate No. 27 issued in the name of S. S. Reed.' The assignments also carried representations concerning the children's heirship and the probate of the father's estate, and warranties that each child had 'not sold nor assigned his (her) undivided interest in and to said shares of stock to anyone * * *' Certain other facts will be noted later as they become pertinent.

Plaintiffs, in the trial court and here, do not question the ownership by defendant Mitchell of 3 1/3 of the shares in dispute, those which belonged by intestate succession to Annie May Reed. The thrust of their position is that Mr. Mitchell received no valid title to the remaining 6 2/3 shares because they were never validly conveyed to Mrs. Reed.

The trial court prepared and filed a memorandum opinion in support of the judgment rendered, containing its findings on disputed issues of fact, and specifically passing on the credibility of the main witness, Mr. Leib. Plaintiffs' points on appeal are directed to particular statements of the court in the memorandum opinion. While we are not bound by the trial court's findings and have the duty and authority to consider the evidence and make our own findings, we will not set aside the judgment unless clearly erroneous and will defer to the trial court's specific findings here to credibility. Turner v. Mitchell, supra.

The main question presented to us is whether the assignments from the children to Annie Reed validly transferred the children's interest to her. If they did, then the children had no interest to convey to Mrs. Mitchell in 1966. Plaintiffs' attack on these assignments presents several theories. Initially, it is contended that the assignments lack validity because at the time they were made, no order had been entered by the Probate Court directing distribution to the heirs and title to the stock was still in the administratrix. It is quite true, as plaintiffs contend, that under Michigan law legal title to the personal property of a decedent is vested in the personal representative and not in the heirs. Michigan Trust Co. v. City of Grand Rapids, 262 Mich. 547, 247 N.W. 744. The question here presented is whether that legal title can be transferred, under Michigan law, prior to the court's order of distribution of the estate. Under the facts here, the answer is yes. At the time the assignments were made all debts of the estate had been paid, a final account had been rendered, and receipts for distribution had been received from the children by the administratrix. The Michigan Supreme Court has held that where the debts properly filed have been paid, the final account of the administrator has been rendered and distribution to the heirs has been made prior to entry of an order directing such distribution, that distribution is valid, permissible and transfers legal title to the personal property to the heirs. Brown v. Forsche, 43 Mich. 492, 5 N.W. 1011.

Here the only three heirs to the estate of S. S. Reed agreed to and accepted, before the assignments, their respective shares in the estate. None of the three is attacking that distribution nor raising any question about the handling of the probate estate. Upon the distribution of the assets of the estate to the respective heirs those assets became the property of the heirs and could be transferred or assigned by them. Because no actual division of the stock between the three heirs occurred does not preclude the right of the heirs to assign it between themselves. Voluntary family agreements as to distribution of a decedent's estate are valid and enforceable in Michigan. See Brown v. Forsche, supra. It is apparent that the heirs here agreed that Mrs. Reed was to receive the Argus stock, which agreement was effectuated by acknowledgment of receipt and assignment shortly thereafter.

Plaintiffs also contend that the assignments were without legal consequence because not in accord with Section 403.050 of the Uniform Stock Transfer Act in effect in Missouri in 1956, or Section 400.8--309 of the Uniform Commercial Code in effect in Michigan, California and Massachusetts (the latter two where the assignments were executed) in 1956.

There was only one certificate in existence relating to these ten shares of stock at the time the assignments were made. That certificate was in the possession of the widow. The children executed...