139 Iowa 72 | Iowa | 1908
In February or March, 1903, the defendant associated with himself a few other persons in promoting the organization of a wholesale drug company to carry on business in Des Moines, which, as subsequently legally organized, became the plaintiff company. On August 26th following there was a meeting of the board of directors, of the plaintiff company, then duly organized, at which defendant, as president, and directors Brown, Wilcoxen, and Steelsmith were present. At this meeting there were some resignations of officers and directors, and the vacancies thus created were filled, so that from this date until March 13, 1905, the persons above-named and Connell and Bawson constituted the board, the officers of the board being the defendant, president and treasurer, Bawson, vice-president and Connell, secretary. The defendant had been for many years engaged in the retail drug business in Des Moines, and, at the date, of the meeting of directors above referred to, owned and was conducting a retail drug store. On August 27, 1903, at an adjourned meeting of the board of directors at which all the officers and directors were present, a resolution was passed and duly recorded, reciting that, as the affairs of the company required the immediate personal attention of at least one person at that time, and the, conditions were such that no one but the president of the company was available for this purpose, and the defendant, as president of the company, was willing to assume immediate personal charge of its business provided he could dispose of or make some personal arrangement in regard to his retail business, he was employed as manager, to act in such capacity from and after the 10th day of September, 1903, until the
The plaintiff seeks in this action to have canceled defendant’s stock in the company to the extent of $7,367.62 as unpaid for, the contention being that the sale of defendant’s retail business, including the stock and fixtures, to the plaintiff company had never been consummated. The lower court found that, although defendant had turned over to the plaintiff company in payment of his stock, in addition to the $6,000 paid in cash, the further sum of about $3,000 as the proceeds of the sale by him of his stock of fixtures, and had delivered to plaintiff unsold portions of said stock, the value of the stock so turned over fell short by $3,000 in value of the balance of his subscription, and ordered the cancellation of $3,000 in value of the stock in plaintiff company held by him. On defendant’s appeal it is contended that defendant’s stock was fully paid for, and that the court erred in canceling any portion thereof; while on plaintiff’s appeal it is contended that the court should have canceled $9,000 of value of the stock held by defendant, upon the return by plaintiff to defendant of the proceeds of defendant’s retail stock, so far as the same should be found to have been received by plaintiff, and such portions of such retail stock as still remained in plaintiff’s custody or possession. It is apparent that the controversy between the parties relates to the fact as to whether defendant’s retail business, including the stock and fixtures, was sold to the plaintiff for $9,000, and whether,
The cases relied upon by the trial judge in reaching his conclusion, and now insisted upon for appellee as supporting such conclusion, are not in point. In Hallam v. Indianola Hotel Co., 56 Iowa, 178, it was held that a director owed to the corporation the duty of dealing in good faith with reference to the corporate property in the enforcement of a claim by him as creditor against the corporation, and for his bad faith in buying the corporate property at much less
The trial court erred in decreeing a cancellation of any portion of the stock of defendant, and on defendant’s-appeal the decree is reversed. It follows that there was no error of which the plaintiff can complain. The result is that the decree is affirmed on plaintiff’s appeal, and on defendant’s appeal it is reversed.