Scott v. Davis

200 S.W. 723, 198 Mo. App. 512, 1918 Mo. App. LEXIS 27
CourtMissouri Court of Appeals
DecidedJanuary 28, 1918
StatusPublished
Cited by2 cases

This text of 200 S.W. 723 (Scott v. Davis) 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
Scott v. Davis, 200 S.W. 723, 198 Mo. App. 512, 1918 Mo. App. LEXIS 27 (Mo. Ct. App. 1918).

Opinion

BLAND, J.

In 1884 a corporation to continue twenty-five years and known as “The John Sterling Royal Remedy Company” was organized under the laws of Missouri to manufacture and sell medicines. The capital stock consisted of five hundred shares. The charter expired in 1900', but without any knowledge of such expiration on the part of any of the parties concerned in the. transactions herein discussed the company continued to do business until October, 1914. On October 8, 1912, one James W. Oldham owned four hundred and sixteen (416) shares of said capital stock and one Mary Weil owned the remaining eighty-four (84) shares. On that date said Oldham by contract in writing (hereinafter called the Oldham contract) sold to said Mary Weil all of his capital stock in the company for the sum of six thousand dollars ($6000'), of which sum said Mary Weil paid one thousand ($1000) dollars in cash and was to pay the balance in monthly installments. To secure the deferred payments all of the capital stock of the company was surrendered and canceled and new stock was issued in the name of Mary Weil, who endorsed the same in blank and turned the certificates over to ^ said James W. Oldham. These shares at the time of the trial were in- the possession of the plaintiff, who was the assignee of said Oldham.

By the terms of the Oldham contract it was provided that in case Mary Weil made default in the payment of any sum of money when the same became due under said contract, that the said James W. Oldham then might declare the contract and all further right, title and interest of said Mary Weil in and to said certificates of stock terminated, save and except as to eighty-four (84) shares thereof, and that the said Mary Weil §.nd all persons acting under her should at once resign from all offices in the corporation and deliver said corporation and all of its assets over to said Old-ham; that all money theretofore paid to Oldham should be retained by him as liquidated damages.

[514]*514Mary Weil, as provided by said contract, took possession of the corporation and of all its offices, assets and business, and the business of the corporation was thereafter carried on by her, and she, as long as she retained her interest, made the payments provided for in the contract as the same became due. In February, 1913, Mary Weil by a contract in writing sold to the defendant, Mary M. Davis, two-thirds of her interest in the company, and it was provided in said contract that the payments on the Oldham contract should be continued by said Mary Weil and Mary M. Davis. Shortly there-’ after Mary Weil sold to Mary Marsh her remaining one-third of the stock and the latter sold this stock to Mary M. Davis. Mary M. Davis thereupon took possession of the corporation and its offices and assets, and the business was thereafter carried on by her and under her control until October 1, 1914, and up to that time all payments on the Oldham contract were met and paid by her.

In September, 1914, Mary M. Davis was notified by the Secretary of State that the charter of the company had expired. This was the first knowledge that any of these parties had of the expiration of the-corporation. Thereupon the defendant, Mary M. Davis, failed to do anything toward having the corporation wound up as provided by section 2995, Revised Statutes 1909, but proceeded to form a new corporation without notifying any of the parties interested of any of the facts. The new pompany was organized under the name of the “John Sterling Royal Remedy Company” with a capital stock of five thousand ($5000) dollars divided into fifty shares; forty-eight (48) shares .were issued to Mary M. Davis and one (1) share each to defendants, Irby W. Davis and Mary Marsh.

■ The property of the old company consisted of furniture, mailing lists, formulas, trade-marks, patents and the trade-name, The formulas and the trade-name had been in use for over twenty-five years. Although Mary ’ M. Davis at the trial claimed that nothing but the trade-name was used in the new corporation, the [515]*515evidence, we think, shows that all of the assets of the old company were turned over by her to,, and used by, the new company. Mary M. Davis at the. trial testified that, in addition, real estate of the value of three thousand ($3000) dollars was also a part of the assets upon which the new company was incorporated. ' We think a fair consideration of the evidence shows that this real estate was not in good faith, made a part of the assets of the new company, the property was re: conveyed out of the company only a few days after the incorporation. After the formation of this new company, Mary M. Davis refused to make any further payments on the Oldham contract and on October 17, 1914, plaintiff, who was then the owner of. said contract, served a written notice on her to the effect that the latter’s rights in all of the shares in the old company, except eighty-four (84) shares, had terminated. But Mary M. Davis refused to turn over to plaintiff the company property. On October 23, 1914, plaintiff instituted this suit in equity, setting forth in her petition the facts of the transaction, claiming to he the absolute ownei; of four hundred and sixteen (416) shares of the stock of the old company; praying that the court award her forty-one and 6/10 (41.6) shares of the stock of the new corporation (which was the proportion of the total number of shares in the new company that James W. Oldham’s four hundred and sixteen shares bore to the entire number of shares of the old company); that a temporary injunction be granted enjoining the defendant, Mary M. Davis, from in any manner disposing of her stock in the new company, and that the new company he enjoined from transferring any shares of stock on its hooks until the further order of the court and until the temporary injunction might be heard.

Upon, a trial of the case the court rendered' judgment that defendant, Mary M. Davis, should within ten days from the date of said judgment pay to the plaintiff forty-seven hundred ($4700) dollars, being the balance found to he due on the Oldham contract, or that she within said ten days, on behalf of herself and the John [516]*516Sterling Royal Remedy Company, transfer, by an instrument in writing, to plaintiff all of the rights and privileges “to use the trade-name, The John Sterling-Royal Remedy Company, in the manufacture and sale of medicine under the copyright formula and. trade-mark and' trade- name, and the right to advertise and conduct business under such trade-name in the sale of such medicines and remedies,” etc., “if such instrument be executed within said time then upon the execution thereof the said Mary M. Davis and John Sterling Royal Remedy Company, and the other defendants herein who hold under her, are hereby enjoined and prohibited from interfering thereafter with the full enjoyment of said rights and privileges, so granted to the said Lura O. Scott, and prohibited from causing John Sterling Royal Remedy Company interfering in any way therewith,” etc. It was further provided in said decree that if the money should not be paid nor said instrument executed, that the defendants be prevented from in any way interfering with the plaintiff herein from setting up and establishing a business to continue the manufacture and sale of medicine under said copyright formula,, etc., and that defendants be enjoined from using the corporate name, John Sterling Royal Remedy Company, in the sale of medicines or in its business. Prom this decree defendants have appealed.

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Bluebook (online)
200 S.W. 723, 198 Mo. App. 512, 1918 Mo. App. LEXIS 27, Counsel Stack Legal Research, https://law.counselstack.com/opinion/scott-v-davis-moctapp-1918.