O'Neil v. Viviano

• Decision Date: 01 June 1937
• Docket Number: No. 23941.,23941.
• Citation: 105 S.W.2d 985
• Parties: O'NEIL v. VIVIANO et al.
• Court: Missouri Court of Appeals

105 S.W.2d 985

O'NEIL v. VIVIANO et al.

No. 23941.

St. Louis Court of Appeals. Missouri.

June 1, 1937.

Rehearing Denied June 15, 1937.

Appeal from St. Louis Circuit Court; Moses Hartmann, Judge.

"Not to be published in State Reports."

Action by Laurence O'Neil, administrator d. b. n. c. t. a. of the estate of John F. O'Neil, deceased, against Gaetano Viviano, Fannie Beckemeier, executrix of the estate of Chris Beckemeier, Jr., deceased and others. From a judgment, named defendants appeal.

Affirmed.

Leahy, Walther, Hecker & Ely and J. L. London, all of St. Louis, for appellant Gaetano Viviano.

Edward C. Schneider and Bryan Wilson, both of St. Louis, for appellant Fannie Beckemeier.

Otto F. Karbe and Albert E. Hausman, both of St. Louis, for respondent.

BENNICK, Commissioner.

This is a consolidated cause embracing the separate appeals of Gaetano Viviano, and Fannie Beckemeier, executrix of the estate of Chris Beckemeier, Jr., deceased, from an adverse judgment rendered by the circuit court of the city of St. Louis in an action for the recovery of certain sums alleged to be due the plaintiff under an assignment.

The action grows out of a course of business dealings had between certain of the officers and directors of the former Republic National Bank of St. Louis relative to the purchase of certain of the outstanding shares of stock in that institution.

The action was brought by Jessie B. O'Neil, the executrix of the estate of John F. O'Neil, deceased, who had been one of the directors of the bank. During the progress of the case in the circuit court Jessie B. O'Neil died, whereupon her death was suggested to the court, and, with all parties consenting, Laurence O'Neil, administrator de bonis non cum testamento annexo of the estate of John F. O'Neil, deceased, was substituted as party plaintiff.

The shares of stock in question were owned by one William Sacks, and some 2,287 of them had been theretofore pledged by him with various banks, insurance companies, and individuals throughout the country to secure loans which Sacks had obtained in the aggregate sum of $179,900.

On March 8, 1923, Sacks arranged to borrow the sum of $32,115.55 from John F. O'Neil, his friend and former associate on the board of directors of the Republic National Bank, and as collateral security for the payment of such indebtedness, which was evidenced by a promissory note, Sacks, as of that date, executed to O'Neil an assignment in writing whereby he purported to assign to O'Neil all his "right, title, and interest" in and to said 2,287 shares of stock, subject to the existing encumbrances against the same aggregating $179,900.

In other words, according to Sacks' own testimony, what he actually assigned to O'Neil was his equity in the stock pledged, legal title to which remained in him on the books of the Republic National Bank, and possession of which was of course retained by the several pledgees to whom the stock had been theretofore indorsed in blank to secure Sacks' numerous loans. The actual sale of the stock occurred at a later date, as our statement of the facts of the case will hereinafter disclose.

Subsequently some twelve of the officers and directors of the bank determined upon a plan of associating themselves together as a group or syndicate of the purpose of acquiring 2,356 shares of the bank's outstanding stock, including the stock owned by Sacks, the purpose being to enable the parties to the agreement and other stockholders similarly minded to convert the bank into a trust company to be organized under the laws of the state of Missouri.

The twelve men in question were John F. O'Neil, J. A. Lewis, J. R. Paisley, J. T. Bradley, C. Bernet, Thomas Mellow, Richard Moore, Gaetano Viviano, George W. Hobbs, F. A. Bannister, Chris Beckemeier, Jr., and John Henderson.

On January 3, 1924, a written agreement was entered into between the participants in the plan, in which agreement it was recited that the parties signing whatever promissory notes might be executed in connection with the acquisition of the stock should be jointly and severally liable thereon; that the proceeds of such of the stock as might be sold after its acquisition by the group should inure to the benefit of and be credited to each of the parties equally, so that the liability of each party upon the promissory notes would be reduced accordingly; and that the stock should be sold for a price not less than $80 a share.

It was further provided in the agreement that O'Neil, Lewis, and Paisley should be constituted trustees for all the parties to the agreement for the purpose of receiving any and all funds arising from the proceeds of the sale of the stock, and of seeing that the proper and necessary credits were made upon whatever promissory notes were executed by the parties in connection with the carrying out of the provisions of the agreement.

Because of the close relationship existing between O'Neil and Sacks, the members of the syndicate chose O'Neil as the one to negotiate with Sacks for the sale of his stock to the syndicate at $80 a share rather than at the price of $90 a share at which he professed to be holding it. While negotiations were pending Sacks talked to different members of the syndicate regarding their plan, and finally consented to sell his stock for $80 a share, the sale having apparently been consummated on or about January 8, 1924. Lewis at least knew, prior to the consummation of the sale, that Sacks had theretofore assigned his equity in the stock to O'Neil as collateral security for the payment of the note which he had given O'Neil, and upon which the name of John Henderson seemingly appeared as indorser.

The difference between the value of Sacks' stock at $80 a share and the amount of his outstanding indebtedness to the persons, banks, and institutions with which the stock had been pledged was the sum of $23,033.01, which sum consequently represented the value of the equity theretofore assigned by Sacks to O'Neil as collateral security for the latter's loan to Sacks. This meant, of course, that Sacks would receive nothing from the sale other than the pro tanto discharge of those obligations of his for which the stock or his equity therein had been pledged or assigned as security. Sacks' testimony was that following the sale of his stock he had no further interest either in the bank or in its stock, the idea being that full and complete title to the stock at once vested in the other parties concerned upon the extinguishment of Sacks' own title.

Immediately after the purchase of the stock from Sacks the trustees for the syndicate began negotiations with the persons, banks, and institutions with which the stock had been pledged with a view to the discharge of Sacks' numerous obligations to such persons, banks, and institutions, and the consequent release of the stock to the trustees. For the accomplishment of this purpose assessments were made upon the various members of the syndicate, so that upon the payment of Sacks' indebtedness the stock might be transferred to the trustees for the benefit of the members. Nine of the members, including O'Neil, but excluding Hobbs and Henderson, contributed their pro rata shares to the fund necessary to secure the release of the stock, and upon its acquisition by the trustees it was apportioned out in equal lots to such nine members of the syndicate, including Viviano and Beckemeier, and was thereafter carried on the books of the bank in the names of such respective owners, and subsequent dividends declared upon the same were paid out to the owners accordingly.

On February 14, 1924, more than a month after the sale of his stock to the syndicate, Sacks for some reason wrote the bank, advising it that by an instrument dated March 8, 1923, he had assigned to O'Neil his equity in the stock outstanding in his name. This letter was received by Lewis, the president of the bank, who, it will be recalled, was already aware of such assignment, and was placed by him in his personal files for whatever purposes might be subsequently served by it.

It will be observed that in the redemption of the stock O'Neil's equity or interest of $23,033.01 had not been taken care of, and on May 8, 1924, the trustees, consisting of Lewis, O'Neil himself, and Paisley, executed to O'Neil their promissory note for such sum, payable six months after date, and made to bear interest from January 8, 1924, until paid. Evidently the latter date was fixed for the commencement of the accrual of interest because of...