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(222 S.W.) to $25,000, in which was included good will that the good will of a company can only be at a valuation of $14,143. However, in the estimated by the results of its business operagreement by which these assets were turned ations from the time it commences until it over to the new company it was further pro ceases to do business; and, where the consolvided that the new company should pay the idated company, as here, was controlled and debts of the Geo. Henseler Oil Company, managed by the same people as those who amounting to $7,606.75. Some of these ac- managed and controlled the constituent comcounts receivable · were worthless. When panies, good will may also be shown by the these accounts and the amount of liabilities results of the business operations of the conassumed by the new company of the Geo. solidated company. The books of these comHenseler Oil Company were deducted from panies showed that the Geo. Henseler Oil the real assets, it left net assets actually Company started out with a paid-up capital turned over to the new company by the Geo. stock of $10,000, and that after five years' Henseler Oil Company, good will, of course, operation it wound up with assets of only excluded, of only $2,219.56.

$2,219.56. The Mercantile Oil & Supply ComThe assets of the Mercantile Oil & Supply pany commenced business with a paid-up Company, also transferred to the new com- capital of $30,000, of which $15,000 was prepany, were entered on the books of the Hen- ferred and $15,000 was common stock. The seler Mercantile Oil & Supply Company at common stock paid no dividends, but during $25,000, and include good will, $16,290, and the five years of operation the preferred other assets, $8,710, but included in these stock paid a dividend of 8 per cent. At the assets are a number of accounts worthless at close of these five years of business the net the time, and subsequently charged to good assets of this company amounted to only $4,will so as to increase the amount of good 792.55. Inasmuch as during that period the will on the books. Deducting these bad ac- company paid out to its stockholders $5,200 counts from the real assets left net real as- in dividends, it is proper, in order to arrive sets of $5,592.55. From this is to be deduct at the total loss, to add this to the assets ed a dividend paid to the stockholders of the above stated, making $9,992.55. Deducting Mercantile Oil & Supply Company by the this from the $30,000 assets with which the new company, under an agreement to that ef- company started, leaves a balance of $20,fect, amounting to $800, making real net as-008, which represents the net loss of the sets received by the new company from the company in five years of operation. The two Mercantile Oil & Supply Company of only companies, therefore, during their business $4,792.55. We have therefore, in the first in- lives show an operating loss in the one case stance, capital stock to the extent of $30,433, of 77 per cent. and in the other case 66 per represented by alleged good will of the two cent. of their respective capitalizations. Unconstituent companies, afterwards, to the ex- der this state of facts the companies can tent of $34,268.73, being the aggregate debts hardly be said to have had a good will which of the Geo. Henseler Oil Company, the divi- can be represented by dollars and cents when dend paid to stockholders of the Mercantile the continued business was managed by the Oil & Supply Company, worthless accounts same persons as when operated at the loss receivable of the Mercantile Oil & Supply stated. It was further shown that the conCompany, and the remainder, $7,012.11, which solidated business with the added good will represents tangible assets of approximately of the former companies, when operated by that value.

the same persons who had owned and oper[6] Conceding, therefore, that the capital ated said former companies, resulted in no stock of the corporation may be represented profit, but, on the contrary, suffered a net by good will of constituent companies where loss in its five years of business. no money passes, and that all the stockhold- We have defined good will to be “the aders of the constituent companies become vantage or benefit

acquired by an stockholders of the new company, did these establishment beyond the mere value of the constituent companies have any real good capital stock, funds, or property employed will? There was no competent proof offered therein, in consequence of the general public of the value of the good will of either of patronage,” etc. Milling Co. v. Hanebrink, these companies. One witness, it is true, 247 Mo. loc. cit. 221, 152 S. W. 357, Ann. Cas. testified that he thought the good will of the 1914B, 875. If in consequence of the general Mercantile Oil & Supply Company was worth public patronage such declared advantage or $15,000, because that company had always benefit turns out to be a disadvantage and a paid a dividend, and had also paid its debts. loss, then the good will becomes nothing more In this statement he evidently ignored the than a purely imaginary quantity. Parafact that these dividends had been paid out phrasing a Pauline mysticism, it is neither of the capital stock, as is sometimes done in “the substance of things hoped for nor the mushroom organizations, to which class none evidence of things not seen.” Heb. 11:1. of these companies, it is but fair to say, be- V. During the five years of business, allonged. The position of the receiver was though this company possessed wagons,

