Stinebaker v. National Restaurant Co.

• Decision Date: 20 October 1908
• Citation: 113 S.W. 237,133 Mo. App. 250
• Parties: STINEBAKER et al. v. NATIONAL RESTAURANT CO. et al.
• Court: Missouri Court of Appeals

113 S.W. 237

133 Mo. App. 250

STINEBAKER et al. v. NATIONAL RESTAURANT CO. et al.

St. Louis Court of Appeals. Missouri.

October 20, 1908.

1. CORPORATIONS (§ 249) — STOCKHOLDERS — LIABILITY FOR CORPORATE DEBTS—UNPAID STOCK—RIGHT TO SET OFF DEBT OF CORPORATION.

The holder of unpaid stock in a corporation against whom a judgment creditor of the corporation proceeds by motion for execution under the statute may set off against his debt a debt of the corporation to him which had accrued prior to the return nulla bona of an execution against the corporation.

2. CORPORATIONS (§ 269)—STOCKHOLDER—LIABILITY FOR CORPORATE DEBTS — UNPAID STOCK—SETTING OFF DEBT OF CORPORATION —EVIDENCE.

Evidence held to sustain a finding that cash furnished a corporation by the holder of partly unpaid stock, above what was credited on his stock, was advanced with the knowledge and consent of the managing officers of the corporation, and was treated by them as creating a debt of the corporation to the stockholder.

Appeal from St. Louis Circuit Court; O'Neill Ryan, Judge.

Action by George W. Stinebaker and others against the National Restaurant Company and another. From an order overruling a motion for an execution against one of the defendants as a shareholder in defendant company, plaintiffs appeal. Affirmed.

This appeal was taken from an order overruling a motion for an execution against respondent Reinhardt as a shareholder in the National Restaurant Company. The motion was filed after judgment had been given in favor of appellants for $4,250 in an action by them against the company and after return nulla bona of an execution on the judgment. Reinhardt held shares in the company of the par value of $100 each, and it is contended he was liable on these shares because he had not paid their face value to the company. The entire capital stock was $30,000 par value, divided into 300 shares, of which J. C. Hopkins, president of the company, held 165 shares, Reinhardt, the secretary and treasurer, 100, and Charles Blanchard, 10. It thus appears that 275 shares of the stock were held by these three men; but it was not shown who held the remaining 25 shares. The company was organized to take over a leasehold on certain premises near the site of the Louisiana Purchase Exposition or World's Fair in 1904, and conduct a restaurant on them. The lease was made by appellants Stinebaker and Early to J. C. Hopkins for a term running from April 15, 1904, to December 31, 1904, and for a rental of $20,000, of which Reinhardt guaranteed the payment of $15,000. Hopkins took possession of the premises and retained it until August, 1904, when, with the consent of the lessors, he transferred possession to the National Restaurant Company, assigned to it all his interest in the leasehold, and said company the evidence shows, assumed Hopkins' liability for the whole rent and also Reinhardt's liability on his guaranty for a portion of it. It is not definitely shown when the company was organized, or that its incorporation and occupation of the leasehold were contemplated at the time the lease was given to Hopkins; but there are circumstances going to show the company conducted business on the leased premises from the first. A resolution of the board of directors was adopted which treated the capital stock as fully paid by the leasehold; that is to say, the lease on the premises was treated as of the value of $30,000 and the stock issued as fully paid. What the actual value of the lease was, and whether it was greater or less than this sum, there is no evidence to prove; an important circumstance we think. Notwithstanding said resolution of the directors, Blanchard paid in cash $1,200 on accounts owed by the company for goods furnished to it in payment for his 10 shares of stock, and there was from the first an understanding among the principal shareholders named, supra, that Reinhardt should advance $5,000 in cash to pay for supplies to the company and its running expenses in part payment for his 100 shares. He advanced money from time to time as the exigencies of business required, and to keep the...