Potts-Turnbull Advertising Co. v. Gatchell

• Court: Missouri Supreme Court
• Writing for the Court: LINDSAY, C. Per Curiam.
• Citation: Potts-Turnbull Advertising Co. v. Gatchell, 257 S.W. 134 (Mo. 1923)
• Decision Date: 31 December 1923
• Docket Number: 23586
• Parties: POTTS-TURNBULL ADVERTISING CO. v. GATCHELL et al

257 S.W. 134

POTTS-TURNBULL ADVERTISING CO. v. GATCHELL et al

No. 23586

Supreme Court of Missouri, First Division

December 31, 1923

John N Davis, of Kansas City, for appellant.

C. S Owsley, of Kansas City, for respondents.

OPINION

LINDSAY, C.

In this case the appeal was taken to the Kansas City Court of Appeals, and was thence transferred to this court, upon the ground that the suit involved the title to real estate. Preliminary to its statement of the reason for transferring the case, that court, in the opinion filed (236 S.W. 1078), expressed the view that the abstract of the record filed in that court was fatally defective, in that it did not show, by recital or reference to the record proper, the rendering of any decree or the filing and overruling of any motion for a new trial, or the allowing and filing of a bill of exceptions; and it was said the fact that these matters might appear in the abstract of the bill of exceptions would not avail. No objections to the consideration of any question in the case was raised in that court by the respondent, on the ground of insufficiency of appellant's abstract, and no objections have been offered here. The appeal was lodged in the Court of Appeals by the filing of the 'short form of transcript.' It is now here for all purposes, upon the same abstract, and the question raised is to be disposed of under the applicable rules of this court. In the abstract filed by appellants, matter which properly should be set forth in the abstract as a part of the record proper appears in the abstract as a part of the bill of exceptions, and in one or more particulars the reverse also appears, but, considered altogether, there is such recital of, or reference to, the record, as shows the decree, the filing and overruling of the motion for a new trial, the necessary steps taken in appeal, the filing of the bill of exceptions, and what is necessary to a complete understanding of all the questions presented for decision. This being so, such objections as might have been made are taken as waived by the respondent, under the provisions of rules 11, 13, and 31 of this court, and the case will be considered as here on appeal for determination upon its merits.

On June 28, 1919, the plaintiff obtained a judgment in the circuit court of Jackson county against the defendant G. & G. Remedies Company, in the sum of $ 1,965.15. Execution issued thereon, and was returned wholly unsatisfied; no property having been found upon which to levy. Afterward plaintiff brought this suit to subject the real estate herein involved, lots 17 and 18 in block 2 of Gates and Kendall's First addition in Kansas City, to the payment of said judgment, alleging that defendant G. & G. Remedies Company was the owner of said lots, but that defendant Rosa L. Gatchell claimed to be the owner thereof or to have an interest therein, and the specific prayer was that said lots be declared to be the property of G. & G. Remedies Company and not the property of Rosa L. Gatchell, and be made subject to and ordered sold for the payment of said judgment, with also a prayer for general relief. It appears from the pleadings upon which this cause was heard, from the admissions in the precedent pleadings introduced in evidence, and other admissions and evidence that G. and G. Remedies Company was incorporated about June 26, 1915, by the defendant Rosa L. Gatchell and by W. H. Gatchell her husband, and James W. Gatchell, her son. The two men were veterinary surgeons, and the incorporators had been engaged in compounding and selling veterinary remedies, and formulas for remedies. The company was incorporated to continue that business. The authorized capital stock was $ 30,000, of which one-half was stated to be subscribed and paid up. Of the $ 15,000 of paid-up capital, the sum of $ 10,000 was stated as being paid in read estate, it being that herein involved, but the description given in the articles of association was incomplete. The remainder of the paid-up capital, it was stated, consisted of a small quantity of remedies on hand, certain formulas, the good will of the business, and $ 2,000 in cash. Each of the three incorporators took 500 shares of $ 10 par value. The real estate in question was owned at the time by defendant Rosa L. Gatchell. On August 26, 1915, she and her husband executed a deed to G. & G. Remedies Company, in which they undertook to convey said real estate, but described the lots as situated in 'Gates and Kendall's addition,' leaving out of the description the word 'First,' and it seems that the number of the block was not given. This deed was recorded in March, 1916.

