author: LAMM, J.

text:
    HIMMELBERGER-HARRISON LUMBER COMPANY, Appellant, v. SIMON E. CRAIG.
    Division One,
    February 28, 1913.
    1. EJECTMENT: Legal Title: Adverse Possession as Defense: Burden. Tbe record legal title being concededly in plaintiff, tbe defense carries the burden of proving all the essential elements of an adverse possession of such character as overthrows the legal title, and establishes a paramount outstanding title, or his own.
    2. -: Adverse Possession. A possession subordinate and subservient to the true title lacks the element of being hostile and adverse to the true owner.
    3. -: -: Claim of Ownership. A party does not hold adversely to the true owner within the purview of the Statute of Limitations unless his possession is under claim of right as against such owner. Under a claim of ownership he must raise a flag of hostile possession, and maintain it for a sufficient length of time for it to ripen into title. An intent to claim adversely is the principal guide to be relied on to establish hostility.

      4. -: -: Against County: Swamp Lands. On the authority of former decisions and governed by the rule of stare decisis, it is assumed that a county .may lose its title to swamp lands, by adverse possession, the same as a private owner.
    5. -: -: Claim of Ownership: County’s Title Acknowledged by Application for Patent. When defendant applied to the county for patents to crystallize his squatter’s right into a legal title, he thereby solemnly characterized his possession as subordinate to the true title of the county.
    6. -: -: -: Improvements. Where the arrangement between the county and a contractor to ditch and drain swamp lands, to be paid for in lands, was, that any person in actual possession and who had made improvements might, by proving those facts and paying to the county $1.25 per acre for such contractor, have a patent upon the completion of the work, improvements made by defendant were supposably made in reliance upon the generous disposition of the county to give settlers the preference when patents were to be issued, and are not therefore to be taken as the assertion of a dominant claim hostile to the county, but only as an evidence of his good faith and intention to pay to the county the money when tlie time to issue the patent arrived; and having failed to pay the money, his possession will not be held to have been adverse to the county, or to the man who was awarded the patent.
    7. -: Paying Taxes. The payment of taxes is evidence of the existence of a claim of title by adverse possession.
    8.--: Landlord and Tenant: Estoppel. A. defendant cannot be put in possession of real estate by the owner of the legal title under a contract creating the relation of landlord and tenant, and then by a change of mental attitude assert the right to hold over under a claim of ownership.
    Appeal from New Madrid Circuit Court. — Hon. Henry G. Riley, Judge.
    Reversed and remanded {with directions).

      Oliver '& Oliver for appellant.
    (1) Appellant having shown a perfect legal title to the land in question and that the respondent was placed in possession of it in 1905, as the tenant of appellant, defendant could not subsequently set up an adverse holding. See. 7885, R. S. 1909. (2) Having shown a perfect legal title to the land in question, and having further shown that defendant entered into the possession of this property as the tenant of appellant, and was in possession at the time of the bringing of this suit, after notice to surrender the possession thereof, appellant was entitled to a judgment against respondent under the ejectment statute. Sec. 2389, R. S. 1909. (3) There is absolutely no testimony in this case showing that this defendant, or either of the Craigs, ever held this land adversely to the appellant or its grantor — the county of New Madrid — until after 1906. This being so, appellant was entitled to judgment at the close of all the evidence, and the court erred in refusing to give the peremptory instructions at the close of the evidence. Feller v. Lett, 225 Mo. 326; Hunnewell v. Adams, 153 Mo. 460; Stevenson v. Black, 168 Mo. 560; Chilton v.- Comanianni,, 221 Mo. 685. (4) The court should have declared the law as prayed for in’ the third declaration asked by appellant. The only claim set np by any of these “squatters” was to the “improvements” on the land. ' Hunnewell v. Adams, 133 Mo. 443; Bernarde v. McElroy, 110 Mo. 659; Bowman v. Lee, 48 Me. 335; Hunnewell v. Burchett, 152 Mo. 611.

      Henry 8. Shato for respondent.
    (1) A title acquired by adverse possession not only bars the recovery by the owner of the record title, but extinguishes, his title and vests it in fee in the adverse occupant. The title is one in fee simple, and is as perfect a title as one by deed, or patent or grant. "When once acquired it continues until conveyed by the possessor or lost by another adverse possession. Boyce v. Railroad, 168 Mo. 583; Long v. Lackawana C. & I. Co., 233 Mo. 713; Adams v. Gossmon, 228 Mo. 566. (2) Color of title need not be a valid title. Any writing which purports to convey land and describes the same is color of title, though the writing is invalid and conveys no title. Allen v. Mansfield, 108 Mo. 343; Brewing Co. v. Payne, 197 Mo. 422. A description though indefinite, is sufficient if the court can, with the aid of extrinsic evidence, which does not add to, enlarge, or in any way change description, fit it to the property conveyed by the deed. Thornton v. Railroad, 40 Mo. App. 265; 1 Cyc. 1091. (3) A trespasser without any shadow of title who enters upon land and holds adversely to the true owner for ten years will become the owner, at the expiration of that period. Wilkerson v. Eiler, 114 Mo. 245; Bushey v. Glenn, 107 Mo. 331; Boyce v. Railroad, 168 Mo. 583; Quick v. Rufe, 164 Mo. 408. (4) Though the law confines one whose entry is initially wrongful to such part of the land of which he actually holds possession, yet such possession will include all that is used as an adjunct or necessary to the enjoyment of that actually cultivated and will be estimated by natural or legally established boundaries. County v. Vowells, 101 Mo. 225; Bonsor v. County, 204 Mo. 84; Nall v. Conover, 223 Mo. 477. (5) The Statute of Limitations runs against the county as well as against individuals except where it holds property for public, pious or charitable uses. R. S. 1909, sec. 1886; County v. Chouteau, 120 Mo. 577; Nall v. Conover, 223 Mo. 477. (6) There is no estoppel in this case, because the very fact that the county court excluded lands claimed by others from the patent to the lands conveyed to Himmelberger was notice to him that there were adverse claimants to and occupants of many tracts of these lands, hence he bought with his eyes open. If Mrs. Craig’s title to the land in suit had ripened into a perfect title by limitation, she deceived no one and defrauded no one by insisting on holding what was hers, without leave or license from the county court or any one else. Tennent v. Ins. Co., 133 Mo. App. 345; "Williams v. Butter-field, 214 Mo. 412. (7) Since the court only entertained an application for eighty acres, Mrs. Craig had a perfect right to consummate her title to one "eighty-acre tract and to hold the other under adverse possession if she so desired, and no one was defrauded thereby. Mather v.'Walsh, 107 Mo. 121. (8) A party in possession of land may fortify his right thereto by acquiring any outstanding interest therein, without thereby weakening the force or effect of his possession. Mather v. Walsh, 107 Mo. 121; Finlay v. Babb, 173 Mo. 257.
   LAMM, J.

