Ramacciotti v. Joe Simpkins, Inc.
| Decision Date | 13 May 1968 |
| Docket Number | No. 51496,No. 2,51496,2 |
| Citation | 427 S.W.2d 425 |
| Parties | Frank L. RAMACCIOTTI, Appellant, v. JOE SIMPKINS, INC., Joe Simpkins, Mildred U. Simpkis, Mound City Finance Company, a corporation, Hannibal Auto Sales & Investment Company, a corporation, and Hannibal Motors, Inc., Respondents |
| Court | Missouri Supreme Court |
Roberts P. Elam, St. Louis, for plaintiff-appellant.
Carroll J. Donohue, James E. Chervitz, Husch, Eppenberger, Donohue, Elson & Cornfeld, St. Louis, for defendant-respondent, Joe Simpkins, Inc.
Hinkel & Carey, Henry C. Hinkel, Harold D. Carey, Clifford L. Goetz, W. Scott Pollard, St. Louis, for respondents-defendants, other than respondent-defendant, Joe Simpkins, Inc.
STOCKARD, Commissioner.
Plaintiff, Frank Ramacciotti, has appealed from the judgment of the circuit court of the City of St. Louis entered in favor of all defendants in his suit in equity in the nature of a corporate stockholders derivative action in which he sought an accounting against all defendants, except Joe Simpkins, Inc., and the appointment of a receiver to liquidate Joe Simpkins, Inc., and to distribute its assets.
Plaintiff has abandoned on this appeal several issues, including whether a receiver should be appointed, because no point pertaining thereto is set forth in his brief to this court. State ex rel. Plymesser v. Cleaveland, Mo., 387 S.W.2d 556. We review the case de novo, weigh the evidence, and determine on the whole record the relief, if any, to which plaintiff is entitled. The trial court made no findings of fact, but entered a general judgment for defendants. Therefore, it necessarily found the fact issues in their favor. Because of the opportunity of the trial court to observe and hear the witnesses, in our determination of the facts from conflicting testimony we defer to the findings of the trial court. McCarty v. McCarty, Mo., 300 S.W.2d 394, 399. The transcript exceeds 10,000 pages and contains more than 1200 exhibits. Much of this pertains to abandoned issues. Rather than laboriously set forth in detail the conflicting evidence in support of the positions of the parties, we shall for the most part set forth the ultimate facts, as we have found them, essential to the determination of the issues.
Plaintiff's first point, hereafter more specifically set out, pertains to numerous transactions whereby Joe Simpkins, Inc., purchased repossessed automobiles from two finance companies. However, preliminary to the consideration of the point, it is necessary to set forth in considerable detail a statement of the ownership and methods of operation of Joe Simpkins, Inc. and of several other corporations.
Plaintiff was employed in 1946 by Joe Simpkins (hereinafter referred to as Mr. Simpkins to distinguish him from Joe Simpkins, Inc.) in a tax matter involving Mr. Simpkins personally, Mr. Charles Sakowski, and Mound City Finance Company. This employment continued until 1958 when the tax matter was concluded. In 1947 Mr. Simpkins acquired one-half interest in Irving Motors, Inc. Mr. Fred Evens was the owner of the other half. Shortly thereafter the name of the corporation was changed to Joe Simpkins, Inc., and an agency franchise was acquired from the Ford Motor Company. Although plaintiff had no experience in the new or used automobile business, at the invitation of Mr. Simpkins, plaintiff purchased one third of the stock of Joe Simpkins, Inc. and paid Mr. Simpkins and Mr. Evens each $16,666.67. Plaintiff testified that he associated himself in the business because he 'figured (he) could contribute some judgment and management ability.' He immediately was elected a director and named assistant secretary-treasurer. In 1950 following some litigation, the one-third interest of Mr. Evens was purchased by Joe Simpkins, Inc. for $140,000 plus reimbursement of $8,000 litigation expenses. The stock formerly owned by Mr. Evens thereafter remained as treasury stock. Plaintiff and Mr. Simpkins were then equal owners of the outstanding stock. The directors were plaintiff, Mr. Simpkins and the latter's wife. Mr. Simpkins remained as president, his wife was vice president, and plaintiff became secretary-treasurer. In August 1956, Joe Simpkins, Inc. surrendered its franchise from the Ford Motor Company, and sold its business, equipment, furniture and fixtures to Mr. George Pappas. Thereafter, the principal business of the company consisted of disposing of automobiles on hand and those repossessed, and the liquidation of its accounts receivable. In 1958, following a merger with Joe Simpkins, Inc. of four investment companies, mentioned hereafter, additional shares of stock were issued and the wife of Mr. Simpkins became the owner of some shares, but plaintiff continued to own one-half of the total outstanding shares. On November 9, 1961, at a meeting of the board of directors called by Mr. Simpkins, plaintiff was removed from the office of secretary-treasurer, but he remained a member of the board of directors. Mr. Simpkins was elected treasurer in addition to being president, and an employee of his was elected secretary. At the time this suit was filed in November 1961 the assets of Joe Simpkins, Inc. consisted of an unliquidated account receivable, doubtful of collection, of $41.90; approximately $187,000 in a checking account in a Wellston, Missouri bank; negotiable bonds in excess of $200,00; more than $73,000 of secured and unsecured notes not then due and payable; several thousand dollars of accrued interest; and the claims on behalf of Joe Simpkins, Inc. asserted by plaintiff in this suit. The liabilities amounted to $348 for income taxes payable, and a disputed claim by plaintiff for $21,000 for services.
