State ex rel. Wurdeman v. Reynolds
| Decision Date | 28 June 1918 |
| Citation | 204 S.W. 1093,275 Mo. 113 |
| Parties | THE STATE ex rel. G. A. WURDEMAN, Judge of Circuit Court, and SHERMAN E. SMALLEY et al., v. GEORGE F. REYNOLDS et al., Judges of St. Louis Court of Appeals, and STERNS TIRE & TUBE COMPANY et al |
| Court | Missouri Supreme Court |
Writ granted.
Albert D. Nortoni and A. E. L. Gardner for relators.
(1) It is manifest on the face of the petition, that the amount in dispute exceeds the sum of $ 7500, and therefore such suit is within the supervisory control and appellate jurisdiction of the Supreme Court. The St. Louis Court of Appeals therefore was and is without jurisdiction to issue or entertain its prohibition against the circuit court in which the suit was then pending. State ex rel. Union Electric Light & Power Co. v. Reynolds, 256 Mo. 710; State ex rel. Sale v Nortoni, 201 Mo. 1; State ex rel. Blakemore v Rombauer, 101 Mo. 499; State ex rel. Rogers v Rombauer, 105 Mo. 103. (2) It is the settled law, that upon the state of the record in the court of first instance depends the question as to whether the Court of Appeals or the Supreme Court has jurisdiction. State ex rel. Union Electric Light & Power Co. v. Reynolds, 256 Mo. 710; Bates v. Werries et al., 196 S.W. 1124; Bowles v. Troll, 262 Mo. 377. This is the rule deduced and announced by the St. Louis Court of Appeals in Gartside v. Gartside, 42 Mo.App. 513, 113 Mo. 348; Evens-Howard Fire Brick Company v. St. Louis Smelting Co., 48 Mo.App. 634; Evens-Howard Fire Brick Company v. St. Louis Smelting Co., 48 Mo.App. 636. (3) The par value of the stock owned by plaintiffs, under the averments of the petition, fix the amount in dispute at $ 8300, at any rate and in any view of the case. Robinson v. West Virginia Loan Co., 90 F. 770. In a suit by stockholders for the appointment of a receiver of a corporation, the amount in dispute may also be ascertained by reference to the value of the corporate assets, for the receiver takes title to such assets and property when such is the decree. Towl v. American Building Loan & Inv. Co., 60 F. 131; Thompson v. Greeley, 107 Mo. 577; High on Receivers (4 Ed.), Secs. 121 and 121a. (4) Irreparable loss and damage means that injury or loss cannot be compensated -- that is, of course, a total loss. 23 Cyc. 356. (5) "The plaintiff may have under the prayer for general relief any relief he shows himself entitled to and which is also consistent with the petition." Munenks v. Bunch, 90 Mo. 500; Newham v. Kenton, 79 Mo. 382; McGlothin v. Hemery, 44 Mo. 350. The courts are liberal in their construction of pleadings for an accounting and the bill or complaint will be upheld when the allegations substantially make out a case." 1 Ency. Plead. & Prac. 97. "The pleading should be construed in its plain and ordinary meaning, according to the object of the bill, and such an interpretation given it as fairly appears to have been intended by its author." Stilwell v. Hamm, 97 Mo. 579; Hickory Co. v. Fugte, 143 Mo. 71; Davis v. Jacksonville Line, 126 Mo. 78. Such, too, is the sense of the statute. Sec. 1831, R. S. 1909. (6) The directors and officers of a corporation occupy a fiduciary relation toward the shareholders and are treated in equity as trustees for them. 10 Cyc. 887; Chouteau v. Allen, 70 Mo. 290; Keokuk Packet Co. v. Davidson, 95 Mo. 467. Therefore, such directors and officers are not permitted to deal at once for the corporation and themselves and will be required to account, if they do so. 10 Cyc. 789; Keokuk Packet Co. v. Davidson, 95 Mo. 467. Such directors and officers are not permitted to secure to themselves an advantage not common to all shareholders, nor make a secret profit, and, if they do, they are required to account to the corporation and its shareholders. 10 Cyc. 791-792; Keokuk Packet Co. v. Davidson, 95 Mo. 467.
Morton Jourdon, Geo. C. Mackay and W. G. Carpenter for respondents.
