Pennsylvania Co. for Insurance on Lives & Granting Annuities v. Picher

227 S.W. 863, 206 Mo. App. 325, 1921 Mo. App. LEXIS 19

Opinion

FARRINGTON, J.

Plaintiffs appeal from a judgment rendered in favor of defendant in a suit seeking to to recover the sum of $685.76, alleged to be Avrongfully Avithheld by the defendant from plaintiffs. The cause Avas tried in the circuit court before the judge sitting as a jury upon the folloAving agreed statement of facts:

“It is hereby agreed and stipulated by and betAVeen the parties hereto that a jury be and the same is hereby Avaived and that this cause shall be submitted to and decided by the court upon the following agreed statement of facts, which shall he taken as and shall he the sole and only evidence in the case, to-wit:

I.

On February 15, 1906, all of the stockholders of the Picher Lead- Company, a Missouri corporation, and amongst others the plaintiffs and the defendant herein, and Oliver H. Picher, entered into a written contract and made, executed and delivered their written contract, in and by which it ivas agreed and provided that said Oliver H. Picher was thereby authorized to sell and deliver all the capital stock of said Picher Lead Company for a price and sum therein specified and payable (1) a designated portion in cash, (2) another portion in notes, one-half due in one year and one-half due in two years from date with interest and secured by first mortage on the lands and works owned by said Picher Lead Company and (3) balance of $100,000 to be represented by certificates of indebtedness of the purchasers, carrying no personal liability of the maker or makers thereof and to be secured by ten sixty-sixths (10/66) of the then Picher Lead Company stock; that said notes were to bear interest from date at the rate of 6 per cent per annum, payable annually, with the provision that if the interest should not be paid annually the said stock should thereby become forfeited and become the property of the holders of said certificates of indebtedness. It was further provided in said contract that all dividends declared upon said stock so pledged as collateral security should be paid to the holders of said certificates of indebtedness, credited first upon any interest due thereon and the remainder upon the principal thereof, and that when the amount of dividends so paid should equal the balance so due upon .said certificates of inbebtedness, or when the maker or makers thereof should pay the balance due thereon at any time the said stock should be returned to said maker or makers. It was further provided in said contract that in the event of such sale, the proceeds thereof, to-wit, the amount received in cash, in notes secured by mortgage and in notes secured by ihe stock as aforesaid, should he distributed and delivered as therein specified. Said contract then provided for full distribution of all thereof; the estate of Joseph J. Solomon, deceased, to receive three-twentieths (3/20) thereof. Said contract further contained the following provisions:

‘It is understood and agreed that neither the said Picher nor any other present owner of any interest in said Picher Lead Company, is to receive any compensation in or about said sale, directly or indirectly, or be in any manner interested in said purchase.’

‘The said Picher’ so mentioned was Oliver H. Picher.

II.

Shortly following the delivery of said contract, the said Oliver H. Picher did sell and deliver all of the capital stock of the Picher Lead Company for the price and upon the terms and in accordance with said contract, and the portion of the purchase price to be paid in cash Avas so paid and distributed to the signers of said contract in accordance therewith, and to their holdings of stock; that the portion of the payment to be represented by notes secured by mortgage was so paid upon maturity of said secured notes, the mortgage released and the proceeds distributed amongst the stockholders according to the terms of the first mentioned contract; that the remainder of the purchase price, to-AAit $100,000, was covered by the execution of certificates of indebtedness, as provided in the contract, said certificates being nine (9) in number and aggregating $100,000. three thereof being $15,000 each, three for $10,000 and three for $8,333.33, and each of the three purchasers executing one of each class of said certificates; and there Avas pledged and delivered to the said O. IT. Picher as collateral security for the payment of said indebtedness 153 shares of the capital stock of the said Picher Lead Company; that upon execution of said certificates of indebtedness they Avere distributed amongst the selling stockholders in said Picher Lead Company, and for their portion thereof the plaintiffs received Certificate No. 1, signed by R. W. Evans, for the pn'ncipal sum of $15,000; that the 153 shares of stock pledged as collateral security for the payment of all of said certificates of indebtedness remained in the possession of the said Oliver H. Richer for the benefiit alike of all the holders of said certificates; and said Oliver H. Pieher from time to time collected all dividends declared and paid on said shares and distributed same pro rata amongst said stockholders.

III.

Under date November 24, 1908, the plaintiffs made, executed and delivered to said Oliver H. Pieher their certain agreement, mentioning contract of February 15, 1906, and reciting that: 'Whereas, in pursuance of said agreement, the said Oliver H. Pieher did sell and deliver all of the said capital stock at said price and upon said terms and has collected and received all proceeds of said sale, and has fully accounted for and paid to the undersigned (the plaintiffs) the full part and share of said proceeds due to the undersigned, the receipt whereof is hereby acknowledged.’