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horses, tools, oil stations, etc., yet it charged | 2. Adverse possession ww 64-Possession under nothing off for loss, depreciation, or waste, parol gift is adverse. except $90 for the loss of a horse. Every- Possession under a parol gift is adverse, thing else it owned or possessed was carried not permissive. during the five years of business at original 3. Adverse possession 0106(4)-Ten years cost. The loss which, according to its books, gives title. was due to operation, is much less than the

One who holds open, notorious, continued, actual loss. An expert accountant found uninterrupted, adverse, and actual possession that there was an actual deficit or difference of realty for 10 years or more acquires legal between assets and liabilities of $13,302.68. title as fully as if he held deed from the As we have shown, the company commenced

owner. business with real assets of about $7,000. 4. Adverse possession om55_Death of owner Five years later, when the books were ex- does not interrupt adverse possession. amined, not only had the capital stock been If defendant had adverse possession of dissipated, but the company owed $13,000 realty owned by plaintiff's predecessor prior more than it had assets. Therefore there to such predecessor's death, and after the was a total loss during this period of $20,- death continued in such possession and held it 314.79. While this was but the estimate of for the 10 years last before commencement an experienced accountant, the events proved title, as the death did not stop the running of

of plaintiff's ejectment suit, defendant acquired it to be fairly accurate, and tallied with that the statute. made by the receiver two years afterwards.

[7] VI. The sale of their unpaid stock by 5. Adverse possession co 116(5)—Instruction certain of the appellants before the institu

held not erroneous, as authorizing finding ti

tle passed by gift. tion of this suit will not relieve them from

In ejectment by devisees against defendant, liability to the creditors of the company for their respective balances due on such stock. struction that if testator gave the property to

a negro, claiming by adverse possession, inEyerman v. Krieckhaus, 7 Mo. App. loc. cit. defendant absolutely, and defendant, before 457; Epstein v. Clothing Co., 67 Mo. App. loc. testator's death, took possession pursuant to cit. 226.

the gift, and such possession was adverse and We have thus reviewed the facts to enable continued for 10 years last before commenceit to be determined whether there was a pay

ment of suit, defendant acquired title, was ment in any manner by these appellants of not erroneous, as authorizing the jury to find the amounts they respectively obligated that title passed to defendant by the gift. themselves to pay upon their subscription for 6. Trial Cwm 260(1)-Instruction need not be and the issuance to them of the shares of repeated on request. their stock. We do not find that the stock An instruction, fully and completely cov was paid for either “in money, meal, or ered by another given at the party's request, malt;" and, if good will be held to be prop

was properly refused. erty, however its existence may be ascertain-| 7. Trial 243—Instructions presenting coned, it constitutes no factor in the determina- flicting theories of proof not in conflict. tion of the matter at issue because it did not Two lines of instructions, following con. exist; if it did exist its value was negligible.flicting proof, and presenting fully the two

Under no view of the facts in this case theories of the case, are not in conflict. have appellants interposed a meritorious defense, and the judgment of the trial court is

Appeal from Circuit Court, St. Charles therefore affirmed.

County; Edgar B. Woolfolk, Judge. All concur.

Action in ejectment by John W. Coshow and others against Orlaney Otey. From a judgment for defendant, plaintiffs appeal.

Aflirined. COSHOW et al. v. OTEY. (No, 20942.)

C. W. & J. W. Wilson, of St. Charles, for (Supreme Court of Missouri, Division No. 1. appellants. June 2, 1920.)

Theodore C. Bruere, of St. Charles, for re

spondent. 1. Evidence C 278–Admissions of decedent as to gift admissible to characterize defend

GRAVES, J. Action in ejectment for two ant's possession.

small tracts of land (aggregating less than In ejectment by devisees against defendant, 45 acres) in St. Charles county. The peti. a negro, claiming to have been given the land tion is in usual form, alleging ouster of plainby testator, and to have acquired title by ad- tiffs by defendant on March 2, 1916, and alverse possession, testimony as to testator's declarations or admissions that the land was

leging rents and profits to be $10 per month, defendant's, and that he (testator) had given and damages at $50. The answer upon it to him, held admissible as characterizing which the trial was had was a third amended defendant's possession,

answer, and consisted of the following de (222 S.W.) fenses: (1) An admission of possession and maintenance of said cemetery as is directed in a denial of all other matters of the petition; my said will, except that they shall not be (2) plea of the 10-year statute of limitation; required to organize as a cemetery association (3) plea of the 24-year statute of limitation; under the laws of the state of Missouri. And

