Moffit v. Hereford

• Decision Date: 18 February 1896
• Citation: 132 Mo. 513,34 S.W. 252
• Parties: MOFFIT v. HEREFORD.
• Court: Missouri Supreme Court

34 S.W. 252

132 Mo. 513

MOFFIT v. HEREFORD.

Supreme Court of Missouri, Division No. 1.

February 18, 1896.

CORPORATIONS — STOCK — EVIDENCE OF VALUE — REVIEW ON APPEAL.

1. Where one is to be charged for stock which has no ascertainable market value, its actual value must be taken; in determining which the value of the corporate assets, the dividends paid, the character and permanency of the business, the control of the stock, and other circumstances of like nature may be taken into consideration.

2. In determining the value of stock at the time the shares were distributed to the heirs, where such stock is not listed or on the market, a sale, during the administration, of one share, which carried with it a controlling interest in the corporation, cannot be taken as fixing the market value.

3. A sale of stock two years after the settlement of an administration, though too remote to show the market value of the shares at the time they were distributed to the heirs, is some evidence of their actual value; it appearing that the

value of the corporate assets and the annual dividends earned varied but little during the entire period.

4. In the absence of other evidence, the par value of stock will be taken as fixing its actual value.

5. In determining the value of stock in a corporation for the manufacture and sale of a proprietary article, the sale of which depends on judicious advertising and good management, and where the value of such stock, which is not listed or on the market, depends on the amount of business done, the opinion of an experienced stockbroker may be taken into consideration, though he has no personal knowledge of the stock in question.

6. An appraisement of corporate stock in the hand of an administrator by three householders appointed by such administrator is not, as between him and the distributees, the prima facie value of the stock at the time of the appraisal.

7. Where the issues were tried by the court the same rules of strictness will not be enforced on appeal as in cases where the trial was before a jury.

Appeal from St. Louis circuit court; Rudolph Hirzel, Judge.

Samuel Moffit, as guardian of the heirs of J. A. Pozzoni, deceased, filed exceptions in the probate court to the final settlement of James E. Hereford, administrator, and on appeal by the guardian to the circuit court judgment was rendered reducing the amount of a credit allowed the administrator. From this judgment the administrator appeals. Affirmed.

M. W. Huff and Thos. Thoroughman, for appellant. Orr, Christie & Bruce, for respondent.

MACFARLANE, J.

This proceeding grows out of a final settlement, filed in the probate court of the city of St. Louis, December 13, 1892, by appellant, as administrator of J. A. Pozzoni, deceased. By his final settlement the administrator asked credit for $9,000, commission on 180 shares of stock in the J. A. Pozzoni Medicated Complexion Powder Company, which he had distributed to the heirs. Samuel Moffit, as guardian of two of the heirs of deceased, objected to the allowance of this credit. The credit was allowed by the probate court, and the guardian appealed to the circuit court, where, upon a trial anew, the amount of the credit was reduced to $3,375. From that judgment the administrator appealed to this court.

Upon the trial in the circuit court the entire controversy, so far as this record shows, was over the value of these shares of stock at the time they were distributed to the heirs. The capital stock of the corporation was $20,000, divided into 200 shares of the par value of $100 per share. It was engaged in the manufacture and sale of a proprietary preparation known as "Complexion Powder." The value of the property of the corporation, its assets, did not exceed the par value of its stock. Its stock was not listed or on the market. Only two sales were shown to have been made; one during the administration, and the other about two years after the final settlement was filed. The first was of but one share, which sold for $1,000. This share carried with it the controlling interest in the company. The second sale was of eight shares at $250 per share. The net profits or dividends in 1887 was $12,800; in 1888, $35,000; in 1889, 35 per cent.; in 1890, $25,600; in 1891, $26,000; since 1891 the dividends were about 50 per cent. per annum. In December, 1891, the shares were valued by three appraisers, appointed by the administrator, at $1,000 per share. It was shown that the success of the manufacture and sale of such proprietary articles depends upon judicious advertising, good management, and constant vigilance.

1. The market value of a commodity, whether it consists of stocks in a corporation or of a more tangible property, is the price at which it commonly sells. The market value of stocks which are listed and upon the market are easily ascertained. Such value and the intrinsic or actual value often vary greatly. Stock that has no intrinsic value may bear a good price in the market, while stock that is intrinsically valuable may be, for certain causes, much depreciated in value. When one is to be charged for the value of stock, the market value should be taken, if it can be ascertained. This is determined by sales in the market at or about the time. "If no sales can be shown on the precise day, recourse may be had to sales before or after the day, and for that inquiry a reasonable range in point of time is allowable." Douglaz v. Merceles, 25 N. J. Eq. 147; Dana v. Fiedler, 12 N. Y. 40. If the stock has no ascertainable market value, then the actual or intrinsic value must be taken as the basis. This value may depend on many facts and circumstances, such as the value of the property and assets owned, the dividends paid, the character and pernancy of the business, the control of the stock, the management, the markets for articles produced if a manufacturing concern, and other facts. The evidence would necessarily take a broad range, and would properly be admissible to prove any fact calculated to affect the value. Hewitt v. Steele, 118 Mo. 474, 24 S. W. 440; Brinkerhoff-Farris Trust & Savings Co. v. Home Lumber Co., 118 Mo. 461, 24 S. W. 129; Glover v. Holliday, 109 Mo. 108, 18 S. W....