Price v. Bankers' Trust Co. of St. Louis

• Decision Date: 06 July 1915
• Docket Number: No. 18178.,18178.
• Citation: Price v. Bankers' Trust Co. of St. Louis, 178 S.W. 745 (Mo. 1915)
• Parties: PRICE et al. v. BANKERS' TRUST CO. OF ST. LOUIS.
• Court: Missouri Supreme Court

178 S.W. 745

PRICE et al. v. BANKERS' TRUST CO. OF ST. LOUIS.

No. 18178.

Supreme Court of Missouri, Division No. 2.

July 6, 1915.

Rehearing Denied July 17, 1915.

Appeal from St. Louis Circuit Court; James B. Withrow, Judge.

Action by Thompson Price and others against the Bankers' Trust Company of St. Louis and others. From an order overruling the named defendant's motion to vacate an order appointing a receiver, it appeals. Case reversed and remanded, with directions to set aside the order, and for such further steps, not inconsistent with the opinion, as the parties may be advised to take.

Plaintiff Price and four other persons, who aver that they are members of the Arcadia Country Club (called hereinafter, for brevity's sake, the "Club"), with one Muskopf and the Dixon-Smith Engineering Company, who aver that they are creditors for small amounts of said club, brought this action in the circuit court of the city of St. Louis against said Arcadia Country Club, and the Whitener-London Realty Company and Bankers' Trust Company. Pursuant to the prayer of the below petition and the answer of the club, which admitted all of the allegations of said petition and joined in the request for a receiver, one C. Wiliam Koenig, Esq., was appointed receiver. Defendant Bankers' Trust Company moved to vacate the order appointing said receiver, and, its motion being overruled, appealed. Defendants Arcadia Country Club and Whitener-London Realty Company did not appeal.

In the view we take of the case, the petition becomes pertinent. Omitting formal parts, it reads thus:

"Plaintiffs state that the said Bankers' Trust Company and the said Whitener-London Realty Company, defendants herein, are both corporations organized under the laws of the state of Missouri, and have their principal offices in the said city of St. Louis, Mo., and that the said Arcadia Country Club has also its principal office in the said city of St. Louis.

"Plaintiffs state: That said Thompson Price, F. Garrison, 0. C. Conkling, C. E. M. Champ, T. C. Kimber, are each members of said Arcadia Country Club, and that the said plaintiffs, Dixon-Smith Engineering Company and said Henry C. Muskopf, are creditors of said Arcadia Country Club, the said Dixon-Smith being a creditor in the sum of $569.02, and the said Henry C. Muskopf is a creditor to the extent of $275.43; and that all of said plaintiffs bring this suit on behalf of all persons similarly situated who are willing to share the costs hereof.

"That the said Arcadia Country Club was organized under the laws of the state of Missouri, under article 10, c. 33, of the Revised Statutes of the state of Missouri 1909, by an order of the circuit court of the said city of St. Louis, entered on the 8th day of February, 1911. That the articles of association of said club were duly recorded in the office of the recorder of said city of St. Louis, on February 8, 1911, and that a certificate of incorporation was issued to said club by the Secretary of State of the state of Missouri, on the 10th day of February, 1911. That a copy of said charter and said certificate of incorporation, marked Exhibits `1' and `2,' are hereto attached and made a part hereof. That said club was incorporated without any capital stock, and that the purposes of said club, as set out in article 6 of its charter, are as follows: `Art. 6. The purposes and scope of this corporation shall be: (1) The study of physical science and the encouragement of debating, reading and literature. (2) The encouragement of rational social amusements. (3) Instruction in and the playing of lawful games of all kinds, both within doors and without. (4) Instructions in athletics and the encouragement of the same, and of physical training and development a all kinds, and to accomplish such object to acquire, own, operate and maintain for the use of its members, a clubhouse and grounds, and it is hereby expressly declared that this association is not formed for pecuniary profit and shall not be run or operated for pecuniary profit.'

"That said club, by deeds duly recorded, acquired title to 652 acres of land in Iron county, Mo., on the ___ day of ___, 1911, and the ___ day of ___, 1911, and acquired title to 5,036.44 acres in said Iron county, and also in St. Francois county, in the said state of Missouri, on the 18th day of February, 1911, by deed from the Whitener-London Realty Company to said club, dated February 18, 1911, and duly recorded in the recorder's office of said Iron county, on March 1, 1911, in Book 57, p. 432.