Said contract then provided as follows, to-wit:

'Now, therefore, the said Oliver H. Pieher is hereby fully and finally released, acquitted, and discharged of all liability to the plaintiff in the premises and in and as to all his acts, and doings in the making of said sale, the collection, receipt and distribution of the proceeds thereof, and in and as to any trusteeship in the premises arising out of any of his said acts and doings, saving and excepting only that, whereas, a part of the proceeds of said sale consists of a series of nine certificates of indebtedness (which are then fully described).’

Said contract then provides as follows: to-wit:

‘It is agreed that the said Oliver H. Pieher shall continue to act as trustee to receive payments upon said certificates as therein provided and to hold the said one hundred and fifty-three (353) shares of the cápital stock of said Pieher Lead Company as security for the payment of said certificates as therein provided.’

IV.

That under said last mentioned contract and similar contracts from the other former stockholders in the Picher Lead Company,' said Oliver H. Picher continued to hold said stock so pledged as collateral security, and collected all dividends declared and paid thereon and distributed same to the stockholders pro rata in accordance with the first mentioned contract until the date of his death, October 2, 1912.

V.

Thereafter, under date December 7, 1912, the plaintiffs herein and all other former stockholders in said Picher Lead Company executed and delivered to the defendant the following instrument, to-wit:

'It is hereby agreed by the undersigned for W. II. Picher to act as trustee to settle the accounts of Joseph J. Solomon, A. W. Wright, E. O. Bartlett, O. H. Picher and W. H. Picher, against the Picher Lead Company of Joplin, Missouri. •"

That pursuant to said terms the defendant took possession of said 153 shares of stock and held the same and thereafter collected all dividends declared thereon and also received payments from the makers of said certificates of indebtedness, distributing such payments as made from time to time amongst the former stockholders entitled thereto in accordance with the first mentioned contract, until the final payment of the principal and interest of all said certificates of indebtedness. Whereupon the defendant made final distribution of the amount so collected by him, except as to the sum retained as compensation for his servicés, and surrendered all the certificates of stock to the makers of the said several certificates of indebtedness.

VI.

In making final settlement with the various stockholders, the defendant deducted, as compensation for his said services, a commission of five per cent (5%) of the amount of his collections, and the amount so retained and claimed by him as commission on the moneys due to the plaintiffs was $685.76, which amount-was finally retained by the defendant March 17, 1917; that if, under the facts herein set forth and agreed upon, and under the law, the defendant is entitled to charge compensation for his said services, which the plaintiffs deny, then it is agreed that the charge of five per cent commission for his said services is a reasonable and just charge and ajudgment should be rendered in favor of the defendant. On the other hand, if, under the facts as herein set forth and under the law, as contended by plaintiffs, and denied by the defendant, the defendant is not entitled to compensation for his said services, then the plaintiffs should have judgment for the sum of $685.76, Avith interest at six per cent per annum from March 17,1917, and for costs.

VII.

It is further admitted that the plaintiffs are trustees under the will of Joseph J. Solomon, deceased, and that said will was duly probated in the proper court ■haAÚng jurisdiction thereof in Philadelphia, Pennsylvania, in 1892; and that the plaintiffs are still acting; as such trustees.

It is further admitted, subject to defendant’s objection to the admissibility, competency and relevancy thereof (such objections to be made at the hearing’), that during his lifetime the said Oliver PI. Picher did not charge the plaintiffs any sum for the services rendered hy him in collecting the payments made on said certificates of indebtedness as aforesaid, and made no charges whatsoever for any services rendered by him in reference to the matters aforesaid.”

There is no contest here as to the correctness of the amount of money retained by the defendant, if he is entitled to anything.

The only questions raised on this appeal are, first, was the defendant, under the agreed statement of facts, entitled to charge any compensation for his services as a trustee; and second, did the court err in excluding the testimony showing that a former trustee, acting in the same capacity, had made no charge for similar services'? The particular paragraphs of the contract which hear on the principal question to be determined, read as follows:

“It is understood and agreed that neither the said Picher nor any other present owner of any interest in said Picher Lead Company, is to receive any compensation in or about said sale, directly or indirectly, or be in any manner interested in said purchase.” which was contained in the original contract of sale of the property, and the following provisions in a contract of November 24, 1908:

“Whereas, in pursuance of said agreement, the said Oliver H. Picher did sell and deliver all of the said capital stock at said price and upon said terms and has collected and received all the proceeds of said sale, and has fully accounted for and paid to the undersigned (the plaintiffs) the full part and share of said proceeds due to the undersigned, the receipt whereof is hereby acknowledged.

• Now, therefore, the said Oliver II. Picher is hereby fully and finally released, acquitted and discharged of all liability to the plaintiff in the premises and in and as to all his acts, and doings in the making of said sale, the collection, receipt and distribution of the proceeds thereof, and in and as to any trusteeship in the premises arising out of any of his said acts and doings, saving and excepting only that, whereas, a part of the proceeds of said sale consists of a series of nine certificates of indebtedness (which are then fully described).

