Rollestone v. National Bank of Commerce

Citation252 S.W. 394,299 Mo. 57
Decision Date06 April 1923
Docket NumberNo. 23125.,23125.
PartiesROLLESTONE v. NATIONAL BANK OF COMMERCE IN ST. LOUIS et al.
CourtUnited States State Supreme Court of Missouri

Appeal from St. Louis Circuit Court; Granville Hogan, Judge.

Action by A. A. Rollestone against the National Bank of Commerce in St. Louis and others. Judgment for plaintiff, and defendants appeal. Affirmed.

Irvin V. Barth, Forest P. Tralles, and Watts, Gentry & Lee, all of St. Louis, for appellants.

Judson, Green & Henry, of St. Louis, for respondent.

RAGLAND, J.

This is an action in equity to enforce a trust in personal property and compel an accounting. The defendants are the executors of the will of John T. Milliken, deceased.

The petition alleged that—

"In the early part of 1906, the said Milliken stated to plaintiff that he would set apart and carry as trustee for plaintiff, until such time as it could be resold, 10,000 shares of the said 600,000 shares of the stock so purchased at 75 cents per share as aforesaid, and would pay plaintiff the dividends and profits therefrom, plaintiff to repay the said Milliken the purchase price of 75 cents per share out of the dividends or out of the proceeds of sale thereof."

It next set out in full two letters, hereinafter quoted at length, one of which was written by Milliken. This part of the petition, by intendment, at least, amounted to an averment that Milliken declared that he was carrying Rollestone for 10,000 shares of stock as he had agreed. It next alleged that Milliken received certain dividends on the 10,000 shares; that he sold the stock on or about March 1, 1915, at $4 per share; that no part of the proceeds of the sale of the stock "so held by Milliken as trustee for plaintiff, and no part of the said dividends so received by said Milliken as trustee for plaintiff, as aforesaid, were paid over to' him by said Milliken, or by the defendants, his executors," but that said sums had been mingled by Milliken with his own property and assets, and were then in the possession of his executors as part of the assets of his estate. The prayer was for the enforcement of the trust and for an accounting.

The answer was a general denial and pleas of the five-year statute of limitation, the ten-year statute and lathes.

The evidence on the part of plaintiff tended to establish the following facts:

On January 1, 1906, the Golden Cycle Mining Company, a corporation with a capital stock of $1,500,000, divided into shares of the par value of $1 each, was operating a gold mine at Cripple Creek, Cole. John T. Milliken was its president, and owned 595,000 shares of its capital stock. Plaintiff, Rollestone, was treasurer, but did not own any of its stock. He was also cashier and vice president of, the Bank of Victor at Victor, Colo. Milliken was also president of the Milliken-Helm Commission Company of St. Louis. He was a man of great wealth, but was still pursuing with zest the fascinating game of piling up additional millions. Among other activities he was extensively engaged in speculating in mines and in oil and mineral lands and leases. Colorado afforded in part the field of his operations, and here many of his most important transactions were effected through Rollestone or with his assistance. With respect to such matters their relations were intimate and confidential.

In January, 1906, Milliken, with the assistance of Rollestone, purchased an additional 600,000 shares of the capital stock of the Golden Cycle Mining Company at the price of 75 cents per share. This purchase gave him control of the company, and eliminated a rival faction which had been trying to obtain the control. Shortly after the acquisition of the additional stock by Milliken he said to plaintiff, in substance:

"Rollestone, you have been better to me than a brother. I want to carry you for a block of this stock. Now you can have whatever amount you want at what I paid for it, 75 cents per share."

This statement was made in the bank of Victor, and in the presence of T. C. McDonald, who was assistant cashier of the bank, and also assistant to Rollestone as treasurer of the Golden Cycle Mining Company. In these capacities he was present at many of the conferences between Milliken and Rollestone. In reply to Milliken's offer to carry a block of the stock for him, Rollestone said he would accept 10,000 shares of it. Soon after the conversation at the Bank of Victor just referred to the following letters were exchanged between Milliken and Rollestone:

                            "St. Louis, Mo., May 17, 1906
                

"A. A. Rollestone, Esq., Victor, Colo.—Dear Mr. Rollestone: There is some Cycle stock on the market. My friend Carter here bought 3,000 shares yesterday, and my bookkeeper, Miss Ellicott, bought 1,000 shares the day before, all at 77¢ I will go in with you on joint account and buy all that is offered at that price, because I am satisfied that the stock is worth par and that we will realize twice that much out of it when I get through with my present plans.

