State ex rel. Hickman v. Preferred Tontine Mercantile Co.

82 S.W. 1075, 184 Mo. 160, 1904 Mo. LEXIS 256
CourtSupreme Court of Missouri
DecidedOctober 27, 1904
StatusPublished
Cited by1 cases

This text of 82 S.W. 1075 (State ex rel. Hickman v. Preferred Tontine Mercantile Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Hickman v. Preferred Tontine Mercantile Co., 82 S.W. 1075, 184 Mo. 160, 1904 Mo. LEXIS 256 (Mo. 1904).

Opinion

MARSHALL, J.

This is a proceeding under the act of April 21, 1903 (Laws 1903, p. 110), by the Supervisor of Building and Loan Associations, to wind up the affairs of the defendant company, for the appointment of a receiver, and for an injunction. The trial court entered a decree for the defendants and the plaintiff appealed.

The allegations of the petition are: That the relator is the Supervisor of Building and Loan Associations ; that the defendant company is a domestic corporation, organized under article 9 of chapter 12, Revised Statutes 1899, for the purpose of buying and selling watches, clocks, diamonds, jewelry, precious stones, and any and all other kinds of merchandise, all for pecuniary profit and gain; that the defendant company is engaged in issuing contracts to citizens of this and other [170]*170states which, shall be redeemed or fulfilled by the accu-mulation of the funds arising- from the contributions made by the holders of such contracts; that the contracts are to mature and be fulfilled in the order of their issue; that by said contract the company agrees to give to the holders of such contracts commercial, white, flawless diamond's, represented by defendant to be greater in value than the amount paid in upon said contracts, together with the actual net earnings accumulated thereon; that the issue of such contracts is unauthorized in law or by the charter of the company; that in order to lawfully issue such contracts (under the act aforesaid), it was necessary for the company, as a condition precedent to doing business, to deposit with the State Treasurer in cash or bonds of the character specified in the act, the sum of $25,000, and to file with the Supervisor of Building and Loan Associations a certificate of the State Treasurer, showing- such deposit, and also to file a certified copy of its articles of incorporation, its by-laws, and a detailed’ statement of its plan of business, together with copies of all contracts proposed to be used in the conduct of its business; that the defendant company has failed to comply with all these prerequisites ; that tire defendant company is engaged in issuing such contracts contrary to law, and is insolvent and is unable to pay off all the debts due to its creditors and is unable to pay to the holders of such contracts the amounts paid thereon with three per cent interest, and has refused to pay the withdrawals to the parties entitled thereto, although the same have been demanded in writing- and thirty days’ notice thereof given, and has been unable to pay the same for a period of more than sixty days after demand in writing therefor; that the defendant company is not carrying out the purposes and objects for which it was incorporated, and is conducting- its operations to the detriment and prejudice of the people with whom it does business; that the company and its officers and its managers have diverted the ’ [171]*171funds of the contract holders from lawful channels and have converted them to their own use, thus rendering the company unable to pay the cancellation value of such contracts; and that said officers have deposited such money in their own names in the defendant bank. The prayer of the petition is for a decree winding up the affairs of the company, appointing a receiver, and for an injunction restraining the company and its»■.¡officers from further prosecuting said business and restraining such company and its officers and such bank from disposing of such money and ordering said money, and the books, papers, and other property to be turned over to the receiver, and for general relief.

Upon the filing of the petition the circuit court granted a temporary injunction, and dissolved it upon final hearing, but it was reinstated by this court pending the appeal.

The answer of the defendant admits the official character of the relator, and that it is a domestic corporation, with a capital of $10,000, and has its principal office and place of business in Kansas City, and then denies generally all the other allegations in the petition. The answer then pleads specially that the sole right of the relator to maintain this action arises out of the act of 1903, and-then says that said act is unconstitutional and void, because it violates the following sections of the Federal and State Constitutions, to-wit: First, section 8 of article 1, of the Constitution of the United States, in that, it interferes with interstate commerce; second, Section 28 of article 4, of the State Constitution, in that, the act contains more than one subject and the title of the act does not clearly express the subjects or objects of the act; third, article 3 of the State Constitution, in that, it vests judicial and legislative powers upon the Supervisor of Building and Loan Associations, by permitting bim to prescribe the kind of contracts such companies may use; fourth, section 30 of article 2 of the State Constitution, and section 1 of the 14th amendment [172]*172to the Constitution of the United States, in that, it deprives such companies of their property and' destroys their business without due process of law; fifth, section 15 of article 2 of the State Constitution, and section 10 of article 1 of the Constitution of the United States, in that, it impairs the obligation of a contract and is retrospective in its operation.

The reply is a general denial.

The case was tried upon an agreed statement of facts which showed that the defendant company had never complied in any way with the act of 1903'; that it issued! contracts of the character named; that it was unable to pay the holders of the outstanding contracts the withdrawal value thereof after thirty days ’ written demand therefor; that the only business the defendant company engaged in was the selling- of diamonds by contracts of the character charged; that the contracts aforesaid were all similar to and were in the following form:

Number 1989.

United States of America.

Organized Under .the Laws of Missouri.

THE PREFERRED TONTINE MERCANTILE COMPANY, ' Kansas City, U. S. A.

Diamond Contract.

This contract is one of the series of like contracts issued during the week in which this is dated.

Know all men by these presents, That if Mrs. C. H. Broughton, the holder hereof, shall first well and truly make each and all the payments herein provided for; to be made by the holder "hereof at the times and in the manner herein specified, time, manner and the amount of payment being of the essence hereof, The Preferred Ton-tine Mercantile Company, of Kansas City, U. S. A., will deliver to the holder hereof or estate under and according to the terms and conditions and in the manner and order hereinafter set forth, commercial white, clear and flawless diamonds, of the weight of two carats, and of the value of one hundred dollars per carat.

The holder hereof promises and agrees to pay to the company, at its' home .office in the city of Kansas City, U. S. A., the full sum of ONE HUNDRED AND TEN DOLLARS in the following manner, to-wit: Five dollars on the delivery hereof, the receipt of which [173]*173is hereby acknowledged, and one dollar and twenty-five cents on or before the last day of each calendar week following the date thereof until $110 is paid.

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Bluebook (online)
82 S.W. 1075, 184 Mo. 160, 1904 Mo. LEXIS 256, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-hickman-v-preferred-tontine-mercantile-co-mo-1904.