Webster v. Joplin Water Works Company

• Citation: 177 S.W.2d 447
• Decision Date: 03 January 1944
• Docket Number: No. 38370.,38370.
• Parties: OSCAR F. WEBSTER, SUSIE WEBSTER, and HAZEL MOUNTS, Trustees of the SOUTHWEST MISSOURI WATER WORKS COMPANY, a Dissolved Corporation, Appellants, v. THE JOPLIN WATER WORKS COMPANY, a Corporation.
• Court: United States State Supreme Court of Missouri

177 S.W.2d 447

OSCAR F. WEBSTER, SUSIE WEBSTER, and HAZEL MOUNTS, Trustees of the SOUTHWEST MISSOURI WATER WORKS COMPANY, a Dissolved Corporation, Appellants, v. THE JOPLIN WATER WORKS COMPANY, a Corporation.

No. 38370.

Supreme Court of Missouri.

Division Two, January 3, 1944.

Rehearing Denied and Motion to Transfer to Banc Overruled, February 7, 1944.

Appeal from Barton Circuit Court. — Hon. Thos. W. Martin, Judge.

AFFIRMED.

Samuel L. Trusty, Louis N. Wolf and J. Carroll Combs for appellants.

(1) Officers and directors of a defunct corporation become the statutory trustees and the corporation's legal representatives with authority to institute and prosecute suits. Sec. 5036, R.S. 1939; Watkins v. Mayer, 103 S.W. (2d) 569; Eberle v. Koplar, 85 S.W. (2d) 919. (2) The plaintiffs, as trustees of the Southwest Missouri Water Works Company, a dissolved corporation, were real parties in interest, since Oscar F. Webster, whom defendant claims was the owner of the property and business of the water utility at the time it was damaged and destroyed, assigned whatever rights he had to sue for such damage to the plaintiffs. Such an assignment was made after the property in question was destroyed by defendant, after such property had ceased to be public utility property, and after such cause of action had arisen for the destruction of such property and business. Wheless v. Meyer & Schmidt Grocer Co., 120 S.W. 708; Honey Creek Drainage Dist., etc., v. Sampson, 5 S.W. (2d) 119; Green v. Powell, 46 S.W. (2d) 915; Secs. 98, 5651, R.S. 1939; State ex rel. Park Natl. Bank. v. Globe Ind. Co., 29 S.W. (2d) 743; Dearborn Elec. L. & P. Co. v. Jones, 7 Fed. (2d) 806. (3) The proceedings before the Public Service Commission show that the Commission did authorize Webster to transfer, etc., his water utility to the Southwest Missouri Water Works Company, and, thereafter, the Commission recognized and dealt with the Southwest Missouri Water Works Company as the operating utility. State ex rel. City of Sikeston v. Public Serv. Comm., 82 S.W. (2d) 105; Sec. 5657, R.S. 1939. (4) An objection that the transfer of the utility to the Southwest Missouri Water Works Company was void can be raised only by the state or as provided by the Missouri statutes. Webster Mfg. Co. v. Byrnes, 280 Pac. 101; Secs. 5686, 5689, 5694, 5703, R.S. 1939; State ex rel. v. Buzard, 168 S.W. (2d) 1044; Otter Tail Power Co. v. Clark, 229 N.W. 915; State ex rel. St. Louis v. Public Serv. Comm., 73 S.W. (2d) 393; A.W. Mendenhall Co. v. Booher, 48 S.W. (2d) 120; Boatmen's Bank v. Gillespie, 108 S.W. 74; Bank v. Rockefeller, 195 Mo. 15, 93 S.W. 761; Proctor v. Bd. of Trustees, 123 S.W. 862; Rockhill Club v. Trustees, 56 S.W. (2d) 9; Belchers, etc., Co. v. Grain Co., 13 S.W. 822; 19 C.J.S., p. 441, sec. 981. (5) Where a transfer of utility property is made in good faith and for value, it will be supported upon the insistence of the purchaser, notwithstanding the terms of the statute. Under such circumstances the term "void" means "voidable." Dearborn Elec. L. & P. Co. v. Jones, 7 Fed. (2d) 806, interpreting the Missouri statutes relied on by respondent. 