Ford Center Investment Company, Precision Investment Company, Discount Investment Company, and Hanscom Investment Company (hereafter referred to as the 'investment companies') were each equally owned by Mr. Simpkins and plaintiff, with the former being president and plaintiff being treasurer of each. These corporations were engaged primarily in the financing of new automobiles sold by Joe Simpknis, Inc. They operated from the office of Joe Simpkins, Inc., but at times some of their business was handled from the office of Mound City Finance Company. In April 1958, as above noted, they were merged with Joe Simpkins, Inc.
Mound City Finance Company (hereinafter referred to as 'Mound City') was owned by Mr. Simpkins and Mr. Charles Sakowski, the former owning 75% of the stock and the latter owning 25%. Mr. Sakowski is a brother-in-law of Mr. Simpkins, and was manager of Mound City. Mr. Simpkins was president and treasurer, and he, his wife, and Mr. Sakowski were the directors. By reason of plaintiff's employment as attorney in the tax matter involving Mr. Simpkins, Mr. Sakowski, and Mound City, and because plaintiff wrote the corporate minutes for Mound City after 1947 and until 1957, and acted as its attorney in some matters, there can be no question but that at all times material to the issues here he was fully aware that Mr. Simpkins was the principal owner of Mound City, and that he was an officer and director thereof. Mound City financed the sale of used automobiles by Joe Simpkins, Inc. It was first located at 4454 Easton, St. Louis, where Mr. Simpkins operated a used car business, and for awhile after first engaging in business Joe Simpkins, Inc. operated from its office. Later Joe Simpkins, Inc. moved to 6421 Easton, and in 1951 Mound City leased a portion of the building of Joe Simpkins, Inc. for its office where it operated until after the sale to Mr. Pappas.
Hannibal Auto Sales & Investment Company (hereafter referred to as 'Hannibal Investment') was engaged in the same business as Mound City. It was owned by Mr. Simpkins and his wife. Mr. Simpkins was its president and he, his wife, and Mr. Sakowski were the directors. In the latter part of 1952 it moved its office and place of business into the office occupied by Mound City and Mr. Sakowski managed its business.
In 1947, and for several years thereafter, there existed in the automobile business what was known as a 'seller's market.' When Joe Simpkins, Inc. first started operations it was with the plan to become a 'volume dealer' of new automobiles, that is, an automobile dealer who sold a large number of automobiles with liberal tradein allowances and with favorable financing, at least from the buyer's standpoint. It was recognized that to do this it would be necessary to attract buyers from areas other than Wellston, Missouri, the place of operation of Joe Simpkins, Inc., by advertising, publicity, and favorable 'deals.'
When a new automobile was sold on credit, a note secured by a chattel mortgage (referred to in the testimony as 'new car paper') would be prepared for the amount of the unpaid purchase price. This note would be sold to one of the investment companies, which in turn would discount it to a bank or to an automobile financing agency known as GFC. At least some of the notes in this 'new car paper' were endorsed without recourse, but apparently most were endorsed with recourse. In addition, there was an arrangement whereby Mr. Simpkins and plaintiff personally guaranteed these notes, at least to the banks and GFC. When a note became in default, the investment company repurchased the note, and if a repossession was required the automobile was picked up and placed on the used car lot of Joe Simpkins, Inc., and after notice to the maker of the note the automobile was sold as a used automobile.
A used automobile was usually obtained by Joe Simpkins, Inc. as a 'trade-in' when either a new or another used automobile was sold. For awhile after Joe Simpkins, Inc. started operations most of the used automobiles were sold to another automobile dealer at a 'wholesale figure.' Joe Simpkins, Inc. later sold the used automobiles at retail, and at least four used car lots were operated at various times.
When Joe Simpkins, Inc. first started...
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