"That the consideration of said last-mentioned deed was the sum of $100,000, and that your petitioners aver that said consideration was attempted to be paid by giving memberships in said club to said grantor amounting to the sum of $50,000, and that said club gave a deed of trust on said land to secure notes aggregating approximately $49,000; said deed of trust being dated February 26, 1911, and being recorded in the recorder's office of Iron county, Mo., in Book 57, p. 426. That said notes so secured by said deed of trust matured at various times, and were in different amounts.

"That thereafter the said club undertook to make a contract for the construction of a certain dam located on said 652 acres with the said Whitener-London Realty Company, and that the consideration to be paid for said dam under said alleged contract was the sum of $30,000, which said amount was represented by notes of said club payable to said company, and which said notes were secured by an alleged deed of trust, dated July 24, 1911, executed by the said club to the said Bankers' Trust Company to secure said Whitener-London Realty Company, and covering said 652 acres. That said notes matured at various times, as shown) by said deed of trust, and were in different amounts. That said alleged deed of trust undertook to reserve from the property therein conveyed certain lots aggregating 82, which had been sold to various members of said club. That said alleged contract for the construction of said dam provided that 75 per cent. of all moneys to be received by said club from the sale of memberships and bungalow sites, or any other source of income derived by said club, should be applied on the said notes secured by said deed of trust. That said plaintiffs file herewith a copy of said alleged deed of trust on said 652 acres, marked Exhibit `3' and made a part hereof, and also a copy of said alleged dam contract, dated July 31, 1911, and of the bond thereto attached, executed by the Whitener-London Realty Company for the faithful construction of said dam, marked Exhibits `4' and `5' and made parts hereof.

"Plaintiffs further aver that said dam was constructed, but not in accordance with the plans and specifications referred to in said contract, and that said dam is now leaking badly, and that said club has never up to this time accepted said dam, because of the failure of the said Whitener-London Realty Company to construct said dam in accordance with said plans and specifications. Plaintiffs further aver that said club has never paid one cent under said alleged dam contract.

"Plaintiffs further aver: That the said Whitener-London Realty Company had certain business dealings with the said Bankers' Trust Company, and that said Bankers' Trust Company claims to be the holder of said $30,000 of notes, hereinabove described, and of said $49,000 of notes, hereinabove described. That neither said notes nor any interest thereon have been paid by said club. That the said Bankers' Trust Company is not the innocent holder of said notes, and had full knowledge of the limited power of said club under its charter, and said acts were ultra vires. That said Bankers' Trust Company undertook to advertise for sale said 652 acres of ground under said deed of trust of July 24, 1911, but subsequently withdrew said advertisement of said sale, but 'has declared its intention of again advertising said property for sale.

"Plaintiffs further aver that the said club undertook to quitclaim to the said Whitener-London Realty Company the said 5,036.44 acres of ground hereinabove described after the execution of said alleged deed of trust of February 25, 1911, and after the time that the said Bankers' Trust Company claimed to have acquired said $49,000 of notes.

"Plaintiffs further aver: That the said Bankers' Trust Company claims not to have authorized the said quitclaim deed, and the said Bankers' Trust Company is still holding said $49,000 of notes of said club, as well as said $30,000 of notes. That after the formation of said club about $28,000 was paid in by the members of said club. That the books and records of said club were kept in such condition that it has been impossible to secure a proper audit thereof. That the former officers of said club have retired and new officers have been elected. That the former officers of said club and the new officers thereof have not been able to agree as to various items of disbursement on account of said club, and for that reason, and because of the condition of the said books and records, they have been unable to make a proper accounting to the members of said club. That many of the members of said club, on account of the various controversies hereinabove set forth, and because of the failure of the club's purposes originally outlined herein, have declined to pay their club dues, for over a year and half past, and that said club has not been able to collect said dues from its said members.

"Plaintiffs further aver: That about 200 lots for bungalow sites in said 652 acres were sold to various members of said club, but that only 82 of said lots, as above stated, were reserved in the execution of said alleged deed of trust, and that, if said Bankers' Trust Company is permitted to foreclose said alleged deed of trust, then the said members of said club who have bought and paid for over 100 lots in said 652 acres will be deprived of their said lots. ...