Schilling & Schneider Brewing Co. v. Schneider

• Decision Date: 28 March 1892
• Citation: 19 S.W. 67,110 Mo. 83
• Parties: SCHILLING & SCHNEIDER BREWING CO. et al. v. SCHNEIDER et al.
• Court: Missouri Supreme Court

19 S.W. 67

110 Mo. 83

SCHILLING & SCHNEIDER BREWING CO. et al. v. SCHNEIDER et al.

Supreme Court of Missouri, Division No. 1.

March 28, 1892.

CORPORATIONS — PURCHASE OF STOCK — RIGHTS OF STOCKHOLDERS.

1. Where all the stock of a corporation is owned by three persons, an agreement by which two of them agree to buy the stock owned by the third, to be paid for in part by the proceeds of a note given by the corporation, and the residue by notes of the vendees, which they agree, as between themselves, shall be paid for out of the earnings of the company, is valid.

2. Such sale passes title to the stock to the vendees in the proportions named in the agreement itself, without regard to their respective holdings of stock at the time it is made.

3. Payments of said notes out of the earnings of the company cannot be questioned by stockholders who inherit their stock from one of the parties, nor by those who became stockholders after the payments were made, nor by a stockholder who was president of the corporation at the time the payments were made, and who consented to them at the time.

Appeal from St. Louis circuit court; JAMES E. WITHROW, Judge.

Suit by the Schilling & Schneider Brewing Company and others against Louisa Schneider and others to have certain stock declared to be the property of the corporation. Decree for defendants. Plaintiffs appeal. Affirmed.

H. A. Haeussler and Cecil V. Scott, for appellants. Rassieur & Schnurmacher, for respondents.

BLACK, J.

This is a controversy over 201 shares of stock in the Schilling & Schneider Brewing Company. The real plaintiffs in interest represent the Schilling estate, and the defendants represent the Schneider estate. The facts are these: The Koch & Schilling Brewing Company was a corporation under the laws of this state, with a capital stock of $50,000, divided into 500 shares, all owned by George Schilling, Charles F. Schneider, and Mrs. Koch. Schneider was the active business manager, and Schilling the brewer. For some reason, not disclosed, Schneider was not elected a director at the stockholders' meeting held on the 20th September, 1882. This fact led to an estrangement for the time being between him and Schilling, and Schneider threatened to sever his connection with the company. To induce him to remain, Schilling proposed a joint purchase of the stock held by Mrs. Koch. On the 23d September, 1882, Mrs. Koch, as party of the first part, and Schilling and Schneider, as parties of the second part, entered into a written contract, whereby she sold her 201 shares of stock to them for $25,000, the purchase price to be paid as follows: $10,000 cash, and their four notes each for $3,750, due in one, two, four, and five years, with interest. The agreement provides, among other things, that Mrs. Koch "does by these presents assign, transfer, and set over unto the said parties of the second part, share and share alike, two hundred and one shares of the capital stock of the Koch & Schilling Brewing Company, of the par value of one hundred dollars each. To have and to hold the said shares unto the said parties of the second part forever. And it is agreed by and between the said Schilling and Schneider that the said purchase money shall be paid out of the earnings of the Koch & Schilling Brewing Company, and charged to expense account; but this agreement shall in no way be deemed to limit the liability of the said parties of the second part, individually and jointly, for the whole of said liability or debt." In October, 1882, the name of the corporation was changed to the Schilling & Schneider Brewing Company, and Schneider was then elected a director, and made secretary and treasurer. Schilling owned 253 shares in his own right, and Schneider owned in his own right 46 shares, and they owned the 201 shares jointly purchased from Mrs. Koch. Schilling died in December, 1882, and in January, 1883, the administrators of his estate sold 25 of the 253 shares to Anton Reck. To induce Reck to buy this stock and take an active interest in...