Wagner v. Binder

• Decision Date: 01 July 1916
• Docket Number: No. 17614.,17614.
• Citation: 187 S.W. 1128
• Parties: WAGNER v. BINDER et al.
• Court: Missouri Supreme Court

187 S.W. 1128

WAGNER v. BINDER et al.

No. 17614.

Supreme Court of Missouri, Division No. 1.

July 1, 1916.

Rehearing Denied July 18, 1916.

Appeal from Circuit Court, Cole County; J. G. Slate, Judge.

Action by Lena Wagner against Frederick H. Binder, administrator, and others. Judgment for plaintiff, and defendants appeal. Affirmed.

This suit was brought by the respondent against Frederick H. Binder, and others, to recover the sum of $9,352 damages sustained by her through the alleged fraud and deceit perpetrated by them upon her, in the sale by her of 167 shares of the capital stock of the Jefferson City Waterworks Company to Hugo Monnig. During the pendency of the suit said Binder died, and the suit, as to his estate, was revived in the name of his administrator. A trial was had before the court and jury, which resulted in a judgment for the respondent for the amount sued for. In due time and in proper form the appellants appealed the cause to this court.

The record is very voluminous, and the questions presented for determination are numerous; and the character of some of them, among others, that there is a departure between the pleadings and proof, and that the evidence did not establish the allegations of the petition, necessitate that those parts of the petition which charge the fraud and deception be set out, as well as the substance of the evidence pro and con, regarding such charges. But the statement of the case may be materially curtailed by first stating the undisputed facts; second, those parts of the petition charging fraud and deception; and, third, the substance of the respondent's evidence introduced regarding the controverted facts. Before doing that, however, it should be stated that the pleadings are unusually lengthy, and in order to shorten the statement of the case as much as possible, and still comply with the mandate of section 2088, R. S. 1909, I have adopted the above arrangement.

The undisputed facts are as follows:

The Jefferson City Waterworks Company (which will hereinafter be designated as the Water Company) was duly incorporated under the laws of this state in the year 1888, with its office and place of business at Jefferson City, and with a capital stock of $100,000, divided into 1,000 shares of the par value of $100 each. On June 27, 1908, the capital stock of the Water Company was duly increased from $100,000 to $135,000, in the manner, for the purpose, and with the limitations as stated in the following minutes of the records of the board of directors of the company, viz.:

                    "Jefferson City, Missouri, June 27, 1908
                            "Directors' Meeting
                

"At a meeting of the board of directors of the Jefferson City Waterworks Company, held this day pursuant to adjournment, there were present F. H. Binder, F. C. Binder, W. A. Dallmeyer, Fred Knaup, W. J. Edwards (Victor Wagner written in lead pencil on margin), and J. C. Fisher, a quorum of said board. Absent: none.

"The proceedings of the stockholders' meeting held June 27, 1908, was laid before the board by the president of the company, Mr. F. H. Binder.

"The following resolution was offered by J. C. Fisher and duly seconded, to wit:

"Whereas, it was voted by the stockholders of this company at its meeting held June 27th to increase the capital stock of this company from $100,000 to $135,000; and

"Whereas, this company has ascertained, as shown by its records, that the paid in value of the assets of this company amount to $287,250; and

"Whereas, notwithstanding the fact that said increased capital of $35,000 now fully paid up by such surplus assets, it is the desire of the board of directors that said increased capital stock shall not be issued and distributed, but that it be reserved as treasury stock to be hereafter sold at such price for cash as the board of directors may from time to time determine: Therefore be it

"Resolved, Fred H. Binder, as trustee, be and he is hereby authorized, empowered, and directed to subscribe for said $35,000 of stock, being 350 shares of the par value of $100 each; and that said stock be credited upon the books as fully paid up out of the surplus assets, and that said stock be issued to Fred H. Binder, as trustee, without personal liability as fully paid-up nonassessable; and

"Resolved, further, that said Fred H. Binder turn said shares over to the treasurer of this company to be held by him in trust for the use and benefit of this corporation of providing additional and necessary funds for the future addition and improvements; and

"Resolved, further, that said certificate shall not be transferred until all or part of said shares shall be ordered sold, and when so ordered sold by the board of directors at such price per share as the board shall name. Each stockholder of this company shall have the option and privilege of purchasing the pro rata number of shares as his or her shares shall bear to the whole number of shares now issued and outstanding; provided, however, if said option to purchase is not exercised within 30 days from the date of the order of the board offering said stock and cash paid for said shares, then said stock may be sold to other stockholders at the price named therefor, and if not taken by other stockholders, then the same shall be sold in open market, but said shares shall not be sold for less than $25 per share, and the money realized from the sale of all such treasury stock shall be paid to the treasurer of the company — which resolution was adopted.

