Court Opinion

ID: 7807500
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:08:21.038018+00
Date Added: 2024-06-11T16:30:22.162661
License: Public Domain

DISSENTING OPINION. McCulloch, C. J. It is well that the court has so plainly labeled the contract in this case as one for the lending of money, otherwise it would never be recognized as such. The plain English of it is for the sale -of stock of a corporation. It not only provides for the sale of the stock to appeliee, but stipulates that he is to be made a director and the secretary and to receive a salary as such. He does not fail in his complaint to sue for his salary as secretary, and it appears that he has actually been drawing a salary, yet his attitude now is one purely of lender of money to the corporation. The contract is very plain in its terms and is one that was dictated by appellee himself and written by his own attorney. I am unable to -see how it can be treated as a contract for the loan of money. It does provide that appellee “shall have the right at any time to withdraw the amount invested by him, if he sees fit to do so, upon tendering back the certificates of stock held by him,” but that clause, instead of making it a contract for the loan of money, clearly characterizes it as one for the sale of shares of stock, with the guaranty that the dividends should amount to as much as 10 per cent, and that the shares would be repurchased by the corporation if the purchaser so elected. No amount of testimony -with respect to what the parties actually intended can alter the express language of the contract, for it must be judged by what was written down and not by what the parties thought they were writing. The rule that contemporary or antecedent negotiations are merged into the writing is so elemental that it is unnecessary to cite authorities. Parol evidence of such negotiations is inadmissible to contradict the express terms .of the contract. Treating the contract as one for the sale and repurchase of the stock at a guaranteed price, it was clearly ultra vires and void. If the corporation could make a valid contract of that kind with appellee, it could make the same with every other stockholder, .and in that way could denude itself of all of its assets, leaving innocent stockholders and creditors without anything but the empty shell. The case of Boley v. Sonora Development Co., 126 Mo. App. 116, 103 S. W. 975, is precisely in point, and it was there held that “a corporation has no power to sell stock .and agree with the purchaser to buy it back within a given time at the price paid, upon his election to sell, thus releasing him from his responsibility as a stockholder.” To the same effect see Chrisman-Sawyer Banking Co. v. Independence Wool Mfg. Co., 168 Mo. 634, 68 S. W. 1026, and Wilson v. Torchon Lace & Mercantile Co. (Mo.), 149 S. W. 1156. The reasons are so clearly stated in those opinions, it is unnecessary to go into the subject further, for the injustice oif permitting* such conduct is obvious. Now, if Robinson and Peay, the persons who negotiated this contract with appellee, were the only ones interested in 'the corporation, the contract might be upheld as their own and they would be estopped, as sole owners of the corporation, to raise the question of ultra vires. But such is not the facts of this case. It is true, there is evidence tending to show that 'they were the only two at the time the contract was made, except Robinson’s son, who owned one qualifying .share. The evidence shows, however, that at the time this suit was brought there was another stockholder owning eighty shares of stock, and that there, were creditors, and that both Robinson and Peay had hypothecated their own .stock to .other persons. Subsequent purchasers of stock .and subsequent creditors of the corporation are entitled to protection from the effects of such a contract .as this and they are not chargeable with notice .of its provisions. The policy of the law is to facilitate the negotiability of corporate stock ¡by treating it as free from .all equities and liens except such as are created under statutes. Bankers Trust Co. v. McCloy, 109 Ark. 160. The same principle would seem to forbid the making of such a contract .as this which gives a preference to a stockholder thus favored. Appellee shows in his complaint that the corporation is insolvent and is tottering toward the doors of the bankruptcy court, and yet the decision in this case permits him, after having speculated upon the contingencies of the investment, to hold the corporation liable at the expense of other stockholders and creditors who doubtless dealt with it on the faith that it is assets would not be ■spent in retiring any of its stock. Justice Smith concurs in the dissent.