I direct that my executor shall, as soon as (1) title in defendant by open, notorious, con

convenient after my decease, pay to said trustinuous, and adverse possession for a period tees, Wm. M. Stewart, Mike Sutton and John of 10 years. Whilst there are some reitera- Burton, for their services as said trustees, fifty tions, the foregoing cover the defenses made. dollars each, and to John W. Coshow five hunReply was a general denial. Upon a trial be- dred dollars for his services as such trustee.” fore a jury the defendant had a verdict in his favor, and from the judgment entered The paper title to the land in dispute was upon such verdict the plaintiff's have ap- in Alonzo B. Howell at the date of his death pealed.

in January, 1902, and his estate was finally No formal assignments of error are made settled in May, 1904. The instant suit was in the brief for appellants but under their brought May 4, 1916. There is no dispute as heading of “Points and Authorities” it is to the fact that the property described in the said that the court committed "reversible er- petition is in the possession of the defendant. ror" in the following particulars: (1) In ad- On the other hand the proof for the defendmitting the evidence to the effect that Alonzo ant tends to show that defendant had been in B. Howell under whose will plaintiffs claim the open, notorious, hostile, and adverse title stated in his lifetime that he had given possession of the land for much more than the property to defendant; (2) in giving in- 10 years. The defendant is a colored man, structions Nos. 1, 2, and 3 for defendant; (3) and the son of a former slave of the said in giving conflicting instructions; and (4) Alonzo Howell, and whilst living upon the in refusing instruction No. 8 as asked by land in dispute worked more or less for Mr. plaintiff's.

Howell. There is much substantial evidence The plaintiffs in this case are trustees un- showing that defendant has had the land der the will of Alonzo B. Howell, by the fenced for more than 25 years, and has lived terms of which he gave:

upon, cultivated, and improved it during that

time. He paid no rent during the lifetime of "All the rest, residue and remainder of my estate, both real, personal and mixed, I give, Howell

, and none since although there was devise and bequeath to Wm. M. Stewart, Mike a slight attempt to show payment of rent a Sutton, John W. Coshow, Isaac N. Howell, and time or two since the death of Howell; but John Burton, as trustees, and to their succes- there is not much substance to this portion sors in office and trust forever, for the pur- of the evidence. The evidence is ample to pose of organizing and incorporating themselves support the verdict of the jury and the judginto a cemetery association under the laws of ment of the court in the cause should be afthe state of Missouri, said trustees and their firmed, unless there is some substance in the successors to set apart such of my real estate as in their judgment may be necessary, in- assignments of error. These, and the perticluding the old family burial ground, where my nent facts pertaining thereto, we leave to the father and mother and many of their descend- opinion. ants and relatives are buried, for cemetery pur- [1] I. The plaintiffs in this case stand in poses. And said trustees and their succes- the shoes of Alonzo B. Ilowell. The evidence sors are hereby empowered to make such rules to which plaintiffs objected, and of which and regulations in reference to said cemetery complaint is now made, is in the nature of as in their wisdom and judgment may be just admissions by Howell that he had given the and proper. And I hereby give and grant to said trustees authority and power to use the land to Otey. There is no question that Otey net income, rents and profits arising from my went into possession and made valuable imsaid estate for the purpose of improving, dec- provements thereon in the lifetime of Howell. orating, adorning and enlarging said cemetery | A sample of the testimony now complained grounds. And for all services rendered by of will serve a good purpose here. Witness them, or any of them, in their capacity as such, Huning was on the stand for defendant, and they are to be paid out of said income, so that

said: no part of the principal of my estate shall be encroached upon at any time, unless the same Q. Now, Mr. Huning, I will ask you whethbe required for such improvements."

er you had any conversation with Mr. Howell

with reference to the property that was on the By a codicil this was later modified thus:

eastern side of this fence that ran along the

west boundary of this in controversy. “Now, I, the said Alonzo B. Howell, do make "Mr. Bruere: Mr. Wilson takes the position this codicil to my said will, and I do hereby as to adverse possession. It's clear that, if revoke said provision in reference to said the ancestor disclaims any right to this propcemetery association as a corporation under erty and makes the statement that the propthe laws of the state of Missouri and also erty does not belong to him, but belongs to as to Isaac N. Howell as one of the trustees, the other man, and disclaims any right of and I hereby appoint Wm. M. Stewart, John ownership, that it is admissible. W. Coshow, Mike Sutton and John Burton "The Court: If that is what you propose to as trustees for the care, improvement and sucb / show, the court will overrule the objection.

"Mr. Bruere: That is what I want to show there duly excepted, and saved their excepby this witness.

tions.) "Mr. Wilson: We except to the ruling of the "A. I went over there to work on Orlaney's court for the reasons indicated.

place one time. Orlaney couldn't go, and he "The Court: Proceed.

sent me to work in his place, and when I "Q. Just state what that conversation was. started away 'Marse Alonzo,' as we always A. My father was cutting board timber over addressed him, told me, he says, 'Now,' be there and only was to get the black oak. says, 'I have given Orlaney a home,' he says;

"Mr. Wilson: That's not giving the statement 'that's his, and I have nothing to do with it.'" or conversation with Mr. Howell. We object to it.