The business of the plaintiff company is that of advertising. Prior to the transaction out of which arose the original suit, the plaintiff company had made and filled contracts with W. H. Gatchell & Son, and with G. & G. Remedies Company, for advertising their formulas and remedies, and a small monthly account was running between them.

At some time in the year, 1917, an agreement was reached between plaintiff and the G. & G. Remedies Company whereby plaintiff was to undertake an extensive campaign of advertising for the defendant company, to involve in all an outlay of about $ 3,000 by the defendant company. This agreement was made by a representative of plaintiff company, and by James W. Gatchell, who was secretary and manager of G. & G. Remedies Company. There is dispute as to the time when the agreement was made, and its performance entered upon, and dispute as to whether James W. Gatchell informed Whalen, the agent of plaintiff, at the time, that Rosa L. Gatchell, because of her opposition to their undertaking this extensive campaign of advertising, had disposed of her stock in the G. & G. Remedies Company, and withdrawn therefrom all her support, financial or otherwise. These disputed matters will be noticed later. The defendant company failed to pay for advertising done, and suit resulting in the judgment followed.

The oral testimony for defendants was that on June 25, 1917, G. & G. Remedies Company executed to Rosa L. Gatchell a deed undertaking to reconvey to her the lots in question, and in this deed the lots were not properly described. Plaintiff alleged the making of the deed to G. & G. Remedies Company, and defendants upon the trial admitted that it was made, and its purpose. Defendants alleged a reconveyance of the lots by deed from G. & G. Remedies Company to Rosa L. Gatchell, but did not offer the deed nor a certified copy, and introduced the oral evidence of its contents, its making, and its purpose, over the objections of the plaintiff. The defendants claim that, at about the time of the making of the deed from defendant company to Rosa L. Gatchell, in June, 1917, Rosa L. Gatchell sold and returned back to G. & G. Remedies Company all of her stock in that company, as part of the consideration for the deed. Its par value was $ 5,000. At and prior to this time, defendants asserted, G. & G. Remedies Company was indebted to Rosa L. Gatchell in the sum of $ 5,000, or more, for moneys alleged to have been advanced or lent by her to that company or its promoters, in the establishment and prosecution of the business. The position of the defendants was and is that the deed so made by G. & G. Remedies Company to Rosa L. Gatchell was in payment and cancellation of the said indebtedness to her, and also in payment of the amount of her shares transferred to the company, which it was expected the company would resell. The evidence introduced by defendants to show the existence of said indebtedness from G. & G. Remedies Company to Rosa L. Gatchell will be considered later.

The trial court found that on June 25, 1917, G. & G. Remedies Company was justly indebted to Rosa L. Gatchell in the sum of $ 5,000, and recited the making of said deed by G. & G. Remedies Company to Rosa L. Gatchell, and the transfer of stock by her to that company, and held that the purchase of the stock by the defendant company was ultra vires and void. The court reformed both the deeds mentioned in respect of description of the property, and held that under the deed first mentioned defendant company took title to the lots, and that, under the last-mentioned deed, defendant Rosa L. Gatchell, acquired an interest in said property to the amount of the $ 5,000 indebtedness of the company to her --

'for the payment of which she has a lien on the said property, and that in excess of that sum she holds said property in trust for the creditors of said defendant corporation, the G. & G. Remedies Company.'

The court thereupon decreed that said property be sold by the sheriff, as under execution; that out of the proceeds, after payment of the costs of sale and of this suit, there should next be paid to defendant Rosa L. Gatchell, in satisfaction of the lien aforesaid, the sum of $ 5,000, and then to plaintiff there should be paid the amount of its judgment and costs, and the balance, if any, should be paid to the clerk of the court to be disposed of by further order of the court.

The court did not err in reforming the deed from Rosa L. Gatchell to defendant corporation. The further action of the court in finding that G. & G. Remedies Company was indebted to Rosa L. Gatchell in the sum of $ 5,000 and in holding that, through the said deed from defendant company to her, this real estate was charged with a first lien in her favor to the extent of $ 5,000, requires consideration of the evidence as to that transaction.

The plaintiff did not admit the making of the deed from G. &amp G. Remedies Company to Rosa L. Gatchell, further than whatever inference might be drawn from its allegation that she claimed to own or to have an interest in the lots. The defendants, after pleading the making of...