In July 1907, plaintiff sued in ejectment for eighty-acres, viz., the southwest quarter of the northeast quarter and the northwest quarter of the southeast quarter in section 18, township 22, range 11, New Madrid county, on what is known as “a ditch title,” laying ouster as of January 1st of that year.

The pleadings. The petition was conventional. Defendant answered by general denial, modified by the averment that he and those under whom he claims have been “in open, notorious and adverse possession of the premises in plaintiff’s petition described for more than thirty years.”

The replication put in issue the fact of adverse possession under a claim of title as against the legal owner, and further pleaded the existence of a certain Luce contract, whereby Luce purchased the land in question with a great body of other swamp land from New Madrid county, in consideration of doing certain reclamation work, which contract was renewed with the Luce heirs and contained a provision whereby actual settlers might make application .for the land which they had improved in the swamps to the extent of eighty-acres, and by proving certain facts might obtain a patent therefor by paying in for the benefit of the Luce heirs $1.25 per acre, the contract price to them; that the Craig family made applications under that contract and had land assigned to them in some instances; that defendant (a member of that family) made an application for other land which was denied. That these things happening in 1899, the Craigs (including Simon) thereby recognized the legal title was in New Madrid county and that plaintiff’s grantor was entitled to and received the proceeds of the land in section 18 patented to the Craigs. Thereupon plaintiff’s grantor, having fully performed the reclamation contract, at the same time received a patent for the residue of section 18, including the land in dispute. That in the adjustment thus made the Craigs (including Simon) admitted themselves squatters and as not asserting any adverse possession; that plaintiff’s grantor bought in good faith for value without any knowledge of defendant’s claim and in 1903 plaintiff went into peaceable possession; that thereafter it put defendant in possession under an arrangement (amounting to a tenancy); that thereafter defendant, repudiating such arrangement, attempted to hold possession against plaintiff’s will. Wherefore estoppel is pleaded.

At a trial to the court without a jury, the judgment gave one forty to plaintiff, the other to defendant. Defendant abides. Plaintiff appeals.

The facts:

The legal title of record is in plaintiff. It passed out of New Madrid county to one Himmelberger in 1899, and through mesne conveyances to plaintiff in 1902. Defendant has no record title whatever, but claims through adverse possession. The whole of section 18 was swamp land, as was much other land in New Madrid. The title thereto, as a matter of history, emanated from the general. Government to the State in the fifties and was by the State granted to the respective counties in whose borders the swamp land lies. In 1885 New Madrid county, as it had a right to do, made a contract with one Luce to do certain reclaiming work in ditching, and take his pay in swamp lands, including section 18, at $1.25 per acre. While there is some comment on the fact that this contract disposed of a “principality” yet its validity is conceded. Luce dying before full performance, that contract was renewed with his heirs and Himmelberger became interested therein. It seems that from an early date, maybe ever since the earthquake, hunters and trappers now and then went out into these swamps, sometimes built cabins, sometimes made clearings, called-locally “openings,” and lived there, either at all times or at spells, plying their venturesome and primeval vocation, and sometimes raising crops about their cabins to subsist upon. In the apt language of the country, harking back to pioneer times for the tang of it, such cabin and clearing was called “a claim,” “an improvement,” “a possession.” Sometimes these claims were “jumped.” Sometimes a squatter sold what he called “his right to possession” or “possession” — all of which bargaining was seemingly regulated by local usage, a Mud of “breast law,” if we may borrow a phrase from Manx jurisprudence.

Realizing the practical difficulties of the situation, with its possible attendant equities, to deal tenderly with those who had such “claims” on county lands (as these swampy lands were) the Luce contract provided inter alia, as follows:

“It is further agreed that any persons who are now in the actual personal possession of any of the lands, the? legal title to which is now in New Madrid county, and who have made improvements, and are now residing thereon, shall have the right to purchase said lands, at the time the same are patented or conveyed to the parties of the first part, their heirs, executors, administrators or assigns, at and for the price of one dollar and twenty-five cents per acre; but this provision shall only apply to improvements made at this time, and shall in no event entitle any such person to more than eighty acres.”

At a certain time in 1899 full performance was claimed under the Luce ditching contract. Thereat .the question of issuing a patent for such performance together with the matter of adjusting the claims of those persons “now in actual possession of any of the land” and issuing a patent to them on the payment of the entry price for the use of the ditch contractors, came' to a head. Accordingly at that time the Craigs took advantage of the Luce contract to make application for certain lands, and sought the privilege of paying-in the purchase price for the benefit of the contractors and receiving a patent for lands they might prove up under the terms of the contract, and which, by the contract, the county had bargained away to*the Luces and their assigns.