The foregoing is the character of the tes"The Court: Sustained. State what was timony to which the appellants lodge their said. "A. Of course, on the west side of Uncle acter was recognized as proper in the case of

assignment of error. Evidence of this charAlonzo's house, that was in the pasture, the Allen v. Mansfield, 108 Mo. loc. cit. 348, 350, black oak timber was without, and, of course, he had told him not to take anything but black 18 S. W. 901. That was an action in ejectoak, and

ment, as here, and among other defenses was "Mr. Wilson: We object to that.

that of adverse possession. Black, J., in dis"The Court: State what was said--what Mr. cussing the matter at page 348 of 108 Mo., Howell said. A. He asked Mr. Howell wheth- at page 902 of 18 S. W., supra, said: er he could get the black oak on the other side of the house

"It is to be observed in the first place that "Q. What do you mean by that? A. Over there is no evidence of improvements made across the fence.

by the alleged donee, or other circumstances "Q. That is where Otey was? A. Yes, sir; to take the alleged parol gift out of the stat. and he said not to take anything there;' that ute of frauds. As stated by counsel for the belonged to Otey and wasn't his, and not to defendant, it is title by adverse possession, go over there to cut any.

not by gift, which will defeat the plaintiff. “Q. Who said that? A. Mr. Howell."

Continuous adverse possession under a parol

gift for the statutory period will not only conAnd further the same witness said:

stitute a perfect defense, as against the donor

and those claiming under him, but it will con"Q. Now, you say, when you went to see

fer title upon the donee. Campbell v. Braden, Mr. Howell, to ask permission to cut board 96 Pa. St. 388; Moore v. Webb, 2 B. Mon. timber directly over across the fence, it was the fence as it existed at that time? A. There 239; Sumner v. Stevens, 6 Metc. (Mass.) 337;

(Ky.) 282; Outcalt v. Ludlow, 32 N. J. L. was a fence there at that time when I went Clark v. Gilbert, 39 Conn. 94.” there. "Q. And he told you not to go across the

In the Allen Case the judgment for the defence that was Otey's? A. Yes, sir.

"Q. And that occurred Otey was living there fendant was reversed and the cause remandon that place that time, was he? A. Yes, sir. ed, but not upon the point involved here. "Q. And that occurred how long ago; 25 or

And in that case at page 350 of 108 Mo., at 30 years ago? A. That was the last year I page 903 of 18 S. W., this court quotes apwas living there; that's about 27 or 28 years provingly from the Supreme Court of Conago."

necticut thus: Another witness said:

"As said in Clark v. Gilbert, supra: 'Much

has been said about an open, notorious pos. “The Court: Just state the conversation, session, but such expressions are not applicable whatever it was. A. Well, I was trading with

to a case like this. Possession taken under him on some corn there, and he made me a

a parol gift is adverse in the donee against price, and I told him that I couldn't haul that

the donor, and, if continued for 15 years, percorn at the price, unless he would take off fects the title of the donee as against the enough to pay me to haul it, and he said he

donor. The donor in such cases, not only couldn't well do that; and I said, 'Haven't knows that the possession is adverse, but inyou got anyone to haul it?' and he said, 'I tends it to be, and there is no occasion for any have no one but a nigger, and he is busy now, notoriety. Notoriety is only important where and I couldn't get him; and I said, What

the adverse character of the possession is to nigger? and he said 'Orlaney Otey, that lives be brought home to the owner by presumption. over here on a piece of land I gave him.' That Of course, where it is shown that he had actuwas the conversation."

al knowledge that the possession was under

claim of title, and therefore adverse, openness The foregoing has reference to a conversation with Mr. Howell at Ilowell's place.

and notoriety are unimportant, for no other

person has any legal interest in the question A brother of the defendant testified:

or right to be informed by notoriety or other"Q. Did you ever have a talk with Alonzo wise.' See, also, Sedg. & Wait on Trial of Howell with reference to this place--the own- Land Titles (2d Ed.) 735. On these grounds ership of this place? A. Yes, sir.

the Rannels Case can stand without question "Mr. Wilson: If the court please, we object or doubt, for there was, as against the donor, to this testimony for the reasons already in- sufficient actual possession of the whole tract, terposed.

and color of title was not necessary to a com. *The Court: Overruled. (To which ruling plete defense, and that case stands on no