                   "Yours very truly, Jno. T. Milliken."
                                       "June 13, 1006
                

"John T. Milliken, Esq., 322 Pine Street, St. Louis, Mo.—Dear Mr. Milliken: I have been over to Routt county for the past ten days, and on my return found your letter of the 6th, telling me to mail Mr. Logan a check for six months' interest which I have done to-day. My recollection is that the rate of interest is eight per cent. I also received your recent letter regarding the buying up of Golden Cycle stock which is now on the market, on joint account. As you are going to be in Colorado before long, I think it best to wait until you can come out, and we will map out a plan. I have been thinking about your offer to carry me for a block of Golden Cycle stock, and if, out of the last purchase, you will increase my holdings to thirty thousand shares, I should like it. However, if this is too much, kindly let me know, as I do not wish to press the limit in, any way.

                  "Thanking you for your kindness, I remain
                   "Yours very truly
                               "A. A. Rollestone, Cashier."
                             "St. Louis, Mo., June 16, 1906
                

"A. A. Rollestone, Esq., Victor, Colorado— My dear Mr. Rollestone: Your letter of the 13th inst. at hand, contents fully noted. I expect to be out some time the latter part of this month. I do not see my way clear now to let you have more Cycle stock than I agreed to carry you for, namely, 10,000 shares, but I will join yeti in joint account in buying up the floating stock as stated in a previous letter; however, I do not think there is any hurry about doing so until we know what is at 12,000 feet. If we open the ore there I am well satisfied that I can market the mine and mill on the New York market for at least five millions of dollars. You see what the U. S. R. & P. common and preferred stock is selling for, also their bonds are bringing $102.00. We will have a mill that will be $1.50 a ton better than any property they own, and the Cycle mine is another asset. I believe that our property will be worth more than theirs, and I feel confident that I will ultimately be able to unload the whole outfit at the price above mentioned.

                   "Yours very truly,
                                           "Jno. T. Milliken."
                

In the summer or early fall of 1907, a little more than a year after the letters just quoted were written, Milliken was at Colorado Springs. In the course of a conversation which took place between him and McDonald at that time and place, with reference to some leases, Milliken said:

"Mr. McDonald, I want you to make some money out of these leases, and I want you arid Rollestone to make some money, especially Rollestone. I am carrying him now for 10.000 shares of capital stock at 75 cents that will make him a fortune."

Milliken seems never to have disposed of any of the Golden Cycle mining stock that he acquired from time to time until March 11, 1915, when he sold his entire holdings, amounting at that time to 1,431,623 shares, at $2.662/3 per share. He received dividends on the stock from 1910 to 1915, inclusive, ranging from 3 per cent. to 94 per cent. of the par value.

From many letters written by Milliken to Rollestone from 1906 to 1911 it abundantly appears that the cordial relation between the two remained unbroken during that time, and that Milliken was all the while availing himself of Rollestone's services in the capacity of confidential agent. During the summer of 1911, however, Milliken, who had also acquired control of the Bank of Victor, discharged Rollestone from the services of both the Bank and the mining company. What prompted Milliken to dismiss Rollestone from these positions is not disclosed by the record. The latter when let out was wholly without means. He first went to Denver, where he remained a time; he next made a trip to Europe, and then to South Africa. Returning to this country after a year or so, he went to Oklahoma, seeking to get into the oil business. He was residing there at the time he instituted this suit.

On October 1, 1912, one E. J. Boughton, as attorney for plaintiff, wrote Milliken the following letter:

                         "Cripple Creek, Colo., Oct. 1, 1912
                

"John T. Milliken, Esq., St. Louis, Mo.—Dear Sir: Mr. A. A. Rollestone represents to us the following statement of facts: Early in the year of 1906 he was treasurer of the Golden Cycle Mining Company, of which you were then, as now, the president. At that time you had a controversy with certain minority shareholders represented by Mr. Carlton and Mr. Campbell, whose stock you desired to purchase at 750 a share. For this purpose you asked Mr. Rollestone to procure you a loan from the Golden Cycle Treasury of $283,000. Mr. Rollestone arranged the loan for you, and with the money you purchased the minority stock at the price mentioned, depositing, the stock certificates thus acquired as security for the loan. Later the loan and securities were transferred to a bank in St. Louis. In...

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