Mountain Grove Creamery, P. & P. Co. v. Willow Springs C. Co.

• Decision Date: 20 April 1918
• Docket Number: No. 2156.,2156.
• Citation: 202 S.W. 1054
• Court: Missouri Court of Appeals
• Parties: MOUNTAIN GROVE CREAMERY, POULTRY & PRODUCE CO. v. WILLOW SPRINGS CREAMERY CO. et al. (GREEN HILLS CREAMERY CO., Intervener).

202 S.W. 1054

MOUNTAIN GROVE CREAMERY, POULTRY & PRODUCE CO. v. WILLOW SPRINGS CREAMERY CO. et al. (GREEN HILLS CREAMERY CO., Intervener).

No. 2156.

Springfield Court of Appeals, Missouri.

April 20, 1918.

Appeal from Circuit Court, Howell County; E. P. Dorris, Judge.

Suit by the Mountain Grove Creamery, Poultry & Produce Company against L. N. Moore and the Willow Springs Creamery Company and others, wherein the Green Hills Creamery Company intervened. Decree for plaintiff against the defendants, and for intervener against Moore, and plaintiff and Moore appeal. Decree as to Moore affirmed, and as to intervener reversed and remanded, with directions to dismiss.

W. N. Evans and H. D. Green, both of West Plains, and V. O. Coltrane, of Springfield, for plaintiff. J. N. Burroughs, of West Plains, J. C. Dyott, of Willow Springs, and Neville & Gorman, of Springfield, for defendants. Seth V. Conrad, of Marshfield, and Hamlin & Hamlin, of Springfield, for intervener.

BRADLEY, J.

Plaintiff, a corporation with principal office at Mountain Grove in Wright county, Mo., on January 19, 1917, filed with the clerk of the circuit court of Howell county its bill in equity returnable to the March term, seeking to enjoin defendants and their agents from using certain property at Willow Springs in the incorporation of the "Willow Springs Creamery Company," which property plaintiff claimed to own, and for other relief. Service was duly had and answers filed, and the cause came on for trial April 6th. On April 6th the Green Hills Creamery Company, a corporation of Willow Springs in Howell county, with leave of court, was made a party defendant, and filed what is designated as an intervening petition praying that a certain lease it had given to defendant Moore be canceled. Plaintiff filed reply to the intervening petition, and both prongs were tried together. Upon the trial the court made its temporary injunction, theretofore issued, perpetual, enjoining Moore and others from using the property set out in plaintiff's bill in the incorporation of the proposed Willow Springs Creamery Company, and decreed that the lease from the Green Hills Creamery Company to Moore was obtained by Moore for the use and benefit of plaintiff, canceled the lease from it to Moore. Plaintiff appealed from the action of the court canceling the lease; Moore appealed from the action of the court in enjoining him and others from using the property mentioned in the incorporation of the Willow Springs Creamery Company. These cross-appeals have been prosecuted as though they were separate, and have been docketed separately here.

On November 10, 1914, defendant Moore was secretary of plaintiff, and resided at Mountain Grove. On that date the plaintiff at a meeting of its board of directors directed that Moore see what could be done towards leasing the Green Hills Creamery Company plant at Willow Springs. Moore kept the minutes of this meeting and signed them as secretary, and at this time and afterwards throughout 1915 and 1916 was in the employ of plaintiff, drawing a stated monthly salary. Moore made two or three trips from Mountain Grove to Willow Springs and other places to see about securing the lease, his expense being paid by plaintiff; but the Green Hills Creamery Company would not lease to plaintiff, but was willing to lease to Moore. This company had lost about $8,000 in the creamery business, and had its plant mortgaged for $5,000, and the due date of the mortgage debt was approaching. Moore reported back to plaintiff that he could not secure the lease to it, and he was thereupon instructed to use his own judgment about how he secured the lease. Finally Moore succeeded in obtaining a temporary lease direct to himself dated December 17, 1914, expiring April 20, 1915. Shortly after obtaining this lease Moore moved from Mountain Grove to Willow Springs, and took charge of the creamery plant of the Green Hills Creamery Company at Willow Springs. Moore continued to draw his salary from plaintiff, and it was agreed that if the leased plant made a certain amount, he was to have a certain bonus above the stated salary. Plaintiff advanced money to properly equip the Willow Springs plant. On March 12, 1915, Moore secured a lease from the Green Hills Creamery Company to himself beginning on April 20, 1915, and running for five years.

It seems that there was a kind of tentative understanding between Moore and the directors of plaintiff that they would some time organize the leased plant at Willow Springs into a separate corporation, but no definite terms or time were ever agreed upon. Moore operated the leased plant under the name of "Willow Springs Creamery Company. L. N. Moore, Manager." In 1915 the plant lost $490, but in 1916 made about $9,000. Some time in 1916 Moore resigned as secretary and director of plaintiff, and sold his stock therein, but continued to operate, as manager, the Willow Springs plant, and plaintiff continued to pay his salary. On March 26, 1915, a few days after the five-year lease was obtained, plaintiff furnished $4,200 for the purpose of financing the Willow Springs plant. This was used in overhauling and replenishing the plant with new and necessary fixtures and machinery. This $4,200 was obtained in this manner: Six, 90-day notes of $700 each, payable to the Bank of Mountain Grove, were executed by plaintiff, and each director and Moore indorsed one of these notes, but each note was in fact plaintiff's obligation, while the individual indorser was obligated only on the note he indorsed. These notes were renewed from time to time, but the number of the notes and the amounts sometimes varied to fit the convenience of the amount owed, and to accommodate some notion of the different indorsers. The Willow Springs plant paid out $6,900, according to Moore. This went to the payment of the notes above mentioned, salaries, and rent on the lease. It appears that the plant at Willow Springs was operated as a kind of semi-independent concern as separate books, etc., were kept, and on the surface it appeared to be a real competitor with the Mountain Grove plant; but the Willow Springs plant was in fact managed and directed by Moore, who was in the employ and under the direction of plaintiff. Moore expected the plant at Willow Springs to be incorporated, and he to have stock therein, but the necessary steps to incorporate were not taken, and the matter passed, with occasional mention, until December, 1916, when Moore had some difference with the manager of plaintiff at Mountain Grove. After this difference Moore became insistent that the new corporation be created. J. A. Chase, living at Mountain Grove, and treasurer of plaintiff, sent Moore articles of association, leading to the incorporation of the Willow Springs plant, but the organization was not completed. In January, 1917, Moore, with the profits of the Willow Springs plant, discharged all the obligations incurred on behalf of the Willow Springs plant, and proceeded to organize a new and separate corporation under the name of "Willow Springs Creamery Company." Articles of incorporation were drawn, showing a capital of $10,000 divided into 400 shares of $25 each. Of these shares the articles disclose that Moore held 200, his wife 160, and two other defendants 20 each. These articles of incorporation disclose the claim that $6,450 of the capital stock had been paid in lawful money of the United States, and $3,550 in personal property; the personal property being itemized, and each item valued separately. These articles were completed, filed, and recorded in Howell county; and also filed with the secretary of state, but before a certificate of incorporation was issued the present proceedings were begun, and the proposed "Willow Springs Creamery Company, a corporation," fell briefly short of a separate...