State ex rel. Raleigh Investment Co. v. Allen
| Decision Date | 08 June 1922 |
| Citation | 242 S.W. 77,294 Mo. 214 |
| Parties | THE STATE ex rel. RALEIGH INVESTMENT COMPANY v. WILLIAM H. ALLEN et al., Judges of St. Louis Court of Appeals |
| Court | Missouri Supreme Court |
Temporary writ quashed.
John A Gilliam for relator.
(1) The pleading of defendant Cureton was that he was an innocent purchaser in the open market, which he absolutely failed to sustain, wherefore the judgment in his favor should be quashed. Farrington v. South Boston Railroad, 150 Mass. 410; St. Louis Ins. Co. v. Goodfellow, 9 Mo 153; Erskine v. Lowenstein, 82 Mo. 306; Keystone Bridge Co. v. McCluney, 8 Mo.App. 501; Gillett v Chicago Trust Co., 230 Ill. 412; Trust Co. v. McMillan, 188 Mo. 568; Merc. Mut. Ins. Co. v. Hope Inv. Co., 8 Mo.App. 408; Lee v. Smith, 84 Mo. 304; DeWitt v. Perkins, 22 Wis. 473; Hoppin v. Doty, 25 Wis. 573; Rogers v. Mining Co., 185 Mo.App. 675; Halsa v. Halsa, 8 Mo. 308-309; Stephenson v. Kilpatrick, 166 Mo. 268. (2) Holdsworth v. Shannon, 113 Mo. 525; Stephenson v. Kilpatrick, 166 Mo. 268. Cureton absolutely fails to prove want of notice. Conn. Mut. Life Ins. Co. v. Smith, 117 Mo. 292; Stuart v. Ramsey, 196 Mo. 415. (3) The referee and the circuit court were right in holding that Cureton had actual and constructive notice of the infirmity of Evans's rights and the extent of his frauds, and that at least eighty per cent of the stock was unpaid for. Ford v. Ellison, 230 S.W. 641; Conn. Mut. Life Ins. Co. v. Smith, 117 Mo. 293. "The charter of a company formed under the general law consists not only of its articles of association, but also of the general statutes of the State under which the organization takes place." Cook on Corp. (5 Ed.) sec. 2; People v. Chicago Gas T. Co., 130 Ill. 268; Bixier v. Summerfield, 195 Ill. 147; Bent v. Underdown, 156 Ind. 516. He was presumed to know the provisions of its charter and by-laws, and the requirements and prohibitions of the statute under which it was organized. 14 C. J. p. 845, sec. 1285. (4) The decision of the Court of Appeals is in conflict with the case of Raleigh Investment Co. v. Bunker, reported in 227 S.W. 121. (5) Numerous authorities hold that the fact that stock certificates recite that the stock is "fully paid and non-assessable," furnishes no protection to assignees as against corporate creditors. Sprague v. National Bank, 172 Ill. 149; Coleman v. Howe, 154 Ill. 458; Alling v. Wenzel, 133 Ill. 264; 14 C. J. sec. 1596, note 99; Hess W. & V. Co. v. Burlington Grain Co., 217 S.W. 493.
Jesse McDonald and Arnold Just for respondents.
(1) This being a proceeding in equity, it was the duty of the Court of Appeals to review the evidence de novo and to direct the entry of a judgment conforming thereto. State ex rel. v. Wilson, 232 S.W. 140; St. Louis v. Parker-Washington Co., 271 Mo. 229; Raleigh Inv. Co. v. Bunker, 227 S.W. 121; Erskine v. Lowenstein, 82 Mo. 305. (2) There is no conflict between the decision of the Court of Appeals and those of the Supreme Court, because: (a) Cureton was a bona-fide purchaser of the stock without knowledge that it was partly unpaid and, therefore, is not liable. Raleigh Inv. Co. v. Bunker, 227 S.W. 121; Keystone Bridge Co. v. McCluney, 8 Mo.App. 496; Berry v. Rood, 168 Mo. 316; Cook on Corporations, sec. 257; Skrainka v. Allen, 76 Mo. 384; Erskine v. Lowenstein, 82 Mo. 301; Meyer v. Ruby Co., 192 Mo. 162; Bonet Const. Co. v. Central Am. Co., 153 Mo.App. 185. (b) The Supreme Court will refer only to the opinion of the Court of Appeals for the facts in the case. State ex rel. Commonwealth Tr. Co. v. Reynolds, 278 Mo. 695; State ex rel. U. Rys. Co. v. Reynolds, 257 Mo. 19; State ex rel. Bush v. Sturgis, 281 Mo. 598; State ex rel. Dunham v. Ellison, 278 Mo. 649. (c) Even if the Court of Appeals were mistaken in holding Cureton to be a bona-fide purchaser, the mistake would not be one that the Supreme Court would correct on certiorari. State ex rel. Calhoun v. Reynolds, 233 S.W. 483.