It is agreed that the said Oliver H. Picher shall continue to act as trustee to receive payments upon said certificates as therein provided and tó hold the said one hundred and fifty-three (153) shares of the capital stock of said Picher Lead Company as security, for the payment of said certificates as therein provided.” and a provision in a third instrument dated December 7, 1912, as follows:

“It is hereby agreed by the undersigned for W. H. Picher to act as trustee to settle the accounts of Joseph J. Solomon, A. W. Wright, E. O. Bartlett, O. H. Picher and W. H. Picher, against the Picher Lead Company of Joplin, Missouri.

There are no cases cited, or which we have been able to find, that give any more than general outlines of the law to be applied to this case, and its decision must necessarily depend upon the construction and interpretation to be given on the clauses in the contracts in this particular case.

It is settled law in Missouri and in the United States that a trustee will be entitled to reasonable compensation for services rendered at the request of the beneficiaries where there is no expressed prohibition denying him compensation for his services. [See Kemp v. Foster, 22 Mo. App. 649; 2 Perry on Trusts, secs. 917, 918; Maginnis v. Green, 67 Mo. App. 620; Tracy v. Railroad, 13 Mo. App. 295, affirmed in 84 Mo. 210; Barney v. Saunders, 16 Howard, 535, 14 Law Ed. 1047; 28 Amer. & Eng. Ency. Law (2 Ed.), 1032, 1035; 39 Cyc. 480.]

The circuit court interpreted the clause prohibiting any owners of stock in the Picher Lead Company from receiving compensation in and about said sale directly or indirectly, or to be in any manner interested in said purchase as applying to the transfer and sale of the stock and property of the company; and that when the cash part of the purchase price was paid, the notes were executed, and the notes secured by certificates were executed, the sale was in effect completed and all that was required from that time on was the deferred payment on the purchase price, and in carrying out this plan of payment is was necessary and convenient that some one hold the certificates, credit the dividends and receive the payment due under the sale which had been made for the benefit of the various sellers or parties in interest who owned different amounts of stock in the company. In other words, that the provision of the contract prohibiting compensation to stockholders ceased as soon as the bargain- had been struck and the payment in cash and credits had passed from one party to the other.

In speaking of the essential elements of a sale, Mechem on Sales, Vol. 1, sec. 4, lays down the rule that a third element also, often appearing with others, is that of payment. But payment is by no means a necessary concomitant of the transfer of the title; for the property may be paid for before the title passes, or contemporaneously with its transfer, or at any time thereafter. Also, at section 493, it is held that it is not at all essential to the transfer of the title that the price shall have been paid.

Benjamin on Sales, in discussing the price, which is a necessary element of every sale, holds that it must consist of either money paid or promised. [See 35 Cyc., 322.]

We agree, therefore, with the trial court in the holding that the sale referred to in the original contract was an executed sale, the price having been fixed and the title to the thing sold passed. That being true, such a provision would not prevent a stockholder who sold at that time from ever afterwards dealing with the stock or property which was the subject-matter of the sale. In other wards, the clause in the contract prohibiting compensation to the stockholders who were selling merely provided that they could receive no benefits as a purchaser or accept compensation as a seller that all of the sellers did not share in equally, and when the sale was executed and consummated, which it was when the stock was transferred, the cash and credits passed, the prohibition ended so far as it applied to the property which was the subject-matter of that sale.

The trusteeship placed in Oliver IT. Picher was not in legal sense a relation entering into the sale, hut rather was a necessary relation which grew out of the fact that a sale had been made and executed, and therefore any work that he did, or any compensation that might be due him in such trust capacity was not work or compensation directly or indirectly connected with the sale. It was work which sprang up out of conditions created after the sale was executed and hence the prohibition did not apply to him in that capacity.

After the death of Oliver H. Picher, the first trustee, the plantiff here, with others, executed the instrument of December 7, 1912, which designated the defendant here to act as trustee in settlement of the accounts. His services as such trustee were not rendered in the execution of the sale made in 1906, but were services rendered in a contract for the payment of certain money, and while it was a service which grew out of the fact that a sale had been made, it was not a service rendered directly or indirectly in and about the .sale.

There being no question as to the correctness of the value placed on the services in the allowance made in the judgment, and there being no prohibition against this trustee receiving compensation for those services, under the law in this State he is entitled to reasonable compensation. Having arrived at this result, it is unnecessary to discuss the exclusion of testimony offered by the plaintiff because a waiver of Oliver Picher’s right to compensation would not be binding upon the defendant’s right to claim pay for his services. We conclude that the judgment is for the right party, and it is affirmed.

Bradley, J., concurs. Cox, P. J., not sitting.