(222 S.W.) So in the case at bar. For long years be. I for a period of 10 years next before the comfore Howell's death, defendant had the land mencement of this suit, and that such possession in question under fence and in his possession. was visible, notorious, continued, adverse, and Howell lived close by, and was advised of actual for that period, then the jury should what defendant was doing. He saw defendant

find for the defendant. (Given.) improve and use the property, and these ad- ; believe from the evidence that the defendant

Defendant's Instruction No. 3.-If the jury missions of the deceased characterized the had the exclusive, visible, notorious, continued, possession of defendant, and were proper. and actual adverse possession of the premises in

[2] II. To follow the question above dis- controversy prior to the death of Alonzo Howcussed a little further: The defendant had ell, and that the defendant, after the death of the right to show the character of his pos- Alonzo Howell, continued in such possession, session by the admissions of the donor, if and had and held the visible, exclusive, notothere was in fact a parol gift. These ad

rious, continued, and actual adverse possession missions were made in the very presence of 10 years next before the commencement of this

of the premises in controversy for a period of the defendant's possession. The evidence fixes suit, they will find for the defendant. (Given.)" the time of the possession as being more than 10 years prior to the death of the alleged do- [3, 4] Instructions 1 and 3, supra, are propnor, and for more than 10 years after his er declarations of law, where there is evi. death. In the case of Int. Bank of St. Louis dence tending to show continuous adverse v. Fife, 95 Mo. loc. cit. 126, 8 S. W. 244, it is possession for the statutory period. As we said:

have suggested there is such evidence: (1) "Where an absolute and unqualified donee in To show continuous adverse possession for fee takes possession of lands under a parol the statutory period prior to Howell's death; gift, his possession is thenceforth adverse to and (2) to show continuous adverse possesthe donor. Authorities are numerous to that sion for the statutory period after his death. effect, and among others the case of Ranpells v. Rannells, 52 Mo. 109, where it is said that The death of Howell did not stop the running the donee is to be regarded as holding adverse of the statute, and instruction No. 3 was inly to the donor 'from the very inception of her tended to make that matter clear. These are entry under the parol gift.'

stock instructions adverse possession.

The plaintiffs by their own instructions, Nos. So that in this case the admissions of de 1, 2, 5, 6, and 7, recognized that the question ceased were certainly' proper, under the of adverse possession was one for the jury, pleadings before us, to characterize the pos- by the use of such clauses as: session of the defendant, as suggested, supra. These admissions tended to show adverse

“Unless the defendant has acquired title by rather than permissive possession, because adverse possession of the said tract of land, as possession under a parol gift is adverse and explained in the instructions in this case, ' for

a period of 10 years next before the commencenot permissive.

ment of this suit." III. The three instructions given for the defendant, which are complained of in this The argument before this court was not in court read:

criticism of these two instructions, but was Defendant's Instruction No. 1.–The court directed to instruction No. 2, supra. There instructs the jury that one who holds the open, is a bit of testimony tending to show that notorious, continued, uninterrupted, adverse; the possession of the defendant was merely and actual possession of real estate for a period permissive, and that he held under the of 10 years or more acquires the legal title to grantor of plaintiffs. This should be borne the property as fully as if he had acquired the same by deed from the owner; therefore, if in mind in the discussion of this instruction. you believe from the evidence that the defend- / In fact, this permissive character of defendant has held the open, notorious, continuous, un- ants' possession was submitted to the jury by interrupted, adverse, and actual possession of plaintiff's instructions, and the fact found the premises described in the petition prior to against them. the death of Alonzo Howell, and that such pos

[5] The portion of this instruction 2, which session continued, and the defendant was in is complained of here, is that part which the visible, notorious, continued, actual, and ad- authorizes the jury to consider the fact as to verse possession of the premises described in the petition, for a period of more than 10 years land to defendant. As used in this instruction,

whether or not the deceased had given the preceding the institution of this action, you must find for the defendant.

this clause simply meant that the oral gift Defendant's Instruction No. 2.-If the jury would make the possession taken thereunder believe from the evidence that Alonzo Howell adverse, and not permissive. The whole ingave the property in question to the defendant struction, when read, so indicates. It is absolutely and unqualifiedly, and that the de- clear that the instruction did not authorize fendant, prior to the death of Alonzo Howell, the jury to find title in defendant by and took possession, pursuant to such gift, of the premises described in the petition, claiming ti- through the, but only authorized the tle according to such gift, and that such pos- jury to determine the matter of an oral gift, session was visible, notorious, continued, adverse as bearing upon the questions of adverse or and actual, and that such possession continued / permissive possession. The instruction was

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