Shumake v. Basic Metals Mining Corp.

• Citation: 129 S.W.2d 36,235 Mo.App. 214
• Parties: T. P. SHUMAKE (PLAINTIFF), RESPONDENT, v. BASIC METALS MINING CORPORATION, A CORPORATION, AND M. C. RHODES, DEFENDANTS, BASIC METALS MINING CORPORATION, A CORPORATION (DEFENDANT), APPELLANT
• Decision Date: 06 June 1939
• Court: Missouri Court of Appeals

129 S.W.2d 36

235 Mo.App. 214

T. P. SHUMAKE (PLAINTIFF), RESPONDENT, v. BASIC METALS MINING CORPORATION, A CORPORATION, AND M. C. RHODES, DEFENDANTS, BASIC METALS MINING CORPORATION, A CORPORATION (DEFENDANT), APPELLANT

Court of Appeals of Missouri, St. Louis

June 6, 1939

Motion for rehearing overruled, June 20, 1939.

Appeal from the Circuit Court of City of St. Louis.--Hon. James M Douglas, Judge.

REVERSED.

Judgment reversed.

Wm. H Allen for appellant.

(1) 2 Corpus Juris Secundum, p. 1173, Agency, sec. 85; 2 American Jurisprudence, p. 58, Agency, sec. 71; 1 Mechem on Agency (2 Ed.), p. 483, sec. 687; 3 Paige on Contracts, p. 2992, sec 1740; Supplement to Paige on Contracts, p. 1120, sec. 1742; Lewis Sagal Co. v. Smith, 35 F.2d 182; In re Columbia Shoe Co. (Kreisher v. Spiegel), 289 F. 465; Rowe v. Rand, 111 Ind. 206, 12 N.E. 377, l. c. 379; Mueller v. Nugent, 184 U.S. 1, l. c. 14; In re Schow, 313 F. 514; In re Cleapor, 16 F.Supp. 481; McCoy v. Lippner Auto Co., 150 Tenn. 482, 265 S.W. 988; In re Frazier, 117 F. 946; Title 11, U.S.C. A., sec. 104; In re Youdleman-Walsh Foundry Co., 166 F. 381; In the Matter of Automobile Co., Bankrupt, 24 American Bankruptcy Reports (N. S.) 594, l. c. 596; Collier on Bankruptcy (12 Ed.), p. 1000; Palmer v. Welch, 171 Mo.App. 580; Ault v. Bradley, 82 Mo.App. 335; 21 C. J., p. 1202, par. 205; Shoemaker v. Johnson, 200 Mo.App. 209; Bay v. Bedwell (Mo. App.), 21 S.W.2d 203; Mills v. Met. St. Ry. Co., 282 Mo. 118; El Paso Milling Co. v. Davis, 194 Mo.App. 1; Haverstick v. Brookshire (Mo. App.), 28 S.W.2d 432. (2) Sec. 2839, R. S. Mo. 1929; Hart v. John W. Rowan Plastering Co. (Mo. App.), 88 S.W.2d 264; Weaver v. M. & O. R. Co. (Mo.), 120 S.W.2d 1107, 1110, 1118; 14a C. J., pp. 399, 400, sec. 225; Fidelity National Bank & Trust Co. v. Dry Goods Co., 293 Mo. 194; First National Bank v. Equipment Co., 221 Mo.App. 733; Jas. F. Monoghan, Inc., v. M. Lowenstein & Sons, 290 Mass. 331, 195 N.E. 101; Cashin v. Corporation Finance Co., 251 Mass. 60, 62, 63, 140 N.E. 233; Home Builders Co. v. Reddin, 97 Colo. 232, 148 P.2d 800; E. O. Painter Fertilizer Co. v. Boyd, 93 Fla. 354, 114 So. 444; Long v. Lehigh Coal & Navigation Co., 292 Pa. 164, 140 A. 871; Adkins-Polk Co. v. Pate (Tex. Civ. App.), 11 S.W.2d 654; Lindale Cooperative Store v. Ailey, 32 Ga.App. 30, 122 S.E. 718; Ailey v. Lindale Cooperative Store, 33 Ga.App. 63, 125 S.E. 717; Bagot v. Inter-Mountain Milling Co., 100 Ore. 127, 197 P. 824. A president or manager has no implied authority to do any act not within the usual course of the ordinary business of the corporation. Bacon Piano Co. v. Jewelry & Music Co., 225 Mo.App. 463; Stoneman v. Fox Film Corporation (Mass.), 4 N.E.2d 63, 107 A. L. R. 989; Hall v. Passaic Water Co., 83 N.J. L. 771, 85 A. 349, 43 L.R.A. (N. S.) 750; Baird Lumber Co. v. Devlin, 124 Ala. 245, 27 So. 425, 429; Deffenbaugh v. Jackson Paper Mfg. Co., 120 Mich. 242, 79 N.W. 197; State ex rel. Schroeder v. Perkins, 90 Mo.App. 603; 14a C. J., p. 424, sec. 227; p. 428, sec. 2280; p. 430, sec. 2283. In 14a C. J., p. 424, sec. 2275.

