Stinebaker v. National Restaurant Co.

GOODE, J. (after stating- the facts.) — We might dispose of this appeal by affirming the judgment for lack of evidence to prove the leasehold was worth less than the value placed on it by the company. We cannot take judicial notice on this question one way or the other. But as the record is meagre and the court below did not proceed on the theory the stock was unpaid,there may have been some testimony of the fact, or it may have been conceded. Therefore it will be more satisfactory if we consider the appeal on the merits. We can see nothing favorable to-the plaintiffs in any aspect of the case. Although the board of directors passed a resolution which treated the leasehold as payment in full of the capital stock, it appears to have been understood from the first respondent should advance five thousand dollars as a payment on his stock. There is an inconsistency between what the board resolved and this arrangement, but business men frequently act irregularly in these matters. It is certain respondent agreed to pay and paid five thousand dollars in cash on his stock, thereby leaving only five thousand dollars unpaid. But to pay rent and other expenses and buy supplies, he advanced for the company seventeen thousand dollars in addition to the five thousand dollars-. These payments were made to keep the company alive and prevent suits against it, and while the company was still a going concern; and it is not disputed respondent may use them as a bar to plaintiffs’ recovery in this proceed [255] ing if they occurred under circumstances which made him a creditor of the company. The question of the right of a holder of unpaid shares against whom a judgment creditor of the company proceeds by motion under the statute, to avail himself by way of offset, of a debt the company owes him which had accrued prior to the return nulla bona of the execution against the company, has been determined in favor of the shareholder in several cases in this State. [Webber v. Leighton, 8 Mo. App. 502; Manville v. Roever, 11 Mo. App. 317; Insurance Co. v. Hill, 12 Mo. App. 148; Jerman v. Benton, 79 Mo. 148.] The reasoning on which the offset is allowed is expounded in the opinion in Jerman v. Benton, which may be read with benefit, as also may the opinions in Briggs v. Penniman, 8 Cow. 397, and Garrison v. Howe, 17 N. Y. 458. In the present case-appellants insist the money paid by respondent f&r the benefit of the company was advanced voluntarily; wherefore he did not become a creditor of the company and hence has no demand to set off against plaintiffs’ judgment. It is true the board of directors did not, by motion or resolution, formally request respondent to make the payments; but the testimony shows they were essential to the continuance of the company’s business and, indeed, the capital on which it subsisted; that they were made with the knowledge and approval of the president, were in each instance entered as a credit in favor of respondent on the books of the company, and the company so far assented to them and recognized them as creating obligations against it in his favor, that it executed notes to him on account of them for more than four thousand dollars; that is to say, for about all the money he advanced except the five thousand dollars paid on his shares and the twelve thousand dollars paid on his guaranty for rent. We consider the evidence was ample to justify the court below in finding the cash furnished by respondent above what was to be credited on his [256] stock, was advanced with the knowledge and consent of the managing officers of the company and was treated by them as creating an indebtedness of the company to respondent. The judgment is affirmed. All concur.