Stein v. National Bank of Commerce

• Decision Date: 04 January 1916
• Docket Number: No. 14710.,14710.
• Citation: 181 S.W. 1072
• Parties: STEIN v. NATIONAL BANK OF COMMERCE (MITCHELL et al., Interveners).
• Court: Missouri Court of Appeals

181 S.W. 1072

STEIN v. NATIONAL BANK OF COMMERCE (MITCHELL et al., Interveners).

No. 14710.

St. Louis Court of Appeals. Missouri.

January 4, 1916.

Rehearing Denied January 26, 1916.

Appeal from St. Louis Circuit Court; Geo. C. Hitchcock, Judge.

"Not to be officially published."

Action by Fannie Stein against the National Bank of Commerce, in which L. S. Mitchell and others intervened. From the judgment for plaintiff and denying their right to participation in the trust fund, interveners appeal. Affirmed.

Judson, Green & Henry, of St. Louis, for appellants. Edward D'Arcy, of St. Louis, for respondent.

ALLEN, J.

On January 10, 1900, the board of directors of defendant, National Bank of Commerce, pursuant, it is said, to authority conferred upon it by the stockholders of such corporation, passed a resolution creating an "employés' pension fund" and an "employés' participation fund" for the benefit of the officers and employés of said bank. By this resolution so-called "rules" governing and relating to such funds were promulgated. Sections 1 and 4 of this resolution are as follows:

"I. At the expiration of business on December 31st of each year, beginning with December 31st, 1900, the net earnings of the bank shall be ascertained, and after deducting therefrom losses, and a sum equal to six per cent. of the capital, surplus and undivided profits as the latter appeared at the beginning of the year, there shall be set apart a sum not to exceed six per cent. of the remaining net profits for the benefit of the employés' pension fund and a sum not to exceed four per cent. of said remaining net profits for the benefit of the employés' participation fund."

"IV. The board of directors reserve the right at any time to discontinue the annual appropriation for the pension fund. When said appropriation is so discontinued, the amount to the credit of said fund shall be held for the benefit of those officers and employés who at that time have been in the employ of the bank continuously for five years or more, in such manner as the board may determine; the apportionment of funds to be determined, as nearly as possible, on the same basis as the pensions would be figured were said fund to be continued; the apportionment shall be made by the president, first vice president and cashier, by a majority vote, and their decision shall be final."

It is unnecessary to notice other portions of this resolution further than to say that provision was made for the payment of "pensions" to officers or employés who after at least 5 years of continuous service should become physically disabled, or who for any reason other than neglect of duty should sever their connection with the bank after at least 25 years of continuous service.

The record discloses that defendant bank did make annual appropriations to the pension fund to and including December 31, 1912, and that on July 15, 1913, there was $26,652.80 in defendant's possession to the credit of this fund, together with 369 shares of the capital stock of defendant, of the par value of $100 each. On said last-named date, to wit, July 15, 1913, the board of directors of the bank passed the following resolution:

"Whereas, on the 10th day of January, 1900, there was created by resolution the `employés' pension fund' and the `employés' participation fund' for the benefit of the officers and employés of this bank; and

"Whereas, by said resolution creating the aforesaid `employés' pension fund' and the `employés' participation fund,' it was provided that the appropriations to said funds and to each of them was entirely voluntary and gratuitous on the part of the bank, and that the title to said funds should remain in the bank; and

"Whereas, it is now deemed expedient and for the best interest of the bank to abolish said `employés' pension fund' and `employés' participation fund,' and to discontinue all further appropriations to said funds and to each of them:

"Now, therefore, be it resolved that said `employés' pension fund' and said `employés' participation fund,' and each of them, be and they are hereby abolished, and that all further appropriations to said funds, and to each of them, be and they are hereby discontinued; and be it further resolved that no further payments of pensions or participations out of said funds, or either of them, shall hereafter be made to any officer or employé of this bank; and be it further resolved that the balance now standing to the credit of said funds, and each of them, be allowed to remain to the credit of pension fund account, until there can be had full consideration by the board."

Nothing further appears to have been done in the premises, so far as this record discloses, until April 14, 1914, when this action was instituted by plaintiff, who had formerly been in defendant's service, and who claimed to be entitled to participation in the fund and sought to have it brought into court. Her rights in the premises, however, are not involved in this appeal. Defendant in its answer made certain admissions, averring that it was in the position of a trustee as to said fund, and prayed the court to adjudge and determine by its decree "the question of the validity or invalidity of the creation of said pension fund, as to whether defendant's stockholders, or its employés or exemployés, are entitled to said pension [fund]," under the facts set forth in the answer.

On July 7, 1914, the court entered a decree in which, among other things, it found that the board of directors of defendant bank did, on July 15, 1913, discontinue the annual appropriation for the pension fund, and adjudged that the moneys and corporate stock comprising said fund were held by defendant as a trust fund for the benefit of those persons entitled to share therein under the terms of the "by-laws, rules, and regulations" promulgated by defendant in the premises. And the court ordered defendant to prepare and file with the clerk of the court "a list of the names of all persons who may, under the terms of said by-laws, rules, and regulations, be entitled to share in said fund, according to the books and records of defendant or other information available to defendant." And the court retained jurisdiction of the cause for the purpose of making such further orders as might appear to be necessary for the distribution of the fund and the disposition of the cause.

Thereafter the bank filed its report, in compliance with the order of court, and later filed a supplemental report. Among other things, not pertinent to the question now before us, the bank reported that a difference of opinion existed among its officers as to whether or not certain employés of defendant who entered its employment on or about the 14th day of November, 1908, were entitled to share in the benefits of the pension fund; said employés having formerly been employés of the Commonwealth Trust Company, of St. Louis, and having come into defendant's employ at the time when defendant acquired the "banking business" of said trust company on or about the date last mentioned. The contentions pro and con respecting the right of these employés to share in the benefit of the pension fund were set out in the bank's supplemental report. Such employés had not been in defendant's service for a period of five years on July 15, 1913, when defendant's board of directors undertook to discontinue the annual appropriation to the pension fund and to "abolish" said fund, but had been in defendant's employ for a period of more than five years on December 31, 1913, at which time, according to the contention of said employés, the resolution of July 15, 1913 became effective. And the bank, declaring that it was desirous only that justice be done to all persons entitled to share in said fund,...