State Ex Rel. Raleigh Inv. Co. v. Allen , 294 Mo. 214 ( 1922 )


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  • Certiorari to review the opinion and quash the judgment of the St. Louis Court of Appeals in the case of Raleigh Investment Company, a corporation, respondent, v. P.H. Cureton, appellant; unofficially reported in 232 S.W. 766. That opinion was filed on June 7, 1921, and reversed the judgment of the Circuit Court of the City of St. Louis. The proceeding there was under Section 9764, Revised Statutes 1919.

    Relator, as a creditor, had brought its action against the Bismarck-Bellevue Valley Western Railway Company, a Missouri corporation; had recovered judgment; and upon a nulla bona return, upon execution, filed its motion and served its notice upon the said appellant Cureton for execution against him for the unpaid balance on stock owned by him.

    It was charged in said motion that the said Cureton was the owner of forty-six shares of the stock of the said railroad company of the par value of one hundred dollars, and that ninety per cent thereof remained unpaid.

    Defendant Cureton admitted he was a stockholder of said company, but said that he acquired fifteen shares of said stock from one E.E. Evans on the 5th of April, 1912; that he purchased the same under the belief that such shares were fully paid up, and that he had no knowledge or notice of anything to the contrary, and believed and continued to believe that such shares were fully paid and non-assessable, as recited on the face of *Page 219 the certificates. On this return an issue was made up by the reply of relator.

    The circuit court ordered a reference and appointed Frank A. Thompson referee, with power to try all of the issues and report all findings and proceedings to the court. Upon a hearing the referee recommended that plaintiff's (relator's) motion be sustained, and that execution be issued against the defendant (appellant) to collect the sum of thirty-six hundred and eighty dollars, being the amount remaining unpaid on forty-six shares owned by defendant.

    Defendant Cureton filed his exceptions to the report, and upon a confirmation thereof duly prosecuted his appeal to the St. Louis Court of Appeals. That court, in the opinion filed by Commissioner Bruere, now under review, reversed the judgment against appellant Cureton, and remanded the cause with directions to enter up judgment for him.

    Relator now seeks a review of that opinion upon the ground that it is in conflict with certain previous pronouncements of this court, and particularly in conflict with the opinion in Division Two of this court in the case of Raleigh Investment Co. v. Bunker, 285 Mo. 440, 227 S.W. 121. The latter case was a companion case of the one under consideration, being a proceeding under the same statute against another stockholder of the same corporation, but involving a sum within our jurisdiction. This court affirmed a judgment against the stockholder in the Bunker Case, upon the ground that such stockholder had notice that the stock purchased and owned by him from the organizer of the corporation had not been fully paid.

    Other pertinent facts as we gather them from the opinion under review will be stated hereafter. The Court of Appeals reviewed the case as if triable de novo in that court and made its own findings and reached its own conclusions, and being an equitable action that was proper. [Ford v. Laughlin, 226 S.W. (Mo.) 911; Claybrook v. Saulsberry, 204 S.W. (Mo) 60.] *Page 220

    I. Relator ascribes error to the Court of Appeals "in not finding both actual and constructive notice against defendant Cureton."

    For the purposes of this case we may concede that the Court of Appeals erred in its findings of fact, and yet that does not warrant a review by this court. The Court of Appeals alone had jurisdiction of the appeal, and sitting as a court of conscience upon the facts before it, it could make such findingsExtent of of fact as may have seemed correct withoutReview. interference or supervision. It is a court of last resort and we are only concerned that its conclusions of law do not conflict with the latest pronouncement of this court upon the same or a similar state of facts. [State ex rel. Chicago Alton R.R. Co. v. Allen, 236 S.W. 868; State ex rel. Continental Ins. Co. v. Reynolds, 235 S.W. 88; State ex rel. Calhoun v. Reynolds, 233 S.W. 483; State ex rel. American Packing Co. v. Reynolds, 230 S.W. 642.]

    And in our review we do not extend our inquiry beyond the opinion and any pleading, instruction or written instrument referred to therein. [State ex rel. Continental Ins. Co. v. Reynolds, supra; State ex rel. Kansas City v. Ellison,281 Mo. 667, 220 S.W. 498; State ex rel. Hayes v. Ellison, 191 S.W. 49.]

    We must therefore take the facts as stated in the opinion under review and ascertain whether or not upon those facts the Court of Appeals announced some conclusion of law contrary to the last previous rule of this court upon the same or a similar state of facts. It is not our province to determine whether the Court of Appeals erred in its findings of fact, or even in its application of rules of law to the facts stated in the opinion, but only whether upon such facts it announced a conclusion of law in conflict with the latest pronouncement of this court. [State ex rel. Continental Ins. Co. v. Reynolds, 290 Mo. 362.]