Before setting- forth the adjustment made at that time, it is well enough to.go back a little and bring down another thread of the story — a story in its beginning by no means green. In 1868 one Baker and one Beckwith, hunters both, penetrated the swamp covering section 18, ran up a “bark shanty,” and deadened some trees. In the words of one of defendant’s witnesses: “They put some poles across and roped them and covered them with sweet gum bark.” Their habitation for the first winter amounted to no more than “a roof,” and (quoting) “the next fall they made a pole house and used leaves.” As we gather, about 1878 a Mr. Glover took over this “possession.” What became of Baker and Beckwith, and tlie character of their occupation or “-improvement,” is dark. Mr. Glover’s father joined him and the two made some “improvements,” building a fence, doing some clearing and living there. “It was just a wild woods” and the Glovers had “only a little shanty.” After ten years they sold to Hazel by word of mouth and he moved in. Presently, in 1887, Hazel sold his “possession” or claim to John L. Craig, the paternal ancestor of defendant Simon. The form of this transfer was a quit-claim deed whereby Hazel and wife conveyed to said Craig by the following description: “All of a certain improvement and premises known as the Glover farm lying and situate about two miles southeast from the old Brooke Mill site, containing fifty acres of improved land, together with ‘all the buildings and fencing.” The deed further described the premises as “situate in the county of New Madrid, State of Missouri.”, This instrument, for an expressed consideration of $500, was acknowledged and delivered but never recorded. John L. Craig took possession under it. He seems to have come into New Madrid from Dunklin, and whether he knew aught of the Luce contract, then two years old, does not appear. Defendant put said instrument in evidence for the purpose of showing color of title. Craig’s family consisted of a wife and children. At an unnamed time. after enlarging the area of cleared land and planting an orchard, he died and some of his children died. In 1899, when the county was about to adjust its swamp land matters and issue patents under the Luce contract, as heretofore pointed out, there were living on the premises Mr. Craig’s widow, Susan; and two or three of his hoys were living with their mother or in the vicinity — one of them, John D., a minor. The plan adopted for getting patents to what they claimed was this: Susan applied for the eighty acres, by description, lying west of the eighty in dispute and coterminous with it. She filed her claim “as an actual settler,” “in possession.” She enumerated the improvements as “one dwelling house, barn, out buildings and forty acres cleared land in cultivation and other improvements of the value of $500,” and applied under the provision of the Luce contract for the privilege of paying in $1.25 per acre and taking a patent. Another son, William, applied for forty acres elsewhere in the section. Defendant Simon, another son, applied for eighty acres in “range 10,” which he claimed he had in possession and upon which he asserted he had made improvements of the value of $150. He asked to enter that, pay the entry price arid get a patent. The same attorneys represented all these Craig claimants and (evidently as the result of a family council) petitioned for the lands in writing, making such demands as they concluded had substance. Evidence was heard and Simon’s claim was rejected, hut Susan’s and William’s were allowed and patents issued to them for the land they respectively claimed. As the result of these hearings and this adjustment, a patent also issued to plaintiff’s grantor for the residue of the land in section 18, including the eighty in dispute, and plaintiff’s grantor received the money paid in by William and Susan in lieu of the land they received.

Coming down to 1902 or ’3, at the time one Dixie "Wells bought the eighty patented to Snsan, the situation, we take it, was this: The lines had not been run through the swamps and were not known with accuracy. When they were run presently, it was found that the old log house, in which the Craigs had been living as their family residence, fell a little east of the land patented to Susan, i. e., on the eighty in dispute. It seems the barn also fell east of the line. There was a “box shanty” on the eighty patented to Susan. When it was built is dark. In that box shanty Simon lived at the time Dixie Wells purchased. Another son, Lee, who afterwards died, had been living in the family residence, and had some trivial household goods there. By the subsequent survey, a great portion of the clearing was found to be on the eighty patented to Susan, but ten acres or so of it spread over on the eighty in dispute and there were some old apple trees on that eighty. The mother (at this present time) had moved to a nearby village, Malden. There was a son, John D., as said, not yet of age, who by some family arrangement asserted a “claim” on one forty of the eighty patented to his mother — the nature of which is undisclosed.

In this situation of things one Dixie Wells got deeds to the mother’s eighty from Susan and John D. (from the latter when he attained his majority). Dixie testifies that, as part of the bargain, he got the whole “claim” of the Craigs and their whole “possession” for one thousand dollars paid down presently. There is some dispute whether the entire “claim” and “possession” were.sold and passed for said purchase price, and some testimony that the mother wanted a cow thrown into the trade as a consideration for parting with her whole “claim” and “possession,” and some that Dixie “laughed” at her bovine suggestion. There is also some testimony that the mother was to pay Simon and another son $50 apiece as their shares of the $1000 she got by the sale. Be that as it may, their minds met finally, the transaction was an amicable one and to all appearances seemed final and ended their ■ possession. Accordingly when Dixie bought, the Craigs one and all moved away at once with all their belongings and surrendered to him full possession of the whole clearing and all buildings. Under the purchase, the lines not being yet. accurately established, as said, he took possession of it all precisely as the Craigs held it, including the former log residence and the adjacent cultivated land on the eighty in dispute. He at once put a tenant in possession and thereafter farmed the entire clearing for two years or so without protest from any source. He then sold and conveyed, by the description in his own deeds, to a Mr. Stokes. As we get it, the lines had then been run and both Stokes and Wells recognized and conceded that ten acres or so of the clearing, the log house and some apple trees were in fact on plaintiff’s eighty and belonged to plaintiff. Presently after that sale, by the act of plaintiff and Stokes, operating through Wells, in order to keep the premises' (both eighties) occupied, an arrangement was made with defendant Simon to move there and hold them for the owners under a cropping arrangement in the nature of a tenancy. Simon, who had been away for several years, living here and there, at that time lived in a tent on the edge of the swamp at “ditch number three,” some distance away. In pursuance of that contract and not otherwise, he moved from his tent on ditch number three into his mother’s former residence and took up the performance of his cropping agreement. After a season or so there he conceived the idea of repudiating the arrangement by which he got possession, and of asserting his own right to the possession abandoned when Wells bought. Accordingly, on notice from plaintiff to quit at the end of his time, he refused to go, and this suit was brought.

Plaintiff had paid all taxes save one year (on •which, there was no proof); defendant has paid none.

Defendant, though in court, did not testify.

Such are the salient facts as near as we can make them out from a record a little obscure in some incidental features.

