Otterson v. Thompson Manufacturing Co. , 44 Mo. App. 240 ( 1891 )

Thompson, J.

This is a suit in equity, by a stockholder of the Thompson Manufacturing Company, against that corporation and its directors, to have his contract of subscription, and the notes given in settlement thereof, rescinded and canceled on the ground of fraud. The facts, detailed at length in his- petition, on which he predicates his right to relief, are very much the same as those shown by the evidence and detailed in the opinion of this court in the case of Wells v. Jones, 41 Mo. App. 1. On the day after the petition was filed J. C. Koch, J. V. Koch and F W. Horn (hereafter spoken of as intervenors) filed their petition, asking leave to be made parties defendant to the action. They set up in their petition, substance, that they were partners, trading under the name of Koch, Sons & Co.; that, in June and July, 1888, the defendant corporation became indebted to them in the sum of $1,123.10, for which they afterwards recovered judgment in the circuit court of Greene county, the court in which this suit in equity was instituted. They also set up that execution on said judgment had been returned nulla bona; that the defendant corporation was wholly insolvent; that they had filed a motion, under the statute, for execution against the plaintiff in this suit as a stockholder in the defendant corporation, which motion was still pending. They also alleged that there were no assets of the defendant corporation available to pay their judgment, or available to satisfy other creditors of the company, of which there were many; that similar proceedings to those above mentioned were pending against other stockholders; and that the creditors had no recourse, except the subscription against the plaintiff in this action and other subscriptions of like nature, — all of which would hot be sufficient to pay the debts of the defendant corporation. They also set up that the plaintiff had given notes to the corporation in settlement of his contract of subscription to its capital stock, which notes had been, prior to any rescission of the contract of subscription, or to any attempt to rescind the same, assigned and delivered to an attorney of .the intervenors, formerly a defendant in this action, as security for the payment of the indebtedness due to them, and were now held by their attorney for them. They, therefore, prayed that they might be made parties defendant to the action, for the purpose of protecting their rights, and on the ground that they have an interest in the controversy adverse to the plaintiff, and that they are necessary parties to a complete determination and settlement of the matters set forth in the petition.

The court granted this motion, and the plaintiff excepted. Thereafter, the intervenors hied a separate answer, denying the allegations of the petition, and setting up substantially the same facts, which were recited in their petition to be allowed to intervene. The plaintiff hied a motion to set aside the order allowing them to intervene, which motion was by the court overruledj and the plaintiff again excepted.

On the following day, May 21,1890, the court made another order in the case, which, so far as the record discloses, was made by the court of its own motion. In this amended order the court recited the finding that Koch, Sons & Co. were necessary parties to a complete determination of this action, and changed its former order so as to require the plaintiff to bring them in as parties defendant by filing an amended petition. The order, as thus amended, reads: “And the plaintiff is ordered to file an amended petition bringing in said Koch, Sons & Co., as parties defendant.” The plaintiff, on the same day, moved to set aside this amended order, and, his motion being overruled, he again excepted.

Thereafter, Koch, Sons & Co. asked and obtained leave of the court to withdraw their former answer as having been prematurely filed, “and for the reason that the plaintiff now refuses to file an amended petition making them parties, as by the court ordered.” After-wards the remaining defendants, the Thompson Manufacturing Company, and the directors impleaded with them, filed their answer, denying the allegations of the petition, and alleging the same facts which had been alleged in the petition of Koch, Sons & Co., to be made parties. Immediately thereafter, and on the twenty-first day of May, 1890, as the abstract of the appellant, which is not challenged by the respondents,, recites, “ this cause having been called by the court for trial, and no oi)portunity having been given plaintiff to offer evidence in support of the allegations in his petition herein, and no evidence having been heard by said court on the issues in this cause, the court rendered judgment herein,” which judgment consisted of ah order dismissing the plaintiff’s suit, for the reason that he had failed and refused to file an amended petition, as required by the amended order of the court.

After unsuccessfully moving to have this judgment set aside, and saving his exceptions, the plaintiff prosecutes this appeal.

The plaintiff’s petition sets up that certain promissory notes were given by him to the defendant corporation in settlement of his contract of subscription; and his prayer for relief is, “that his contract of subscription to, and purchase of, said stock be rescinded and canceled, and that his said notes he rescinded and canceled.” The intervening petition of Koch, Sons & Co. sets up that these same notes are held by their attorney for them, as collateral security for the debt for which they obtained judgment against the corporation. Koch, Sons & Co. are, therefore, if the allegations of their petition are true, the beneficial owners of those notes. Such being their claim, whether well or ill-founded, it is not perceived on what theory the plaintiff can claim the right to have the notes canceled without making them parties. If he could have the notes canceled by a sort of proceeding in rem, without bringing into the court the parties ■ who hold the notes, it would certainly be very convenient for him ; but the law does not allow the rights of parties to be disposed of in suits against other people in this way. Prima facie, therefore, Koch, Sons & Co. were necessary parties, and no error was committed by the court in requiring the plaintiff to implead them as such. If the plaintiff had set up in his petition that the notes were held by any of the parties, whom he did implead as defendants, it might have been different; but he did not allege in his petition hy whom the notes which he desired to have canceled were held. There was, therefore, nothing in the pleadings to contradict the statement in the intervening petition of Koch, Sons & Co., that they were the beneficial holders of them.

The record, therefore, discloses no error in the order of the court requiring him to implead Koch, Sons & Co., as defendants, and no error in dismissing his suit for refusing to do so. This dismissal is one without prejudice, and the result is to remit the plaintiff to a new action, if he sees fit to bring one. The judgment is affirmed.

All the judges concur.