St. Louis Stoneware Co. v. Partridge

• Decision Date: 13 January 1880
• Citation: 8 Mo.App. 217
• Parties: ST. LOUIS STONEWARE COMPANY, Respondent, v. STEPHEN PARTRIDGE, Appellant.
• Court: Missouri Court of Appeals

8 Mo.App. 217

ST. LOUIS STONEWARE COMPANY, Respondent,

v.STEPHEN PARTRIDGE, Appellant.

St. Louis Court of Appeals, Missouri.

Jan. 13, 1880.

1. The finding of a referee stands as the verdict of a jury, and where there is evidence from which the fact found may be inferred, the finding will not be disturbed in the appellate court on the ground that there is no direct testimony as to the fact found.

2. Where the president of a corporation, with other officers, bought stock for the corporation, and is sued for the unlawful conversion of the stock, he cannot set up the doctrine of ultra vires as a defence to the action.

APPEAL from the St. Louis Circuit Court.

Affirmed.

JAMES O. BROADHEAD, JOHN P. ELLIS, and JAMES E. WITHROW, for the appellant: The plaintiff had no power to hold stock in any other corporation, and the pretended purchase of such stock was ultra vires of the plaintiff.-- Matthews v. Skinker, 62 Mo. 329; Bank v. Harrison, 39 Mo. 433; Baird v. Bank, 11 Serg. & R. 411; Chataqua County Bank v. Risley, 4 Denio, 485; Bank of Michigan v. Niles, 1 Dougl. (Mich.) 401. The court may set aside the finding of a referee, and on the facts as presented by his report, find a different result, and enter up a decree accordingly.”-- O'Neil v. Capelle, 62 Mo. 203; Ely v. Ownby, 59 Mo. 437. The report of the referee must not be in conflict with the merits of the cause or the court's view of the law.--Edw. on Ref. 149; Scranton v. Baxter, 4 Sandf. 5. A referee's report will be set aside for error where the grounds are not explicitly stated by him, or error is apparent on the face of the record.--Edw. on Ref. 149; Smith v. Crews, 2 Mo. App. 269.

GEORGE DENISON and EDMUND T. ALLEN, for the respondent: In this action the defendant cannot invoke the doctrine of ultra vires as a defence.-- Grant v. Henry Clay Coal Co., 80 Pa. St. 208; Harrisburg, etc., R. Co. v. Grubs, 82 Pa. St. 36; Willamette Falls Co. v. Kittredge, 5 Reporter, 104; Mutual Life Ins. Co. v. Wilcox, 5 Reporter, 681; Martindale v. Kansas City, etc., R. Co., 60 Mo. 508; Baird v. Bank, 11 Serg. & R. 411.

HAYDEN, J., delivered the opinion of the court.

The present is one of three suits which, for the purpose of taking testimony, were consolidated and heard together before a referee. For a fuller statement of facts, reference is made to the opinion delivered in No. 1343, called the equity case. It is sufficient here to state that Merrick & Stickney, copartners, engaged in the stoneware business, and in December, 1865, they and the defendant organized a business corporation under the act of February, 1864, called the St. Louis Stoneware Company, of which the defendant became president and Stickney secretary. The three, as among themselves, treated this concern as their joint property, they being the only stockholders for a long time, and in dealing with the assets they acted as joint owners. The present suit is for the conversion of certain bank-stock of the plaintiff, the petition charging that in November, 1872, the plaintiff owned twenty-five shares in the Valley National Bank, worth $100 a share, which the defendant, as plaintiff's president, assigned to one Moses, as trustee, whereby the bank stock was lost, the defendant never accounting for the proceeds. The defendant denied these allegations, and set up defences which do not appear except from the referee's report.

The Stoneware Company appeared on the books of the bank to be the owners of the twenty-five shares, a certificate of which had been issued by the bank on January 3, 1872, and was in the custody of Merrick, or the firm, for several months. On December 20, 1872, this certificate was transferred to Moses, an employee of the bank, by indorsement, signed by the defendant as president of the Stoneware Company, authorizing Moses to transfer the stock on the book. On the same day the defendant, as president, executed on the stock-book of the bank an assignment to Moses, as trustee, reciting that $2,500 had been paid on the stock; this transfer being in trust for the bank, and being made for the purpose of paying a promissory note of $2,500 which was made by the firm of Merrick & Stickney, and indorsed by the defendant and held by the bank. This note represented, by renewals, the original note made by the firm and indorsed by the defendant, given for these shares of stock. The stock subscription, however, was made in the name of the plaintiff company by the three corporators, it being understood, when the subscription was made, that the bank would make the payment easy and carry the note for the stock.

It is contended by the defendant that there was no conversion of this bank-stock; that the plaintiff never paid for the stock out of its assets, and that the only way in which the shares were paid for was by the discount and renewal of the note, on which the defendant was either maker or indorser. But it is not open to the defendant to urge this objection, as the referee has found that the bank-stock was paid for with the plaintiff's assets, and was its property at the date of the transfer by the defendant to Moses. It matters not that no witness testifies that the bank-stock was so paid for with the plaintiff's assets and was its property at the date of the transfer by the defendant to Moses. It matters not that no witness testifies that the bank-stock was so paid for. That is a conclusion of fact, and it is sufficient that there is evidence from which it has been inferred, as a jury might have inferred it.

It is contended that it was ultra vires of the plaintiff corporation to hold stock in a national bank. But this the defendant cannot be heard to urge. The proposition, indeed, is not tenable that the State alone, and not private parties to a suit, can complain, where a corporation sues or defends on grounds inconsistent with its charter powers. Questions of public policy constantly intervene, and it is inconsistent with well-settled principles for courts to lend their aid in disregard of such questions. In a case,...