On such record, plaintiff should have recovered both forties on the strength of its record title. This because:

The record legal title being concededly in plaintiff, defendant carried the burden of proving his defense, viz., all the essential elements of an adverse possession of such character as overthrew the legal title and established a paramount outstanding title, or his own. A possession subordinate and subservient to the true title, a friendly one, lacks the element of being hostile and adverse to the true owner. Nor does a party hold adversely to the true owner within the purview of the Statute of Limitations unless his possession is under a claim of right as against such owner. Under a claim of his own, he must raise the flag of hostile possession and, planting himself under its folds, keep it flying through such effluxion of time as ripens into a title by adverse possession. [Feller v. Lee, 225 Mo. l. c. 326-7, and cases cited; McCune v. Goodwillie, 204 Mo. l. c. 339, and cases cited; Bowman v. Lee, 48 Mo. 335; Wilkerson v. Eilers, 114 Mo. 245.] This proposition is frequently illustrated in disputes over party lines where one party holds merely subject to the final establishment of the true line.

If the question was res integra, something of substance could be said against the doctrine that the title of a county to its swamp lands could ever be lost by mere adverse possession. In 1866 there was enacted a law exempting lands granted “to any public, pious or charitable use” from the provisions of the Statutes of Limitations. [R. S. 1909, sec. 1886.] The broad definition of a charity, in Missouri Historical Society v. Academy of Science, 94 Mo. l. c. 466, might have been construed to apply to grants to counties of swamp lands, by interpreting the grant of them by the General Government and State as for the “benefit or amelioration of the condition of mankind,” or as one “for the public convenience,” hence, in a broad sense, a charity under the definition in that case.

But the question is not an open one, and as our decisions in that behalf constitute a rule of property, the doctrine of stare decisis should be applied with rigor. In the administration of real estate law, we should “stand super antiguas vias, stare decisis.” [Whelpley, J., in Adams v. Ross, 30 N. J. L. l. c. 513.] This court has held that the statute referred to does not apply to swamp lands, and that the ownership of the county of such particular lands is subject to the ordinary ills and vicissitudes of private ownership of lands — among them, the danger of losing such lands by adverse possession. [Hunter v. Pinnell, 193 Mo. 142; Palmer v. Jones, 188 Mo. 163; Dunklin County v. Chouteau, 120 Mo. 577.]

Assuming the law to be as just announced, yet possession to be effective must be adverse in the stringent sense heretofore pointed out. We do not think that of defendant and those under whom he claims was of that character. When the Craigs applied for patents to crystallize their squatter’s rights into a legal title, they, by that act, solemnly characterized their possession as subordinate to the true title of the county. Not only does that admission stand against them but there is nothing in this case to show that their prior possession was intended as hostile to the county. The intent must be held the principal thing and guide the acts relied on to show hostility. [Long v. Coal & Iron Co., 233 Mo. l. c. 740.] In dealing with swamp lands the county of New Madrid had adopted the policy of giving reasonable protection to actual settlers by granting patents to them on payment of tbe legal rate per acre. It is not at all insupposable that the improvements made in the swamp by the Craigs were made-in reliance on the generous disposition of the county to give settlers the'preference when patents were to be issued on payment of the price of the entry. Under the state of . the proof, it would seem that was the attitude of the Craigs, summed up in: No entry money; no land. The mere fact of making improvements, therefore, under the peculiar circumstances of this case, is not to be taken as the assertion of a dominant title or claim hostile to that of the county, but only as evidence of the settler’s good faith in reliance on the county’s benevolent disposition to deal fairly by him and take his money when the time comes for the title to pass out of the county. What happened in this case is in line with that hypothesis.

We are of opinion, furthermore, that on this record estoppel was well pleaded in favor of plaintiff and should have been given effect. Look at it. This defendant stood by, permitted the patent of the county *ssue plaintiff’s grantor for the land in dispute without lifting a finger of protest, and to be received as so much payment on money due plaintiff’s grantor. He asserted no title to this land under the Luce contract or otherwise at that time, but did elect to assert his right to other land as an actual settler. In doing so he was not inops consilii, but took his position and made his election on legal advice.

Not only so but neither he nor those under whom he claims paid any taxes on the land after the title passed out of the county and the land became taxable. do n°l say the mere payment of taxes creates title or the mere non-payment of them divests title. But we do say that the payment of taxes is evidence of the existence of a claim of title by adverse possession. [Turner v. Hall, 60 Mo. 271.] The thirty-year Statute of Limitations, recognizes that element as of significance. [B. S. 1909, sec. 1884]

Nor are we willing to stand for the proposition that a party can he put in possession of real estate by the owner of the legal title under a contract creating a relation in the nature of that of landlord anc[ tenant, and then by a change in mental attitude assert the right to hold over under a claim of ownership, and have such right allowed in a court of justice in a possessory action by the true owner. May A get possession, as tenant of B and then repudiate B’s title and hold over as owner? It is not so written in the law.

Our conclusion is that the judgment nisi should have been in favor of plaintiff for the recovery of all the land sued for, instead of for one forty, as it was. As plaintiff was awarded no damages on the forty recovered and does not complain of that feature- of the judgment, we shall assume it waives the question of substantial rental values and damages.

Let the judgment be reversed and the cause remanded with directions to enter a judgment in favor of plaintiff for the possession of the described eighty acres with nominal rents and damages and a writ of ouster and execution. It is so ordered.