    Upon the assignment of error under discussion there is nothing for this court to review as the Court of Appeals *Page 221 was justified in making the findings it did upon the facts stated in the opinion. We quote from the opinion:

    "The evidence introduced on the issue under consideration is mainly found in the deposition of the appellant introduced in evidence by the plaintiff. The deposition was taken on the 16th day of August, 1916, and showed, in substance, that at that time the appellant was engaged in the mercantile business, resided in Poplar Bluff, Missouri, and was forty-three years old.Finding He became acquainted with E.E. Evans about four yearsof Facts. prior to the date of the taking of his deposition. He purchased forty-four shares of stock in the Bismarck-Bellevue Valley Western Railway Company from E.E. Evans and paid him ten dollars per share. About a month before he purchased the first stock Mr. Evans tried to sell him some stock. At that time it seems appellant lived at Bunker, Missouri, and attended a meeting at Bunker, called for the purpose of boosting the railroad. The date of the meeting appellant did not know, but remembered that more than one meeting was held there. When Mr. Evans first spoke to him about purchasing said stock he priced it to appellant at ten dollars per share. The stock was made out in appellant's name and delivered to him at the time he paid for the stock. Appellant did not know Mr. Evans was president of the company. The stock was purchased at different times. Appellant did not know anything about Mr. Evans's financial standing before he purchased the stock. He did not make any particular inquiry, but heard that he would overcheck, and that he gave a note and fell down on it. Mr. Evans did not indorse any certificate of stock over to appellant; all the certificates were made out in appellant's name. Mr. Evans told appellant, `this is my stock fully paid.' He also told appellant that he got the stock from the company for services, but he did not say how much stock he received. Appellant knew of no property that Mr. Evans had at the time he negotiated for said stock. Appellant was not certain whether the conversation he heard about *Page 222 Mr. Evans overchecking and having an unpaid note outstanding was before or after he purchased the stock, but, according to his best knowledge, it was after the purchase of the stock.

    "The deposition of Mr. Black was introduced in evidence by the plaintiff. Mr. Black testified that he lived in Redmondville, Missouri, and that a meeting was called in his neighborhood to boost the railroad. Mr. Evans and Mr. Cureton spoke at the meeting. When the meeting was held does not appear. What was said by Mr. Evans at the meeting is not disclosed in the deposition. Mr. Cureton said at that meeting that he thought the railroad was a good proposition. The stock certificates delivered to appellant recited that the shares were full-paid and non-assessable. This was all the evidence bearing on the question whether the appellant had knowledge that the stock was not fully paid.

    "We do not think the evidence sufficient to justify the finding of the referee and the trial court that appellant had knowledge that the stock was unpaid at the time he purchased it. He did not acquire the stock as an original subscriber or taker. The fact that the stock was purchased from Mr. Evans at ten dollars a share was not such a circumstance as to have caused appellant to know that it had not been fully paid, or to charge him with inculpatory negligence in not knowing that it was unpaid for; the best stock fluctuates at times. Nor is the fact that Mr. Evans told appellant that he got the stock from the company for his services sufficient to have caused appellant to know that Mr. Evans did not pay for the stock, in the absence of evidence showing knowledge by appellant of the amount of stock issued for the services and the nature of the services rendered. The stock represented on its face that it was full-paid and non-assessable. Mr. Evans told him it was full-paid. There is no fact disclosed in the testimony sufficient to have put appellant on inquiry, or to have caused him to believe that the said recital, made on the face of the certificate, *Page 223 or the said statement made to him by Mr. Evans, was not true.

    "As we view the evidence we are constrained to hold that the finding and judgment of the referee and lower court was not warranted under the evidence; the finding and judgment should have been for the appellant. The judgment of the lower court should be reversed, and the cause remanded, with directions to enter up judgment for the appellant."

    II. Relator's second assignment is that the court "erred in disregarding the case of Raleigh Investment Company v. Bunker, reported in 285 Mo. 440, and finding in conflictBunker Case. therewith."

    We have examined the Bunker Case and do not find the facts therein stated the same as those stated in the opinion under review. In the Bunker Case the court expressly found that the defendant (appellant) had both actual and constructive notice, and that eighty per cent of the par value of the stock acquired by him remained unpaid to the corporation. This finding was warranted by the facts before this court, and the findings made by the Court of Appeals were warranted upon the facts stated in its opinion. Moreover, it is not the province of this court to supervise the findings of fact made by the appellate courts, but its supervisory power is limited, as above stated, to conflicts in declarations and conclusions of law. The Court of Appeals might have made a wrong finding on the facts, and still be correct in its application of the law. In such event we would not interfere.

    III. The Court of Appeals reviewed the case upon the theory that being a reference, it became its duty to "review the evidence and the findings of fact and theUnconstitutional conclusions of law of the reference and theStatute. trial court, and give such judgment as shall be conformable to the law on the evidence" as provided by Section 1444, Revised Statutes 1919. *Page 224

    This section of our statute was declared unconstitutional in the case of State ex rel. Saline County v. Wilson, 288 Mo. 315. And, moreover, the appeal in the case under review was perfected before the enactment of said statute. [Christine v. Luyties,217 S.W. 55; Universal Const. Co. v. City, 223 S.W. 931.]

    The authority of the Court of Appeals to review the evidence and findings of fact and the conclusions of law of the referee and the trial court, and reach its independent conclusions was not therefore derived from the statute relied upon by it. Its power to review was incidental to its jurisdiction in equity, for in equity cases it is the duty of the appellate tribunal to review the entire evidence (Brightwell v. McAfee, 249 Mo. 562, l.c. 582, 155 S.W. 820; Jackson Exchange Bank v. Russell,181 Mo. App. 698, 164 S.W. 694) and questions like this under review have long been treated in this State as falling on the equity side of the court and to be dealt with upon equitable principles. [Raleigh Inv. Co. v. Bunker, 285 Mo. 440.]

    The premises considered, our writ was improvidently issued and should be quashed. It is so ordered. White, C., concurs;Railey, C., not sitting.