(1) The Court of Appeals has jurisdiction because the case, as presented by the petition in the trial court, in no manner discloses facts which show that the "amount in dispute" exceeds its statutory jurisdiction of $ 7500. R. S. 1909, sec. 3937; Bates v. Werries, 196 S.W. 1124; Bowles v. Troll, 262 Mo. 377. (2) The allegations in the petition urged as the basis for an accounting give no data sufficient to show that the "amount in dispute" exceeds the jurisdiction of the Court of Appeals. Albers v. Moffett, 262 Mo. 645; Kocurek v. Matychowiak, 185 S.W. 740. (3) There is nothing in the record which discloses any legal basis for showing that the monetary value of the injunction or other equitable relief sought in the petition exceeds the jurisdiction of the Court of Appeals. Gast Bank Note Co. v. Fennimore Assn., 147 Mo. 557. (4) "It is always a suspicious circumstance where a single stockholder, among a large number of a corporation, rushes into a court of equity to vindicate, unaided and alone, the rights of the corporation and all other stockholders; and especially is this so, where the amount of stock owned by him is so very limited that in case of success his own share of the recovery will be so small as to make the maxim de minimis non curat lex very properly applicable" Sawyer, J., in Dan Meyer v. Coleman, 11 F. 97). Benedict v. Western Union, 9 Abb. New Cases, 214; Albers v. Exchange, 45 Mo.App. 206.
OPINION
In Banc.
Prohibition.
This is a proceeding in prohibition against the judges of the St. Louis Court of Appeals, the Sterns Tire & Tube Company, William L. Burgess, Otto L. Menzing, Adam M. Joerder and Arthur E. Koerner.
A bill in equity had been filed in the circuit court of St. Louis County by Sherman E. Smalley and Ephrim S. Garrett, relators herein, against the corporation and the individuals who are respondents here. These respondents sued out a writ of prohibition in the St. Louis Court of Appeals to prevent the hearing and determination of the said bill in equity. After the issuance of the preliminary writ of prohibition by the Court of Appeals, the action at bar was instituted to prevent further interference by the Court of Appeals with the suit in equity, on the ground of a lack of jurisdiction. The respondents' answer was in the nature of a demurrer. Upon these pleadings, after argument, the case was submitted.
The bill in equity is set out at length in the petition for prohibition filed herein. The material allegations of same having been admitted by respondents' demurrer, constitute the facts for the determination of relators' right to a permanent writ. Such allegations therefore, as are necessary to an understanding of the case, and are determinative of the Court of Appeals' jurisdiction, will be embodied in the statement of facts.
Hon. Gustavus A. Wurdeman is one of the judges of the circuit court of St. Louis County. The bill in equity was filed in his division of that court. When the writ of prohibition was sued out in the Court of Appeals he was named therein as one of the respondents. Hence, his appearance as one of the relators in the case at bar. The relators, other than Judge Wurdeman, are Sherman E. Smalley and Ephrim S. Garrett. Their interest in the proceeding is as stockholders in the Sterns Tire & Tube Company, the corporation respondent. Smalley owns 28 shares of the capital stock of same, and Garrett 55 shares. Each of these shares has a par value of $ 100, or a total value of $ 8300. It was to protect their respective interests as stockholders of said corporation that the suit in equity was instituted.
Of the respondents, Burgess is the president of the said corporation; Menzing is its vice-president and sales manager; and these two, with Joerder and Koerner, are the sole directors.
The corporation was organized in the State of Delaware, with a capital stock of one million dollars, divided into ten thousand shares of the par value of $ 100 each. Soon after its organization, it was authorized to do business in Missouri. It maintains its chief office or place of business in St. Louis County, where it owns and occupies in the transaction of its business about four and one-half acres of land, with buildings thereon, and machinery, goods, wares, merchandise, books and papers, of the value of $ 25,000.
The petition or bill in equity charges at great length and with much particularity, that Burgess, the president, who is paid, as such, a salary of $ 10,000 per year, directs and dominates the other directors and thereby has the complete control of the business and affairs of the corporation; that the management of same by said Burgess and the other directors is characterized by deceit, fraud and waste, in disregard of the best interests of the corporation, and to the damage and irreparable loss of all its stockholders, except its directors; that for a number of years the statements made by these directors of the business affairs of the corporation show that it is being conducted at a great loss during each month and year covered by the term specified, up to the date of the filing of said bill, and that it has no income except that arising from the sale of its stock. This is followed by the usual formal allegations of a lack of other adequate remedy, the necessity for the protection of all of the stockholders, of the appointment of a receiver, an accounting, and for such other and further orders, etc., as may be necessary within the authority of the court.
As is evident from the character of the pleading of respondents the issuance of the writ herein, except incidentally, is not questioned on account of the technical insufficiency of the petition or bill. It is contended, in effect, that what it does show,...
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