All concur.


source: Caselaw Access Project

author: BOND, J.

license: Public Domain

text:
    DAVID BIGGS, Trustee of KLINE-DRUMMOND MERCANTILE COMPANY, Appellant, v. EDWARD WESTEN et al.
    Division One,
    February 28, 1913.
    1. TRUSTEE IN BANKRUPTCY: Right to Sue: Real Party in Interest. The trustee in bankruptcy is in law the representa- • tive of the creditors of the estate only in the sense that it is his duty to collect, for their benefit and for due administration in the bankrupt court, all the assets of the estate. But it is not his duty to represent any creditor in the matter of establish-

      ing and prosecuting his claim against the bankrupt in any court. It is not his duty to appeal on behalf of a claimant of the bankrupt estate whose claim, in a suit in the circuit court by the trustee against the stockholders of the bankrupt corporation, has been denied, and only for the purpose of having such claim established, where such claimant could himself have appealed in his own right. But owing to the unusual circumstances of this case, the appeal is not dismissed on the ground that it is not prosecuted in the name of the real party in interest.
    2. CORPORATION: Unpaid Stock: Creditor: Knowledge. A creditor of a corporation, who becomes such with knowledge that its common stock, though purporting to have been paid in full, was in fact neither paid nor to be paid, but was issued merely as a bonus for the subscription and payment for preferred stock, cannot enforce his claim against the corporation by compelling its shareholders to pay to the corporation, its trustee or other representative, any portion of the common stock so issued. A claimant who subscribed for and received a certain amount of preferred stock of a corporation, and one-half as much common stock as a bonus for his subscription and payment of the preferred at par, and with knowledge of an agreement that the common stock, _ though reciting it was full paid, was not to be paid, and thereafter exchanged all his stock, preferred and common, for the bonds of the company, cannot, upon the failure of the company, compel an assessment on the shareholders of the common stock to pay the bonds held by - him.
    Appeal from St. Louis City Circuit Court. — Ron. George R. Williams, Judge.
    Affirmed.

      Bland & Gave for appellant.
    (1) The payment of all of the bonus stock is necessary for the payment of all of the creditors unless some are held to be estopped, and there is nothing in the evidence which would prevent the company itself, even though a going concrn, from enforcing the payment of this bonus stock and therefore no creditor can, on any theory, be estopped. The holders of this stock are indebted to the corporation itself and the amounts due thereon are an asset of the company and the plaintiff trustee in bankruptcy is entitled to recover the same for the payment of any creditors. (2) There is some evidence from which it might be inferentially said that there was a sort of general oral understanding among the promoters and organizers that the payment of this stock would not be enforced, but it is not sufficient to constitute a contract, even on the part of the promoters. And, furthermore, if it were sought to avoid liability on the subsequent absolute contract of subscription on the ground that these oral terms were to be inserted therein and were left out through fraud, accident or mistake, it would be necessary so to plead. None of the defendants have done so. Railroad v. McCormick, 90 Iowa, 446; Railroad v. Conway, 177 Pa. St. 364; Payson v. Withers, No. 10664 Fed. Cas. (3) Again, even if there had been such a contract between the promoters and prospective stockholders, or such representations by the promoters, it would not be binding on the corporation unless subsequently ratified by it or in fact remade by it. Joy v. Manion, 28 Mo. App. 59; Ollesheimer v. Thompson Mfg. Co., 44 Mo. App. 172; Haskell v.- Sells, 14 Mo. App. 91; Hill v. Gould, 129 Mo. 106; Chouteau v. Dean, 7 Mo. App. 210; Prilsining v. Templeton, 2 Mo. App. 424. There is absolutely no evidence of any such ratification or new contract on the part of the company. (4) On the contrary the contract entered into between the subscribers to the articles of association and the subscription agreement and the corporation was a written promise to pay for the stock subscribed for, absolute on its face, and purporting to be complete, and it cannot be varied, even as against the corporation, by proof of any oral agreement or understanding between the corporation or its promoters and such subscribers either contemporaneous therewith or prior thereto. It is needless to discuss that proposition, however, as the record fails to disclose any contract between the defendants and the corporation other than the one evidenced by the subscription to the articles of association. Joy v. Manion, 28 Mo. App. 59; Cook on Corporations, sec. 137; Railroad v. Conway, 177 Pa. St. 364; Nebraska Expo. Co. v. Townley, 46 Neb. 893; Railroad v. McCormick, 90' Iowa, 446; Railroad v. Conway, 177 Pa. St. 364; Martin v. Remington, Martin & Co., 88 N. Y. Supp. 573; Merrick v. Consumers H. & E. Co., Ill 111. App. 155. (5) Unless then some corporate action was taken subsequent to the signing of the articles of association by which the corporation contracted and agreed to waive the said payment or to accept something less than full payment,. or property in payment, the said stockholders are still bound to the corporation itself by their unconditional promises to pay. The evidence fails to show any such subsequent agreement. (6) The fact that the certificates of stock contained the words “full paid and non-assessable” is immaterial. At most the legal effect of the words in question was a stipulation against liability to further taxation after the holder had fulfilled his contract to pay the par value of the stock.. Van Cleve v. Berkeley, 143 Mo. 119; Upton v. Tribilcock, 91 U. S. 48.

