Shafer v. Home Trading Co.

• Decision Date: 22 August 1932
• Citation: 52 S.W.2d 462,227 Mo.App. 347
• Parties: CHARLES E. SHAFER ET AL., RESPONDENTS, v. HOME TRADING COMPANY, M. T. BLICKENSDERFER, MRS. M. T. BLICKENSDERFER, RUSSELL MUMFORD, SEYMORE WILLS AND MARTIN BLICKENSDERFER, APPELLANTS
• Court: Missouri Court of Appeals

52 S.W.2d 462

227 Mo.App. 347

CHARLES E. SHAFER ET AL., RESPONDENTS, v. HOME TRADING COMPANY, M. T. BLICKENSDERFER, MRS. M. T. BLICKENSDERFER, RUSSELL MUMFORD, SEYMORE WILLS AND MARTIN BLICKENSDERFER, APPELLANTS

Court of Appeals of Missouri, Springfield

August 22, 1932

Appeal from the Circuit Court of Laclede County.--Hon. Harry Clymer Special Judge.

REVERSED AND REMANDED (with directions).

Reversed and remanded.

Haymes & Dickey for appellants.

Phil M Donnelly and A. W. Curry for respondents.

BAILEY J. Cox, P. J., and Smith, J., concur.

OPINION

BAILEY, J.

--This is an action by a stockholder of defendant Home Trading Company, a corporation, to compel the board of directors of said company to account for their official conduct in the management and disposition of its funds, property and business; to require them to re-pay the corporation all funds and the value of all property retained by them or transferred to others in violation of their duties; to suspend them from exercising their offices and for the appointment of one or more receivers to take charge of the property of defendant corporation and account for its assets for those entitled thereto. The trial court denied the relief sought and rendered judgment for defendants. Plaintiff has appealed.

Plaintiff's bill states that the Home Trading Company has an authorized capital of $ 28,000, of which $ 20,000 is common and $ 8000 is preferred. All the common stock is alleged to be owned by defendants M. T. Blickensderfer, Mrs. M. T. Blickensderfer, Russell Mumford, Seymore Wills, Martin Blickensderfer and Wills Blickensderfer, all of whom are related by blood or marriage. It is further alleged that only $ 4000 of the preferred stock has been issued, all of which, is owned by plaintiff. These allegations are admitted to be correct.

As grounds for the relief sought plaintiff makes eight specific charges, some of which are admitted. These will be considered in order. It is charged that defendant, M. T. Blickensderfer, President of the Home Trading Company, has borrowed $ 2000 from said corporation and that the note given therefor by him has been permitted to run for a number of years; that no part of the principal and no interest, which now amounts to $ 980, has been paid; that the officers and directors of the corporation have failed and refused to take any steps to collect this indebtedness, which is long past due. This charge is admitted by defendant M. T. Blickensderfer. The note referred to is dated April 1, 1923, payable twelve months after date with interest at the rate of six per cent per annum. This note would, of course, become outlawed in April, 1934, unless some payment should be made thereon before that time. The Board of Directors of defendant corporation consists of M. T. Blickensderfer and members of his family or relations by marriage. He testified it would not be right for the corporation to sue him on the note, but did not explain why. This charge is, we think, sustained by the evidence.

It is further charged that plaintiff owns preferred stock in the corporation and has owned it for a period of eight years and that no dividend has been paid during that period of time; that plaintiff purchased said preferred stock with the understanding and agreement that said corporation would employ him at a salary of $ 100 per month, which was later reduced to $ 90 per month; that M. T. Blickensderfer, acting for said company, has wrongfully and maliciously discharged plaintiff; that said company now owes plaintiff for services under the terms of said agreement.

As to this charge, defendant M. T. Blickenderfer admitted that the agreement, as set forth above, was made, and that plaintiff, after being employed under the agreement from 1923 to May, 1931, was discharged. On this phase of the case he testified as follows: "Mr. Shafer was discharged in May, and immediate cause of discharge was his suing the corporation which I considered an injury to it. He brought at least one suit and there were other reasons for the discharge. I could get a man for less money and he was doing things I thought injurious to the business. In conversation with Lee Webster he said he was expecting a receivership and said they could buy things better. I didn't know what he said to Rogers and Baldwin. That I was afraid was an injury to the business. I thought I was pretty well satisfied he talked to Mr. Tribble of the Witte Hardware Company, whom I had given an order. I don't know what was said between him and Tribble. That order was returned to me the next morning and I destroyed it. That was after he talked to Shafer. Shafer and I talked about business, collection of accounts and notes and I tried to induce him to make the collection of those his special business and I think he made efforts as I did. Up to first filing of this proceeding we were going along about the same."

Plaintiff admitted having a conversation with Lee Webster, a customer of the store, in which he told him he thought he could sell him a plow "right," if he could ever get an "understanding." Defendants take the position that plaintiff, under this line of evidence, was guilty of disloyalty to the corporation and that therefore he does not come into a court of equity with clean hands. It appears, however, that at the time of this occurrence, plaintiff had already instituted a suit against the corporation. No complaint is made as to the loyalty of plaintiff during the seven or eight years he was employed previously. His conduct as above set forth might be a defense against a suit on the contract by which he was entitled to employment, but not of such importance as to invoke the equity rule as to "unclean hands" relied upon by defendants. While this charge against defendants is sustained by the evidence, there was some justification for plaintiff's discharge from defendant company's service and we consider the issue of little importance either way.

Charge three relates to the admitted fact that the corporation employs three members of the Blickensderfer family. There is no charge that the salaries paid them are too large or that they are unnecessary employees, or that they are incompetent to perform their duties. That the corporation is owned almost entirely by the Blickensderfers is admitted. It is not unusual, however, for such a state of affairs to exist and that in itself is of...