Brown & Frank and Harry A. Frank for respondent.

(1) Zeitinger v. Hargadine-McKittrick Dry Goods Co., 298 Mo. 461, l. c. 473; State ex rel. Ward v. Trimble, 39 S.W.2d 372, l. c. 373; Kelvinator, St. Louis, Inc. v. Schader, 225 Mo.App. 479, l. c. 486, 39 S.W.2d 385, l. c. 387; Shapiro Upholstery Co. v. Connors, 45 S.W.2d 892; Burman v. Vezeau, 85 S.W.2d 217, l. c. 221; Eutsler v. Mixon, 77 S.W.2d 655, l. c. 658; Paulette v. Sernes, 103 S.W.2d 573, l. c. 577; Watson v. Merrill, 136 F. 359, l. c. 363; In re Imperial Brewing Co., 143 F. 579, l. c. 581; In re O'Gara Coal Co., 260 F. 742, l. c. 744; Theobald-Jansen Elect. Co. v. Harry I. Wood Elect. Co., 285 F. 29, l. c. 30; In re Century Silk Mills, 12 F.2d 292, l. c. 296; In re Bush Terminal Co., 78 F.2d 662, l. c. 663; 2 Remington, Bankruptcy (3 Ed.), sec. 789, p. 187; 4 Remington, Bankruptcy (4 Ed.), sec. 1378, p. 14; 1 Remington, Bankruptcy (4 Ed.), sec. 536, pp. 663 to 665; In re Baker, 13 F.2d 707, l. c. 708; United States v. American Surety Co., 56 F.2d 734, l. c. 735; In re Dressler Producing Co., 262 F. 257, l. c. 260; Hersh v. United States, 68 F.2d 799, l. c. 803. (2) Under section 4 of the Bankruptcy Act as to who may become bankrupt, it provides "The bankruptcy of a corporation shall not release its officers, directors, or stockholders, as such, from any liability under the laws of a State or Territory or of the United States." See U. S. Code, Title 11, chap. 7, secs. 103, 104; Title 11, chap. 3, secs. 35, 22; Gilbert-Collier on Bankruptcy (4 Ed.), sec. 949, pp. 117, 351, 1007-1022. (3) 4 Remington on Bankruptcy (4 Ed.), sec. 1382, p. 18; 1 Remington on Bankruptcy (4 Ed.), sec. 437, p. 531; In re Wilson, 108 F. 197, l. c. 198; In re Erie Lumber Co., 150 F. 817, l. c. 824; In re Mitchell, 212 F. 932, l. c. 933; In re Howe, 235 F. 908, l. c. 909; Maryland Casualty Co. v. J. H. Parker Co., 279 F. 796, l. c. 797; Johnson v. Collier, 225 U.S. 538, l. c. 539-540; Gilbert's Collier on Bankruptcy (4 Ed.), secs. 1450, 1453, pp. 1169, 1172. (4) Authorities under Point 1. Danciger Oil Co. v. Smith, 276 U.S. 542, l. c. 545; Johnson v. Collier, 222 U.S. 538, l. c. 539; Christapherson v. Harrington, 118 Minn. 42, l. c. 45; Rand v. Ohio Central R. Co., 186 N.Y. 58, l. c. 60; Griffith v. Mutual Ins. Co., 119 Ga. 664, l. c. 665; Gilbert's Collier on Bankruptcy (4 Ed.), sec. 1450, p. 1169; 4 Remington on Bankruptcy (4 Ed.), sec. 1382, p. 18; 2 Remington on Bankruptcy (3 Ed.), sec. 789, p. 187. It may exercise all corporate functions and elect officers and directors. State ex rel. McCoy v. Farmer's Co-op. Packing Co., 50 S.D. 627, 211 N.W. 602, l. c. 603; In re O'Gara Coal Co., 260 F. 742, l. c. 744; In re Dressler Producing Corp., 262 F. 257, l. c. 260. It may borrow money, and is liable therefor upon dismissal of petition. Reiter v. Bierstein, 287 F. 429, l. c. 431. It may, in good faith, expend money for conducting its business. Hersch v. U. S. (C. C. A. 9th), 68 F.2d 799, l. c. 804. Its officers continue to function and its stockholders' rights are unaffected. U. S. v. American Surety Co., 56 F.2d 734, l. c. 735; In re Century Mills, 12 F.2d 292, l. c. 295; In re Bush Terminal Co., 78 F.2d 662, l. c. 663. It continues subject to a workmen's compensation award. State ex rel. Gannon v. Industrial Comm., 129 Ohio St. 194, 194 N.E. 369; In re Glory Bottling Co., 283 F. 110, l. c. 112; Theobald-Jansen Co. v. Wood Co., 285 F. 29, l. c. 30; Brookline C. & P. Co. v. Evans, 163 Mo.App. 564, l. c. 571-576.