      W. F. Evans, Marion C. Early, and Frank K. Ryan for certain respondents. G. B. Silvermaxi, Carl Otto, Igoe £ Carroll, and Julius T. Muench of counsel. Stanley B. Pearce for respondent J. tl. Christopher; Letois £ Rice for respondent Graham Paper Company; and Stexoart, Bryan £ Williams and Harold R. Sxnall for respondent J. E. Smith.
    (1) Each and every stockholder who extended credit to the corporation with knowledge of the conditions under which the common stock was issued is estopped to assert any liability against any shareholder for any unpaid part” on such stock. It therefore follows that one extending credit with such knowledge could not create a preference in his own favor. Bell’s Appeal, 115 Pa. St. 921; Trust Co. v. McMillan, 188 Mo.. 547; Meyer v. Mining Co., 192 Mo. 162; Dickerson v. Trust Co., 176 U. S. 161. (2) Johnson received 61 shares of common stock through the contract between the American Supply Co. and the Kline-Drummond Mercantile Co. and is in this case joined as a co-defendant. It was found that he received this stock with full knowledge and without paying for it. He should beheld to pay his pro rata share on this stock and the-judgment, to that extent, should be modified, if the appeal is permitted to stand. Smith v. Heidecker, 39 Mo. 157; Moore v. Bank, 111 U. S. 156. (3) Nor could he secure a better standing’ in a court of equity by arranging with the trustee, whose duties are limited by law, to aid him to establish his claim.
    STATEMENT BY THE COURT.
    This is an action in equity to recover from. J. B. Johnson and other stockholders in the KlineDrummond Mercantile Company, a corporation, payment of the par value of its common stock which had been issued without payment and as a bonus-to the subscribers for the preferred stock of said corporation, in the proportion of one share of common to every two shares of preferred.
    The suit was filed by the trustee in bankruptcy by authority given by the referee in bankruptcy. The petition did not set forth the particular creditors of the-bankrupt or their respective claims, but alleged that the liabilities of the bankrupt corporation were in excess of $115,000, and that it had no assets except its-unpaid stock subscriptions; and prayed an accounting' between the bankrupt and the several defendant stockholders, and for judgment against each of the defendants, and execution thereunder for enough to pay the-debts of the bankrupt.
    The defendants answered separately. The answer of defendant J. B. Johnson admitted the authority of the plaintiff to sne, and denied the other allegations. The other defendants set np payment by them of the common stock which- they had received, and prayed certain set-off's for the amounts of certain claims held by them against the bankrupt. The case was referred. On the hearing before the referee it appeared' that prior to the incorporation of the bankrupt company (Kline-Drummond Mercantile Company), a corporation known as the “American Supply Company” was engaged in conducting a mail order business through sales made by its agents; that the stockholders of this corporation desired to form another which should conduct a similar business on a larger scale by direct correspondence with purchasers and which would employ no agents. To carry out this purpose the Kline-Drummond Mercantile Company was incorporated with a capital stock of $400,000 —$160,000 preferred and $240,000 common stock— each share to be of the par value of $100, and the certificate therefor to recite it to be full paid and non-assessable. It was agreed by the corporation that any subscriber or purchaser who should take and "pay the par value of any of its preferred stock should also receive as a bonus and without any further payment one-half as much of its common stock. These proposals were recited in the prospectus issued before the formation of the corporation and exhibits by its chief promoter, one John W. Baker. After the issuance of its preferred and common stock on this plan there remained in the hands of the new corporation 1600 shares of its common stock which were disposed of by transfer to the former corporation (the American •Supply Company) in exchange for its mailing list of customers. The American Supply Company after effecting this exchange donated 350 shares of the common stock thus acquired by it to the said John W. Baker for his services in promoting the new corporation, and divided the residue, to-wit, 1250 shares, as a stock dividend among its own shareholders. The. defendant J. B. Johnson received sixty-one of snch shares. A circular letter explaining this transaction was mailed to each stockholder of the American Supply Company.
    The new corporation having thus disposed of its preferred and common stock, entered upon its business venture and soon thereafter became considerably indebted; and about July, 1904, issued bonds for $40,000. These were purchased by its own directors. It became- also indebted in large sums to two banks and a trust company, evidenced by notes indorsed by its directors. At the time of the issuance of the bonds of the Kline-Drummond Mercantile Company, defendant J. B. Johnson, who held its preferred stock of the par value of $10,000 and the bonus given therewith and who had also received sixty-one shares of its common stock in virtue of his holdings in the American Supply -Company, effected an exchange of the preferred and common stock so held by him for bonds of the Kline-Drummond Mercantile Company of the par value of his preferred stock.. This transaction was had through his attorney under instructions otherwise to ejoin the bond issue and apply for a receivership.
    In 1905 the board of directors sold the tangible assets of the corporation and applied their proceeds to the payment of its indebtedness. This left an outstanding indebtedness against said corporation, evidenced by its notes, amounting to about $78,000. This outstanding indebtedness was settled by the agreement of John W. Baker, the promoter of the corporation, to take care of $10,000 thereof and by the contribution of $68,000 in cash made by certain directors and shareholders of the company through a Mr. Held, appointed to act for them and in whose hands they placed this sum for the purpose of paying the remainder of the notes, and upon an agreement that they should be credited by tbe corporation for full payment of any 'liability against them, respectively, as the holders of its unpaid common stock, and that the corporation should become indebted to them in the amount of the excess of their advancement over and above such credit. The corporation was further indebted in current accounts in sums aggregating about $2700.35; and was adjudged a bankrupt. After this was done the notes of the corporation acquired by the agent of the contributing payors were credited by the amounts severally due by them on the unpaid common stock which they held. The credit thus given amounted to $33,750 and left a balance of $34,250 due from the bankrupt corporation to. the agent of said directors. This balance was one of the claims exhibited in the bankrupt proceeding on behalf of said directors. There were also exhibited in that proceeding the claims of all the bond holders (including the claim of defendant J. B. Johnson for $11,902.50), aggregating $41,522.50.
    The referee in the State court disallowed all these claims which had been filed in the bankrupt proceeding except the following:
    St. Louis Steel Range Co.........$ 2,500.00
    W. B. Gaston & Sons............ 12.00
    H. M. Buck ..................... 62.55
    James PI. Christopher ........... 125.80
    J. B. Johnson................... 11,902.50
    $14,602.85
    With reference to the item in the above statement of $11,902.50 claimed by J. B. Johnson, the referee held that no assessment for its payment could be made against any of the persons who received the common stock of the bankrupt through the medium of the American Supply Company. The referee held that defendant Johnson was debarred from calling upon the holders of this particular stock for payment, for the reason that he had taken some of the same kind ($10,000) himself with full knowledge that it was unpaid and not to be paid beyond ten per cent of its face value. The referee, however, held that the evidence did not show that defendant J. B. Johnson knew that the bonus stock given to subscribers or purchasers of the preferred stock of the Kline-Drummond Mercantile Company was not to be paid for, although he did know that the portion of such common stock received by himself as a bonus for the $10,000 par value of preferred stock acquired by him was not to be paid for; nor did the other testimony charge him with such knowledge, i. e., that the bonus common stock so given to other purchasers was not to be paid.
    The report of the referee as to the Johnson claim and as to certain other matters was set aside by the judge of the circuit court, who gave final judgment disallowing the claim of defendant J. JB. Johnson in toto.