46 C.J., p. 263; Bromley v. Goodrich, 40 Wis. 431; Green v. Kemp, 13 Mass. 515; St. Louis, etc., R. Co. v. Terre Haute, etc., R. Co., 145 U.S. 393, 12 Sup. Ct. 953; New York L.I. Bridge Co. v. Smith, 42 N.E. 1088; Kearney v. Vaughn, 50 Mo. 285; Blinn v. Schwartz, 177 N.Y. 252, 69 N.E. 542; United States v. Minona, etc., R. Co., 67 Fed. 948; Southern Natl. Ins. Co. v. Barr, 148 S.W. 845; Kinney v. Lundy, 89 Pac. 496, and cases therein cited. (6) A wrong-doing defendant cannot set up the wrongs of another and thus escape responsibility for its wrongs. The doctrine of estoppel is operative against Webster claiming title to or ownership of the utility as against the Southwest Missouri Water Works Company, and the wrong-doing defendant cannot assert any greater rights than Webster himself could assert. Johnson v. Ferguson, 44 S.W. (2d) 650; Dearborn Elec. L. & P. Co. v. Jones, 7 Fed. (2d) 806; State ex rel. Boatmen's Bank v. Webster Groves Sewer Dist., 37 S.W. (2d) 905; St. Joseph v. St. Joseph Term. R. Co., 186 S.W. 1080; State ex inf. Shartel v. Mo. Utilities Co., 53 S.W. (2d) 394; State ex rel. City of Sikeston v. Public Serv. Comm., 82 S.W. (2d) 105; Kribs v. Jefferson City L., H. & P. Co., 199 S.W. 261; Scheiter v. City of Chillicothe, 107 S.W. (2d) 112; Godfrey v. K.C. Light & Power Co., 247 S.W. 451; Green v. Kemp, 13 Mass. 515. (7) The Public Service Commission does not have jurisdiction over the within controversy involving the recovery of money damages. Mitchell v. Illinois Cent. R. Co., 47 N.E. (2d) 115; State ex rel. Kansas City P. & L. Co. v. Buzard, 168 S.W. (2d) 1044; State ex rel. Laundry, Inc, v. Public Serv. Comm., 34 S.W. (2d) 37. (8) The trial court erred in refusing to permit Oscar F. Webster to be made a party plaintiff individually, especially in view of the issues raised by defendant in its answers. Lilly v. Tobbein, 103 Mo. 477, 15 S.W. 618; Sec. 971, R.S. 1939; Turner v. Noble, 249 S.W. 103; Hackett v. Van Frank, 96 S.W. 247; Cytron v. St. Louis Trans. Co., 104 S.W. 109; Hutcherson v. Thompson, 123 S.W. (2d) 142; Wente v. Shaver, 169 S.W. (2d) 947. (9) The allegations in the reply alleging good faith on the part of Webster and the Southwest Missouri Water Works Company, coupled with a plea of mistake of fact, etc., were erroneously stricken by the trial court. The corporate fiction will be disregarded to prevent injustice, particularly where, as here, there has been no change in management and operation of the utility. Authorities under Point (5), supra; Otter Tail Power Co. v. Clark, 229 N.W. 915; Dearborn Elec. L. & P. Co. v. Jones, 7 Fed. (2d) 806; Osler v. Joplin Life Ins. Co., 164 S.W. (2d) 295; Sec 5578, Par. 21, R.S. 1939.

Gertrude W. Willams, Roy Coyne, Cowgill Blair, Jr., John W. Scott and Haywood Scott for respondent.

