Kansas City Assemblage Co. v. Lea

405 S.W.2d 241, 1966 Mo. App. LEXIS 618
CourtMissouri Court of Appeals
DecidedJune 6, 1966
DocketNo. 24445
StatusPublished
Cited by2 cases

This text of 405 S.W.2d 241 (Kansas City Assemblage Co. v. Lea) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kansas City Assemblage Co. v. Lea, 405 S.W.2d 241, 1966 Mo. App. LEXIS 618 (Mo. Ct. App. 1966).

Opinion

BLAIR, Judge.

This action was commenced by Kansas City Assemblage Company, a corporation, against Albert R. Lea on July 3, 1961. The relevant averments of the petition were that Albert R. Lea was an employee of the Assemblage Company and that “during said employment, and specifically and continuously from January 1, 1951 through and including December 31, 1958, defendant used and converted funds of plaintiff corporation to his own use by paying personal debts and expenses with plaintiffs funds from time to time in the total amount of $4,540.29” and that on January 24, 1961 the Assemblage Company “made demand on the defendant for repayment of said sum” and that he failed and refused to pay. By his answer the defendant denied that he had wrongfully converted any funds of plaintiff corporation to his own use and alleged that the petition failed to state a cause of action for the reason that “it is barred by the statute of limitations in that the suit was filed July 1, 1961 for claims alleged in 1951 and 1952.”

The trial was before the court without a jury. The court found (1) “that by mutual agreement plaintiff for business purposes paid $1224.00 for membership in the Mission Hills Country Club which was held in the name of defendantthat “this membership could not be transferred to the plaintiff corporation when defendant severed his connection with plaintiff and was therefore retained in defendant’s name;” that “defendant, having elected to retain said membership, is indebted to the plaintiff for the cost thereofand (2) “that the defendant did not wrongfully convert any funds of plaintiff to his own use.” Judgment was accordingly rendered for the Assemblage Company and against Lea in the sum of $1224.00 and the costs were taxed equally against the parties. Lea appeals from the judgment against him in the sum of $1224.00 and Assemblage Company appeals from the judgment against it that Lea “did not wrongfully convert any of the funds of the corporation to his own use,” contending that it should have had judgment for an additional $1996.29 for funds it claims were converted by Lea.

We must review this controversy upon both the law and the evidence as in suits of an equitable nature. Neither judgment will be set aside unless it is clearly erroneous. Due regard must be given by us to the opportunity of the trial court to judge the credibility of the witnesses. However, if our review of the case forces the conclusion that either judgment is clearly erroneous, we will not hesitate to set aside that judgment and to direct a different one. Civil Rule 73.01(a), V.A.M.R.; Hanover Insurance Co. v. Abschal, Mo.App., 375 S.W.2d 605, 609; M.F.A. Mut. Ins. Co. v. Alexander, Mo.App., 361 S.W.2d 171, 178. We deal first with Lea’s appeal.

[243]*243The Assemblage Company is a family corporation. Mrs. Winona Gilkey was at all times the controlling stockholder, its president, its alter ego and almost its sole owner. Prior to 1947 an insignificant number of shares had been issued to her two daughters and her son. In 1947 Lea became associated with the Assemblage Company as its vice-president and general manager. His wife was a daughter of Mrs. Gilkey. Three hundred sixty shares of stock were issued to Lea. On April 27, 1951, Lea joined Mission Hills Country Club and the company paid for his membership, $1224.00. At the trial, Mrs. Gilkey testified as follows : “Q Let me ask you, on April 27, 1951, were you aware that Mr. Albert Lea joined Mission Hills Country Club, and were you aware at that time that the corporation, Kansas City Assemblage Company, paid his membership fee? A Yes, I was aware of that. Q You were aware of that fact? A Yes. Q Did you object at that time to the fact that the corporation paid Mr. Albert Lea’s membership to that club? A No, because we wanted to help out.” Prior to the trial, Mrs. Gilkey gave testimony by deposition which was read to her at the trial and which she acknowledged to be correct. Her testimony was that she and Lea discussed the purchase of the Mission Hills Country Club membership before it was purchased. She stated “Well, he just said he was going to do it (purchase the membership) and would it be all right, and I said ‘Yes, Go ahead.’ ” She admitted she told Lea in that discussion that it was all right for the corporation to pay for the membership. She said she was aware of the fact that thereafter on April 27, 1951, the corporation paid for that membership.

After the purchase of the membership Lea used it to entertain customers and prospects of the company and he and his wife used it for social purposes. He always paid the club dues with his own personal funds. The membership was nontransferable and no one claimed that the company and its officers were not aware that it was impossible for Lea to transfer it back to the company or to any one else once it was placed in his name. There is nothing in the testimony of Mrs. Gilkey establishing that Lea agreed at any time, expressly or tacitly, to repay the company for the membership. She did not even testify that she expected repayment when the membership was purchased. She was asked if any demand had been made on Lea to “return any of these funds to the corporation” before January 24, 1961, and she answered “I think every year this was done.” She thought the Certified Public Accountant, Mr. Harry Kuehn, who supervised and adjusted the bookkeeping for the company, “did look it (Lea’s account) over.” The intimation conveyed was that Kuehn did demand repayment by Lea each year. She did not testify that she had any direct knowledge that this was done. She stated that Mr. Kuehn would know how much Lea was indebted to the company. Oddly enough, Mr. Kuehn was not called as a witness and no attempt was made to account for his absence. The inference is allowable that testimony from him would have damaged rather than aided the company’s cause. Her final testimony almost at the end of the trial was that she did not “remember” if she ever demanded payment from Lea for the membership until January 24, 1961, after Lea had been discharged from the company on December 31, 1958, and after he and his wife, her daughter, were divorced in 1960.

Adah M. Sturgeon, the bookkeeper for the company, testified for the company that although the membership was purchased on April 27, 1951, no entry was made in the books until June 30, 1951. She made an entry on that date in the ledger from the check written to Mission Hills Country Club in payment for the membership. That entry was: “Mission Hills Country Club” for the sum of $1224.00. No other entry was ever made and thereafter this entry was always carried in the ledger as written. She testified this entry was carried in the ledger as “a club expense.” She repeatedly testified under the most insistent and repetitious examination that the membership was never [244]*244carried on any of the books as an account receivable from Lea or as an indebtedness of Lea to the company. Illustratively, and this is only one of several similar examples of her testimony, she testified as follows: “Q Did you, as the bookkeeper, treat that transaction of Mission Hills at that time as a debt or gift? The Court: I think we have covered that. It is on the books as a club membership. Q Did you put it on the books as a club membership? A Yes, sir.” Counsel representing the company did not then or at any other time raise any objection that the statement of the court was an inaccuracy.

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Bluebook (online)
405 S.W.2d 241, 1966 Mo. App. LEXIS 618, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kansas-city-assemblage-co-v-lea-moctapp-1966.