    The defendants, including J. B. Johnson, filed separate motions for h new trial, which were overruled. None of the defendants took any appeal from the decree of the circuit court. The trustee in bankruptcy, in August, 1909, took an appeal, seemingly without any direction so to do by the referee in bankruptcy, and only after a contract with the attorney of defendant Johnson whereby the expenses of the appeal should be paid in advance by said Johnson. The other defendants have expressed themselves in oral argument as satisfied with the judgment below, and have filed motion to dismiss this appeal, alleging, among other grounds, that it was taken by the trustee in behalf of J. B. Johnson and not to secure the payment of any just demands against the bankrupt, all of which they aver could be satisfied out of the avails of the judgment below. In support of this motion they have filed certified copies of two reports of his proceedings in the matter under review made by the trustee to the referee in bankruptcy. Thse reports are,' in part, to-wit:

      The undersigned further represents that by the holding of the circuit court in said cause, the plaintiff, trustee in bankruptcky, of the Kline-Drummond Mercantile Company, is allowed to recover against the defendant stockholders for the payment of the- following debts proved and allowed in bankruptcy, to-wit:
    St. Louis Steel Range Company ..................$2,500.00
    "W. B. Gaston & Co............................. 12.00
    W. A. Buck .................................... 52.65
    and James H. Christopher.............•........... 125.80
    . Under this judgment the undersigned respectfully represents that he will be able to recover the amounts of the afore-mentionedclaims in full, together with all costs of the administration of the bankrupt estate, including the referee’s fees, attorneys’ fees-, fees of attorneys for bankruptcy, attorneys for petitioning creditors, and attorneys for trustee, and all costs of whatever kind or nature whatsoever. . . .
    Respectfully submitted,
    (signed) Davis Biggs, Trustee.
    That outside of the above balance, the estate has no asset other than the suit filed in the circuit court against the stockholders of the bankrupt company to collect their unpaid subscriptions to the capital stock. That final judgment has been entered-in said cause, as heretofore reported, and an appeal has been taken to the' Supreme Court of Missouri by the undersigned trustee at the request of J. Brooks Johnson, whose claim against the estate has been allowed in sum of $11,000; that the appeal was taken under an agreement between the undersigned trustee and the counsel for J. Brooks Johnson; that all costs of the appeal be paid in advance by Mr. Johnson. The undersigned trustee is advised that this case will not be set for hearing in the Supreme Court for- some time.
    Respectfully submitted,
    Davis Biggs, Trustee.
    Bland & Cave,
    Attorneys for Trustee.
    The essential part of the decree in the circuit court from which the present appeal is prosecuted was the finding that none of the bondholders of the corporation could enforce such indebtedness against the holders of its common stock, and that no other creditors could do so except those mentioned in the above report for the respective debts therein stated. It was not claimed either in briefs or in oral argument that said judgment of the circuit court would not suffice to fully pay the total amount of the debts due said creditors and the expenses of the proceeding in the bankrupt court and the suit in the State court. Hence the practical question on this appeal is, whether or not the claim of defendant J. B. Johnson shall be established against the bankrupt estate.
   OPINION.

I.

BOND, J.

(after stating the facts as above).— The trustee in bankruptcy is in law the representative of the creditors of the estate only in the sense that it is his duty to collect for their benefit and for <jue administration in the bankrupt e(rar£ ap -¿he assets of the estate. But it is not his duty to represent any creditor in the matter of prosecuting his claim against the bankrupt in any court. The position of the creditors as to each other in all cases where the estate is insufficient to pay its entire indebtedness, is one of antagonism; and the prosecution of their respective claims to an allowance in the bankruptcy proceeding, or a judgment in other courts, is a matter which concerns only the holders of such claims and forms no part of the legitimate duties of a trustee appointed to collect and conserve the estate ‘of the bankrupt in order that it may be applied to the payment, as far as possible, of all the debts and demands established against it.

In the matter in hand, defendant J. B. Johnson appears to be the only claimant who felt aggrieved by the judgment of the circuit court. He could have appealed therefrom in his own right; and failing so to do, it was not the duty of the trustee to take that step in his behalf. Neither was it the duty of the trustee to appeal in his own right as a representative of the estate of the bankrupt, if, as is shown by his reports to the bankrupt court, the judgment of the circuit court was available to pay all the demands adjudged against the bankrupt. We think the appeal under the facts .shown in this record was ill advised and necessarily tended to postpone the collection of enough assets to pay the liabilities adjudged against the estate in the hands of the trusteed We do not ascribe to the trustee any improper motive in the matter or intentional wrongdoing, but we do hold that he misapprehended the scope of his duties, and that the legal services of his attorneys in this court directed to the establishment of the claim of defendant J. B. Johnson are not justly chargeable to the estate and should not be compensated out of its assets. ,

We have decided, however, to reserve a ruling on •the motion to dismiss the present appeal on the ground that it is not prosecuted in the name of the “real party in interest” (R. S. 1909, sec. 1729 et seq.) and have concluded, after an examination of the entire record, to dispose of the question of the enforceability of the claim of the defendant J. B. Johnson on its merits.