(1) Where counsel for appellants, in open court during the trial, state and admit facts, the existence of which precludes a recovery by appellants, the court may close the case at once and give judgment against appellants. Wood v. Wells, 270 S.W. 332; Pratt v. Conway, 148 Mo. 291, 49 S.W. 1028; Hampe v. Versen, 32 S.W. (2d) 793, 224 Mo. App. 1144; Wonderly v. Little & Hays Inv. Co., 184 S.W. 1188. (2) The term "water corporation" as used in Chapter 35, Revised Statutes of Missouri, 1939, known as the Public Service Commission law, includes a person operating a water utility. Sec. 5578, Par. 21, Chap. 35, R.S. 1939. (3) No person operating a water utility shall sell, assign, transfer or otherwise dispose of his franchise or water works, or water system necessary or useful in the performance of his duties to the public without having first secured from the Public Service Commission of Missouri an order authorizing him so to do, such sale, assignment, transfer, or disposition made other than in accordance with the order of the Public Service Commission authorizing same is void. Sec. 5651, Chap. 35, R.S. 1939. (4) All stock in a water corporation issued without an order of the Public Service Commission of Missouri authorizing the same is void. Sec. 5654, Par. 2, Chap. 35, R.S. 1939. (5) Penalties and forfeitures are provided by the statutes of Missouri for the violation of the provisions of Chapter 35, Revised Statutes of Missouri, 1939. Sec. 5654, Par. 4, R.S. 1939; Sec. 5660, R.S. 1939. (6) The sale, assignment, transfer or disposition by Oscar F. Webster to the Southwest Missouri Water Works Company, a corporation organized by the plaintiffs under the laws of the State of Missouri, of his franchise and water works necessary and useful in the performance of his duties to the public was void, no order having been first secured from the Public Service Commission of Missouri authorizing such sale, assignment, transfer, or disposition, and all the stock of said Southwest Missouri Water Works Company was void, it having been issued to the plaintiffs without an order of the Public Service Commission authorizing the same. Sec. 5651, Par. 1, R.S. 1939; Sec. 5654, Par. 2, R.S. 1939; Ry. Exchange Bldg., Inc., v. Light & Development Co., 107 S.W. (2d) 59, 341 Mo. 334; Cooper County Bank v. Bank of Bunceton, 288 S.W. 95, 221 Mo. App. 814; Borg v. Illinois Terminal Co., 16 Fed. (2d) 988; Slater v. Shell Oil Co., 103 Pac. (2d) 1043; Napa Valley Elec. Co. v. Calistoga Elec. Co., 176 Pac. 699; Crum v. Mt. Chasta Power Corp., 30 Pac. (2d) 30; Chicago & Western I.R. Co. v. Engelstein, 333 Ill. 117, 164 N.E. 189. (7) The statutes of Missouri provide that upon the dissolution of any corporation the president and directors at the time of its dissolution shall be trustees of such corporation. Sec. 5036, R.S. 1939; Watkins v. Mayer, 103 S.W. (2d) 566; Eberle v. Koplar, 85 S.W. (2d) 919. (8) The statutes of Missouri provide that the directors in a corporation in Missouri must be stockholders in such corporation. Sec. 5346, R.S. 1939; Loomis v. Mo. Pac. R. Co., 165 Mo. 469, 65 S.W. 962. (9) Where the stock held by plaintiffs in a Missouri water corporation is void under the law of Missouri, the plaintiffs are not, legally, stockholders in said corporation, and not being stockholders they are not, legally, directors, and not being directors they are not trustees of said corporation. Secs. 5036, 5654, R.S. 1939. (10) Under the Missouri practice act it is provided that a petition shall state "a plain and concise statement of the facts constituting a cause of action." Sec. 916, R.S. 1939. (11) The Missouri statute permits only substantive facts to be used in stating any cause of action. Sec. 935, R.S. 1939. (12) Where the plaintiffs pleaded that they are trustees, without a statement showing facts which constitute them such, their allegation is but a legal conclusion and is insufficient. Tucker v. Diocese of West Mo., 264 S.W. 897; Wilson v. Polk County, 112 Mo. 126, 20 S.W. 469; Piggott v....