Higbee, P. J., dissents.
Certiorari.
-- Certiorari to review the opinion and quash the judgment of the St. Louis Court of Appeals in the case of Raleigh Investment Company, a corporation, respondent, v. P. H. Cureton, appellant; unofficially reported in 232 S.W. 766. That opinion was filed on June 7, 1921, and reversed the judgment of the Circuit Court of the City of St. Louis. The proceeding there was under Section 9764, Revised Statutes 1919.
Relator, as a creditor, had brought its action against the Bismarck-Bellevue Valley & Western Railway Company, a Missouri corporation; had recovered judgment; and upon a nulla bona return, upon execution, filed its motion and served its notice upon the said appellant Cureton for execution against him for the unpaid balance on stock owned by him.
It was charged in said motion that the said Cureton was the owner of forty-six shares of the stock of the said railroad company of the par value of one hundred dollars, and that ninety per cent thereof remained unpaid.
Defendant Cureton admitted he was a stockholder of said company, but said that he acquired fifteen shares of said stock from one E. E. Evans on the 5th of April, 1912; that he purchased the same under the belief that such shares were fully paid up, and that he had no knowledge or notice of anything to the contrary, and believed and continued to believe that such shares were fully paid and non-assessable, as recited on the face of the certificates. On this return an issue was made up by the reply of relator.
The circuit court ordered a reference and appointed Frank A. Thompson referee, with power to try all of the issues and report all findings and proceedings to the court. Upon a hearing the referee recommended that plaintiff's (relator's) motion be sustained, and that execution be issued against the defendant (appellant) to collect the sum of thirty-six hundred and eighty dollars, being the amount remaining unpaid on forty-six shares owned by defendant.
Defendant Cureton filed his exceptions to the report, and upon a confirmation thereof duly prosecuted his appeal to the St. Louis Court of Appeals. That court, in the opinion filed by Commissioner Bruere, now under review, reversed the judgment against appellant Cureton, and remanded the cause with directions to enter up judgment for him.
Relator now seeks a review of that opinion upon the ground that it is in conflict with certain previous pronouncements of this court, and particularly in conflict with the opinion in Division Two of this court in the case of Raleigh Investment Co. v. Bunker, 285 Mo. 440, 227 S.W. 121. The latter case was a companion case of the one under consideration, being a proceeding under the same statute against another stockholder of the same corporation, but involving a sum within our jurisdiction. This court affirmed a judgment against the stockholder in the Bunker Case, upon the ground that such stockholder had notice that the stock purchased and owned by him from the organizer of the corporation had not been fully paid.
Other pertinent facts as we gather them from the opinion under review will be stated hereafter. The Court of Appeals reviewed the case as if triable de novo in that court and made its own findings and reached its own conclusions, and being an equitable action that was proper. [Ford v. Laughlin, 226 S.W. 911; Claybrook v. Saulsberry, 204 S.W. 60 (Mo) .]
For the purposes of this case we may concede that the Court of Appeals erred in its findings of fact, and yet that does not warrant a review by this court. The Court of Appeals alone had jurisdiction of the appeal, and sitting as a court of conscience upon the facts before it, it could make such findings of fact as may have seemed correct without interference or supervision. It is a court of last resort and we are only concerned that its conclusions of law do not conflict with the latest pronouncement of this court upon the same or a similar state of facts. [State ex rel. Chicago & Alton R. R. Co. v. Allen, 236 S.W. 868; State ex rel. Continental Ins. Co. v. Reynolds, 235 S.W. 88; State ex rel. Calhoun v. Reynolds, 233 S.W. 483; State ex rel. American Packing Co. v. Reynolds, 230 S.W. 642.]
And in our review we do not extend our inquiry beyond the opinion and any pleading, instruction or written instrument referred to therein. [State ex rel. Continental Ins. Co. v. Reynolds supra; State ex rel. Kansas City v. Ellison, 281 Mo. 667, 220 S.W. 498; State ex rel. Hayes v. Ellison, 191 S.W. 49.]
We must therefore take the facts as stated in the opinion under review and ascertain whether or not upon those facts the Court of Appeals announced some conclusion of law contrary to the last previous rule of this court upon the same or a similar state of facts. It is not our province to determine whether the Court of Appeals erred in its findings of fact, or even in its application of rules of law to the facts stated in the opinion, but only whether upon such facts it announced a conclusion of law in conflict with the latest pronouncement of this court. [State ex rel. Continental Ins. Co. v. Reynolds, 290 Mo. 362, 235 S.W. 88.]
Upon the assignment of error under discussion there is nothing for this court to review as the Court of Appeals was justified in making the findings it did upon the facts stated in the opinion. We quote from the opinion:
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