II. The testimony in the record shows that the name of J. Brooks Johnson was on the list of subscribers for the preferred and common stock of the Kline-Drummond Mercantile Company; and though said to have been written by the promoter, J. W. Baker, the fact remains that the stock set out opposite his name was received by him and that h'e paid the par value of the preferred portion to the corporation direct, and received without further payment the same proportion of common stock allotted to other subscribers. The indorsement on the back of the certificates is admittedly' in his own hand writing. Upon this evidence and that of other witnesses touching his knowledge of the plan of stock issuance, we find the fact to be that he knew that the. corporation was issuing its common stock to the subscribers and purchasers of its preferred stock, with the understanding that nothing whatever should be paid by the recipients of such stock. These conclusions as to the evidence were reached hy the trial judge, and they are abundantly sustained by the weight of the credible testimony contained in this record. •

We further find as a fact that the defendant J. B. Johnson had full cognizance of the foregoing facts at the time he exchanged his preferred and common stock for the bonds of the company, upon which he subsequently sought to establish an indebtedness against it in the bankrupt court. And that he became a creditor of the corporation with full knowledge at the time that it had issued its common stock npon an agreement that it was not to he paid for hy persons receiving it; and, hence, that he did not extend any credit to the corporation upon faith in its ability to demand payment for its common stock. The law is well settled in this State that no creditor of a corporation, who becomes such with knowledge that its stock, though purporting to have been paid in full, was in point of fact neither paid nor to he paid, hut was issued merely as a bonus for the subscription and payment for other stock, can enforce his claim against the corporation hy compelling its shareholders to pay to the corporation, its trustee or other representative, any portion of the stock so donated. [Meyer v. Mining & Milling Co., 192 Mo. 162; Trust Co. v. McMillan, 188 Mo. l. c. 567; Shields v. Hobart, 172 Mo. 491; Berry v. Rood, 168 Mo. 316; Woolfolk v. January, 131 Mo. l. c. 637.]

In the light of this legal principle and according to the preponderance of the testimony in the record showing that defendant Johnson could not have been ignorant of. what every other stockholder knew when he acquired his stock in said corporation, the judgment of the trial court excluding the enforceability of the bonds held hy him just as it debarred all the other holders of such bonds was manifestly right; and it is affirmed.

Woodson, P. J., Lamm and Graves, JJ., concur.


text:
    CITY OF ST. LOUIS v. IRA C. YOUNG, Appellant.
    Division One,
    February 28, 1913.
    1. ORDINANCE: Judicial Notice. Courts, either appellate or trial, do not take judicial notice of city ordinances. An appellant should abstract the provisions of the ordinances which he was convicted of violating and whose validity he challenges on appeal.
    2. ABSTRACT:' Commingling Record and Exceptions. An abstract which commingles in an undistinguishable mass matter of exception with record proper is insufficient, and the judgment will be affirmed. And the point may be raised by the court sua sponte, although respondent fails to raise it.
    Appeal from St. Louis Court of Criminal Correction.— Eon. Benjamin J. Klene, Judge.
    Affirmed.

      Zachritz S Zachritz for appellant.
    . William E. Baird and Robert BurJcham for respondent.
   LAMM, J.

Defendant (claiming the ordinance was invalid on many grounds) was convicted in the police court of St. Louis for violating certain sections of ordinance 22998 of that city, regulating hospitals, lying-in establishments, lock-hospitals, etc. [Woerner’s Revised Code of St. Louis 1907, p. 1142.] He appealed to the Court of Criminal Correction, where, again convicted, he was fined $100 and costs. Appealing to this court, and raising a group of grave and interesting questions, he, preparatory to a hearing, filed a printed abstract of the record, as in duty bound to do under our rules. His abstract shows that plaintiff city put in evidence the ordinance on which the prosecution is based, but is silent on every jot and tittle of its terms and provisions. Why? Do appellate courts take judicial notice of town ordinances? They do not (Cox v. St. Louis, 11 Mo. *431), neither do trial courts (St. Louis v. Henning, 235 Mo. l. c. 52.).

We are told that Sir John Falstaff in a blazing encounter of wit with Prince Henry speaks of “old father antic the law.” [King Henry IV, Pt. I, Act I, Sc. 2.] Whether the alleged reporter of his alleged waggery and wisdom (who had indeed ‘ ‘ a mighty trick of saying things”) got his .cue anent father antic from the fact that every man is presumed to know the law (except, possibly, the judge who expounds it), and from the other fact that every inhabitant of a town is presumed to know its ordinances (Boonville ex rel. v. Stephens, 238 Mo. l. c. 357) except the judge who tries an offender for breaching them, will never be known — but the possibility is attractive even to a sober judicial mind. “Whatever of incongruity” (says Brown, C., in St. Louis v. Henning, 235 Mo. l. c. 51-2) “there may be in a rule which creates a conclusive presumption that the wandering vagrant who sojourns for a day in St. Louis knows more of its local laws than the court which, by its. judgment, affords him rest and refreshment in the city prison, has become unimportant in view of a uniform line of decisions of this court.”

Accordingly appellant should have abstracted those provisions of the ordinance he challenges. Respondent prints an additional abstract silent on the ordinance. In respondent’s statement of the case, however, the ordinance is printed in full, and if there was nothing else the matter with appellant’s abstract we might piece it out (ex gratia) with the ordinance respondent has brought here as part of its statement.

But there is something else the matter. The abstract is constructed on a plan steadily condemned by this court as so inherently bad as to be fatally defective, viz., it commingles in an undistinguishable mass matter of exception with record proper and matter contained in record entries, without any earmark to guide us in telling where one beains or the other leaves off. In that fix we cannot know what is in the bill of exceptions. The rnle is that since matters of exception must be in the bill of exceptions, the abstract of the bill should show that matters of exception are in the bill. There is only one reference in the abstract to a bill of exceptions and • that (at its very close) relates to the filing of one within the leave granted. New rule 31 does not help_ appellant.

The judgment below being presumptively correct and finding it responsive to the pleadings, it is affirmed under the authority of many eases. We cite some as samples. From these discern all: Reno v. Fitz Jarrell, 163 Mo. l. c. 413; State v. Baty, 166 Mo. 561; Clay v. Publishing Company, 200 Mo. l. c. 672-3; Stark v. Zehnder, 204 Mo. l. c. 448-9; Gilchrist v. Bryant, 213 Mo. l. c. 443; Harding v. Bedoll, 202 Mo. 625; Kolokas v. Railroad, 223 Mo. 455; Wallace v. Libby, 231 Mo. 341; Keaton v. Weber, 233 Mo. l. c. 694.

While the point is not raised by counsel yet that is immaterial. This court may raise it sua sponte. [Hutson v. Allen, 236 Mo. 645.]

Let the judgment be affirmed. It is so ordered.

, All concur.