Winsor v. Continental Fabricators & Supplies, Inc., WD

• Decision Date: 10 August 1982
• Docket Number: No. WD,WD
• Citation: 641 S.W.2d 120
• Court: Missouri Court of Appeals
• Parties: Thomas D. WINSOR, Appellant, v. CONTINENTAL FABRICATORS & SUPPLIES, INC., Wilbert M. Travis, and Travis Automatic Sprinkler Corporation, Respondents. 32552.

Page 120

641 S.W.2d 120

Thomas D. WINSOR, Appellant, v. CONTINENTAL FABRICATORS & SUPPLIES, INC., Wilbert M. Travis, and Travis Automatic Sprinkler Corporation, Respondents.

No. WD 32552.

Missouri Court of Appeals,

Western District.

Aug. 10, 1982.

Motion for Rehearing and/or Transfer to

Supreme Court Overruled and Denied

Oct. 5, 1982.

Desselle & White, H. Kent Desselle, Independence, for appellant.

Happy, Cooling & Herbers, J. Nelson Happy, Kansas City, for respondent.

Before SOMERVILLE, C.J., Presiding, and WASSERSTROM and LOWENSTEIN, JJ.

SOMERVILLE, Chief Judge.

In 1977 Thomas D. Winsor (hereinafter appellant) filed a multi-count petition for accounting and appointment of a receiver against Continental Fabricators & Supplies, Inc. (hereinafter respondent Continental), Wilbert M. Travis (hereinafter respondent Travis), and Travis Automatic Sprinkler Corporation (hereinafter respondent Sprinkler Corp.).

The record on appeal consists solely of a legal file, certain component parts of which lack considerable detail in various respects. As a result an undue burden has been placed on this court to put this appeal in proper perspective. Laboring under this burden, the following has been gleaned after a careful and exhaustive review of the legal file in its entirety. Appellant, according to his petition, sold stock in respondent Continental to respondents Travis and Continental having a value of Thirty-eight Thousand and no/100 Dollars ($38,000.00), and after all credits and setoffs there remained an unpaid balance due and owing to him of Thirty-seven Thousand Five Hundred Ninety-three and 67/100 Dollars ($37,593.67) which respondents Continental and Travis failed and refused to pay; respondent Continental's corporate charter was forfeited on January 1, 1976, by reason of failure to file a 1975 Annual Registration Report and Anti-Trust Affidavit with the Secretary of State; respondent Travis, former president and sole director of respondent Continental, was the statutory trustee of respondent Continental; respondent Travis was not performing his duties as statutory trustee of respondent Continental and assets of the latter were being "wasted and dissipated"; and corporate assets of respondent Continental were transferred by respondents Travis and Continental to respondent Sprinkler Corp. to "hinder" creditors of respondent Continental. As reconstructed from convoluted matters scattered throughout other portions of the legal file, the balance claimed owing on the stock sold by appellant to respondents Continental and Travis was commensurate with or to be determined by the net value of the assets of respondent Continental as of March 31, 1975, the date on which the stock was transferred by appellant to the respective respondents.

Respondents Continental and Travis filed a joint answer to appellant's petition. Respondent Sprinkler Corp. filed an answer and multi-count counterclaim against appellant for unpaid rentals, services and labor performed, and damages to a truck which it owned.

In response to a stipulation entered into between appellant and respondents, the trial court, on June 18, 1979, issued an order pursuant to Rule 68.01 appointing a special master to ascertain and determine the value of the stock of respondent Continental at the time it was transferred. The order of reference limited the master to findings of fact on the specific issue immediately heretofore set forth. Per the stipulation of the parties the order of reference further provided "[t]hat the findings of fact of the master shall be binding upon the parties pursuant to Rule 68.01(g)(4); and that plaintiff shall share the equity or loss of said valuation of CONTINENTAL FABRICATIONS equally with [the appropriate respondents] ..., and that said findings shall be a final judgment upon the parties."

It is appropriate at this time to interject specific references to certain salient portions of Rule 68.01 (captioned Masters in Circuit Courts). Rule 68.01(b) reads in part that "in actions to be tried without a jury, save in matters of account and of difficult computation of damages, a reference shall be made only upon a showing that some exceptional condition requires it." (Emphasis added.) The stipulation entered into between the parties, conjoined with Rule 68.01(b), obviously accounts for the fact that none of the parties question the propriety of referring the limited issue to a master. Rule 68.01(e) reads in part that "[t]he order of reference to the master may specify or limit his powers and may direct him to report only upon particular issues ...." Rule 68.01(g)(4) reads as follows: "Stipulation as to Findings. If the parties stipulate that a master's findings of fact shall be final and binding upon them, only questions of law arising upon the master's report shall thereafter be considered." (Emphasis added.)

It appears that the special master was somewhat tardy in filing his report. Consequently, on May 19, 1980, the trial court entered an order directing the special master to file his findings of fact on or before May 30, 1980. Notwithstanding the order just mentioned, the special master's report was not filed until October 9, 1980.

The belated report of the special master, after careful perusal, discloses the following findings of fact dispositive of the specific issue referenced: "We conclude that there is no information to verify that Continental Fabrications and Supplies, Inc. had any value at March 31, 1975." The special master was an accountant who went to some pains in his report to point out "that the records presented by both sides in this disagreement were very poorly documented." The report also discloses that the special master found that certain "figures" and "information" submitted by appellant, which were inconsistent with the "company's books and records as originally prepared and submitted" and the Federal Income Tax Return filed by respondent Continental "for the year ended March 31, 1975", lacked verity. Unfortunately, a shadow of confusion was cast over the report by the special master's discussion therein, albeit arguendo in a hypothetical sense, as to the adverse effect which the rejected "figures" and "information" submitted by appellant would have had, if possessed of verity, upon respondent Continental's federal income tax liability for the year ending March 31, 1975, and, as well, their projected adverse effect, penaltywise and interestwise, up through September, 1980.

Appellant filed objections to the special master's report pursuant to Rule 68.01(g)(2). In due course the trial court overruled appellant's objection to the special master's report, adopted the special master's findings of fact, and entered judgment in favor of the appropriate respondents and against appellant on the latter's petition for accounting and appointment of a receiver. The trial court also entered judgment in favor of appellant and against respondent Sprinkler Corp. on the latter's counterclaim.

Appellant tenders three (3) points on appeal: (1) the trial court erred in overruling his objections to the special master's report because the stock was valued as of September, 1980, rather than March 31, 1975, the date of transfer; (2) the correct date for valuing the stock constituted a legal question which the trial court erroneously failed to rule on; and (3) the trial court erred in adopting the special master's report because it was not timely filed.

Appellant's first two points are interspersed with questions as to the scope of review where the parties, as here, stipulate pursuant to Rule 68.01(g)(4) "that a master's findings of fact shall be final and binding upon them." In this respect, a case of first impression as far as this state is concerned is before the court.

The Committee Notes appended to Rule 68.01(g)(4) acknowledge that its source is Rule 53(e)(4) of the Federal Rules of Civil Procedure, ¹ and the wording of both is virtually identical. Their kindred nature is such that federal cases, admittedly sparse in number, are persuasive in determining...