Star-Times Pub. Co. v. Buder

• Citation: 245 S.W.2d 59
• Decision Date: 10 December 1951
• Docket Number: No. 42354,No. 1,STAR-TIMES,42354,1
• Parties: PUBLISHING CO. v. BUDER et al
• Court: United States State Supreme Court of Missouri

Page 59

245 S.W.2d 59

STAR-TIMES PUBLISHING CO. v. BUDER et al.

No. 42354.

Supreme Court of Missouri, Division No. 1.

Dec. 10, 1951.

Motion for Rehearing or to Transfer to Court en Banc Denied

Jan. 14, 1952.

Opinion Modified on Court's own Motion Jan. 14, 1952.

Eugene H. Buder, Martin, Peper & Martin, Christian B. Peoper and Malcolm W. Martin, all of St. Louis, for appellants.

Richard O. Roberts, St. Louis, for respondent.

LOZIER, Commissioner.

Plaintiff-respondent's declaratory judgment action was one of interpleader involving ownership of stock of plaintiff corporation. Defendants-appellants are: Oscar E. Buder; his wife, Eugenia H. Buder, individually and as the registered owner of the stock as trustee; their son, Eugene H. Buder; and their daughters, Susan Buder Horan and Antonia L. Wiegand. Defendants-respondents are G. A. Buder, brother of Oscar E. Buder, and the Acreage Realty Co., a corporation. The appeal is properly here because of the amount involved. Sec. 3, Art. V, 1945 Const.

The primary question is: For whom was Eugenia H. Buder trustee? A rather lengthy statement of facts is necessary. The trial court's rulings can be better stated after a partial factual statement.

G. A. Buder and Oscar E. Buder were stockholders and directors of the American Press, a corporation, owner of the St. Louis Times. The American Press and the Star-Chronicle, a corporation, owner of the St. Louis Star, were negotiating the transfer of the Times to the Star-Chronicle. In anticipation of such transfer, the American Press, in March, 1932, placed a $1,250,000 deed of trust upon most of its assets. The notes secured thereby are hereinafter referred to as the 'secured notes.'

By contract dated June 21, 1932, the Star-Chronicle purchased the Times, the plant and certain other assets of the American Press. The American Press was to furnish evidence that the properties were free of liens and encumbrances, other than that of the $1,250,000 deed of trust. The secured notes were to be deposited with the Star-Chronicle with power to release the trust deed and cancel the notes. The consideration was 5000 shares of Star-Chronicle second preferred stock, par value $100, to be delivered to the American Press or its assigns on or before July 1, 1934, if the latter had fully performed its obligations. Meantime, assignable interim certificates were to be issued. The American Press' charter was forfeited in 1934, and its statutory trustees are not parties to this suit. It was conceded that the contract was fully performed by the two corporations.

The secured notes and deed of trust were deposited on June 22, 1932. The secured notes 'were segregated and placed in separate envelopes each marked with the name of the intended holder, with the following names, and in the following amounts: G. A. Buder Jr., $270,000.00; G. A. Buder, $175,000.00; Pontiac Realty Company, $175,000.00; Arcadia Realty Company, $125,000.00; Arc Realty Company, $180,000.00; Arkmoreland Realty Company, $15,000.00; Susan R. Buder Estate, $25,000.00; Lydiade Investment Trust, $100,000.00; Eugenia H. Buder, Trustee, $110,000.00; Mercantile-Commerce Bank and Trust Company for Chase National Bank, $75,000.00.'

G. A. Buder had full authority from the American Press in the distribution of the 5000 shares and the interim certificates were issued in accordance with his directions. On July 20, 1932, he wrote the Star-Times to issue same as follows: G. A. Buder, Jr., 945; G. A. Buder, 875; Pontiac Realty Co. 612 1/2; Arcadia Realty Co., 437 1/2; Arc Realty Co., 630; Arkmoreland Realty Co., 52 1/2; Susan R. Buder Estate, 87 1/2; Lydiade Investment Trust, 350; Eugenia H. Buder, Trustee, 385; Mercantile-Commerce B. & T. Co., 150; G. A. Buder, Trustee, 475; total, 5000.'

G. A. Buder made no request for the issuance of certificates to either the American Press or to the Acreage Realty Co., one of the defendants-respondents herein. Acreage is a real estate holding corporation in which each Oscar E. Buder and G. A. Buder own a one-half interest. The Pontiac, Arcadia and Arc companies were holding corporations owned and controlled either by G. A. Buder or members of his family. The Susan R. Buder estate was that of the deceased mother of Oscar E. Buder and G. A. Buder in which each had a one-fourth interest. The Lydiade Investment Trust was a corporation formed (shortly before her death in August, 1930) by G. A. Buder's wife, Lydia D. Buder, G. A. Buder and their son, G. A. Buder, Jr. Mrs. Lydia D. Buder left her estate to this trust which was thereafter operated by and for the benefit of G. A. Buder and G. A. Buder, Jr. Oscar E. Buder and G. A. Buder had been attorneys for the Arkmoreland company, but neither had a financial interest in that corporation. The Mercantile-Commerce interim certificate for 150 shares was in payment of a fee.