"The president next reported that the 350 shares had been subscribed for by F. H. Binder as trustee, and thereupon a motion was made and adopted that the stock be issued to him fully paid up and nonassessable when increase of stock has been duly certified."

As a matter of fact, this 350 shares of stock had never been issued, as I understand the record, but that is wholly immaterial; because, if issued, they were never sold, delivered, or transferred to any one, but remained in the hands of the treasurer of the company at all times.

The deceased, Frederick H. Binder, was the principal promoter of the Water Company and was the owner of 709 shares of the stock of the company. W. W. Wagner was the owner of 167 shares, W. J. Edwards and the Edwards estate owned 114 shares, and W. A. Dallmeyer and E. W. Cox owned 5 shares each, making a total of 1,000 shares. Some years prior to the matters complained of in this suit said W. W. Wagner departed this life, and through proper legal proceedings, the respondent, his widow, became the owner of his stock. For many years prior to his death, Frederick H. Binder had been a resident of Jefferson City, and had from the date of the incorporation of the Water Company been a member of its board of directors, as well as the president and general manager of the same. His son was the assistant manager.

Thomas & Co. were also old residents of Jefferson City, and for many years had been engaged in real estate, brokerage, and were general promoters of business deals. Prior to March 24, 1911, Thomas & Co. conceived the idea of negotiating a sale of the Water Company to some third party, not clearly identified at that time. On the last-mentioned date they procured from Binder a written authority to sell his stock, within 120 days, at the price of 80 cents on the dollar, less 5 per cent. commission for making the sale. On May 13, 1911, Thomas & Co. also procured from the respondent written authority to sell her stock within 70 days, at the price of 80 cents on the dollar, less 5 per cent. commission for making the sale. Said written authority was in the following words and figures, to wit:

"Jefferson City, Missouri, May 13, 1911.

"In consideration of $1 to me paid, the receipt of which is hereby acknowledged, I give to Thomas & Price, Agents, an option on my shares of stock in the Jefferson City Waterworks Company at $80 per share, consisting of the sum of 167 shares, and agree to pay them a commission of 5 per cent. for handling same, this option to be in force and effective for a period of 70 days from date. I also agree to assist Thomas & Price in any way that they may request in effecting a sale of the property, and also agree to resign as officer and director in said company if a sale is consummated. This option is void unless the 114 shares owned by the heirs of J. R. Edwards is taken in conjunction with mine.

                  "[Signed]             Lena Wagner."
                

The Binder authority mentioned was lost or destroyed by him before the trial, and was not introduced in evidence; but the uncontradicted evidence shows that it was exactly the same in language as the Wagner authority just copied, with the exception of the dates, amounts, name, and the last clause thereof, which was inserted at the suggestion of Wagner and Edwards. Dallmeyer executed a similar authority, except it authorized the sale of his 5 shares at 60 cents on the dollar, less 5 per cent. commission. No authority was obtained from Cox, nor was his stock sold. George W. Wagner was the son and duly constituted agent of the respondent, and as such represented her in all of the negotiations and transactions regarding the sale of her stock.

On May 25, 1911, all of the stock of the Water Company was sold to Monnig, for the sum of $136,000, with the exception of the five shares owned by Cox, the value of which was deducted from the purchase price. Four or five days prior to said sale to Monnig, Thomas & Co. surrendered to Binder the written authority he had given them to sell his stock for 80 cents on the dollar, less 5 per cent. for commission. The respondent and Edwards were paid $80 respectively for each share of their stock, the former amounting to $13,360 and the latter to $9,120, less 5 per cent. commissions for making the sale. Dallmeyer was paid 60 cents on the dollar for his 5 shares, amounting to $300, less 5 per cent. commission, and Binder sold his 709 shares at a fraction over $134 per share, amounting to...