BENNICK, C. Hostetter, P. J., and Becker, J., concur; McCullen, J., absent.

OPINION

BENNICK, C.

This is an action in eight counts by which plaintiff, T. P. Shumake, the former superintendent of defendant Basic Metals Mining Corporation (then known as Ozark Lead Mining Corporation), has sought to recover from the mining corporation and defendant M. C. Rhodes, its president, certain sums by way of salary and wages alleged to have been earned by plaintiff and some seven of his fellow employees in protecting and conserving the mining corporation's properties at Annapolis, Missouri, for the period from December 17, 1931, when the corporation filed its voluntary petition in bankruptcy and was adjudicated a bankrupt by the United States District Court for the Eastern Division of the Eastern Judicial District of Missouri, until May 24, 1932, the date of the appointment of the trustee in bankruptcy.

By the first count of his petition plaintiff sought to recover the salary due him, computed at the rate of $ 250 a month, under a contract of employment allegedly entered into with defendants on December 18, 1931, the day following the mining corporation's adjudication in bankruptcy.

By the second count of his petition he sought to recover, as assignee of one Hawkins, the salary due the latter, computed at the rate of $ 150 a month, under a contract of employment allegedly entered into by Hawkins with defendants at the time and under the conditions as set forth in the first count with respect to plaintiff's own employment.

By the six remaining counts of his petition he sought to recover, as assignee of certain laborers, Kimmel, Ivester, Amos Jenkins, Winfred Shumake, Duncan, and Raymond Jenkins, respectively, the wages due them, computed at specified rates per hour, under alleged contracts of employment by defendants for services to be performed by said laborers within the period covered by plaintiff's own employment.

The joint answer of defendants, after certain formal admissions with respect to the institution and prosecution of the bankruptcy proceeding, was a general denial, followed by the allegation that during the pendency of the bankruptcy proceeding, plaintiff and each of his assignors had filed their respective claims in said proceeding for the services alleged to have been performed by each of them during the periods referred to in the petition; that while their respective claims were pending and undisposed of, plaintiff and each of his assignors, on February 10, 1933, for a valuable consideration, had assigned to defendant Rhodes, as agent for persons who were then undertaking to refinance the mining corporation, all of their right, title, and interest in and to any and all claims that each of them had against the mining corporation or its bankrupt estate; that thereafter plaintiff and each of his assignors caused to be presented to the bankruptcy court a writing signed by each of them along with other creditors of the bankrupt, declaring their willingness that the adjudication in bankruptcy be set aside and the bankruptcy proceeding discontinued and dismissed in accordance with the bankrupt's motion for the dismissal of the proceeding, in which motion it was...