In 1934, stock certificates were issued to the interim certificate holders designated by G. A. Buder on July 20, 1932, except: (a) In addition to the 350 shares for which it held interim certificates, Lydiade received 850 shares upon interim certificates issued to G. A. Buder individually, 117 upon interim certificates issued to G. A. Buder, Trustee, and 150 upon interim certificates issued to the Mercantile-Commerce; (b) 368 shares were issued to 8 individuals or concerns (apparently all American Press creditors) upon interim certificates issued to G. A. Buder as trustee. (After 1936, 200 of these 368 shares were transferred to G. A. Buder, 19 to G. A. Buder, Jr. and 6 to Lydiade.) As in the case of the interim certificates, no stock certificates were issued either to Acreage or the American Press.

The 7 certificates for the 385 shares issued to, and since carried on the Star-Times books in the name of 'Eugenia H. Buder, Trustee,' are those involved in this case. Between 1936 and 1944, the Star-Times paid dividends on this stock to 'Eugenia H. Buder, Trustee.' (Thereafter, up to and including January, 1946, such dividends were paid into court.) She expended these funds in the care, maintenance and education of her children. She included these dividends in income tax returns which she made as trustee for the children during their minority.

On June 22, 1940, Oscar E. Buder wrote a letter to the collector of internal revenue. Referring to the 1938 returns 'of Eugenia H. Buder, trustee for Eugene H. Buder, Susan R. Buder and Antonia Louise Buder,' he stated that 'they each own respectively the following property,' including '233 1/3 shares of pfd. stock of the Star-Times.' He stated: 'The original stock was given to them by me many years ago and put in the name of Eugenia H. Buder, Trustee, because of the minority of the children. There is no written trust agreement, but neither Mrs. Buder nor I have any right of disposition of said property, it being the absolute property of said children respectively.'

On April 9, 1943, Oscar E. Buder wrote the Star-Times, stating that the 7 certificates 'were carried in the name of Engenia H. Buder, trustee for Eugene H. Buder, Susan B. Horan (nee Buder) and Antonia Louise Buder because at the time of its issuance they were minors. * * *' He requested issuance of certificates in the names of Eugene H. Buder for 128 shares, Susan B. Horan for 128, and Antonia Louise Buder for 129.

In May, 1943, Oscar E. Buder filed with the Star-Times a certificate of exemption from federal taxes upon stock transfers. Exemption was claimed upon these grounds: (1) That the transfer was one from natural guardian to wards, then all of age; (2) that in fact no trustee-beneficiary relationship existed, there having been no trust agreement, written or otherwise; and (3) that the certificates were inadvertently issued in the name of Eugenia H. Buder, trustee, instead of Eugenia H. Buder, guardian of Eugene H. Buder, Susan R. Buder and Antonia Louise Buder, minors.

On April 17, 1943, G. A. Buder wrote Elzey Roberts, the Star-Times' president, stating that he had learned that the certificates issued in the name of Eugenia H. Buder, trustee, might be presented for transfer out of the name of the trustee. He requested that any such transfer be not made, stating that the stock 'is held for the benefit of parties directly interested in the same,' and that the trustee had no personal interest and, so far as he knew, did not claim to have any interest. He referred to the issuance of the interim certificate to Eugenia H. Buder, trustee, in 1932, the surrender of the interim certificate and the issuance of the stock to Eugenia H. Buder, Trustee, in 1934, and stated that the certificates 'have remained in her name for the benefit of the real parties in interest.' He said that the dividends had been paid to her 'without protest on the part of the writer, as the matter of dividend collections would eventually be adjusted in keeping with the amount collected and paid, and the rights of the respective parties in interest.' He referred to his letter of July 27, 1932, to Mr. Thomas Cobbs, as explaining 'the issuance of the certificates to a nominee at that time.' (The referred-to letter was not put in evidence.) 'No change was made from such instructions for the reason that no cause for doing so has presented itself until the above information came to the writer's attention.' He asked that the matter be kept 'strictly personal and confidential.'

On May 12, 1943, the Star-Times wrote G. A. Buder that it had no information as to who held the beneficial interest in this stock, asked him if he claimed any interest, beneficial or otherwise, therein, and, if so, to submit proof of such claim. To which, on May 17, 1943, G. A. Buder replied: 'The stock was originally issued to Eugenia H. Buder, Trustee, by direction of the writer as a matter of convenience, and neither Eugenia H. Buder nor any of the 3 children named had any interest in the stock represented by such certificates.' He asked the Star-Times to withhold payment of further...