153 N.E. 477 | Ind. | 1926
Appellee, who was a stockholder and director of the appellant corporation, brought an action against the corporation and three other stockholders, two of whom were also directors and constituted a majority of the board of directors, while the third was employed by the corporation as a mechanic and foreman of its mechanical department. The only other stockholder was appellee's (plaintiff's) daughter, to whom she had given four shares of her stock. The complaint demanded judgment against the corporation for $1,000, an accounting, and a judgment in favor of the corporation against the individual defendants for any amounts found due from them to it, and asked that a receiver be appointed pending suit. The substance of the complaint was that the capital stock of the appellant corporation consisted of 100 shares of the par value of $100 each: that the defendant, Henry C. Albrecht, and appellee's deceased husband, Charles Van Slyke, had each owned forty-six shares, and appellee and the wife of Albrecht had each owned four shares, and the four stockholders had been the directors of the company; that before the death of her husband, his stock was transferred to appellee and she transferred *271 four shares to her daughter: that after her husband's death, Henry C. Albrecht, as a director and secretary and treasurer of the corporation, agreed that appellee "should receive the same salary and dividends that she and her husband formerly had received: to wit, $50 per week salary, and dividends to be decided upon at the end of the year: that out of said $50 per week salary, said Gertrude Van Slyke was to employ and pay a mechanic to work in the shops, and, in further consideration therefor, she was to use her own car in handling the mail and doing errands." That appellee employed the other individual defendant, Roy Riley, a competent and experienced mechanic, to work for the corporation in its shop at $30 per week, and he was still so employed, and she was and ever had been able and willing to perform her part of the agreement: but that, a few days later, Henry C. Albrecht told appellee he would not perform that agreement, and it never was performed: that the three individual defendants, Albrecht and his wife and Riley, entered into a conspiracy that one share of Albrecht's stock should be transferred to Riley on the books of the corporation, although neither sold nor given to him, and he should be elected a member of the board of directors of the corporation: that to procure Riley's co-operation, the other directors increased his salary "to $35 per week and again to $50 per week, which last raise from $35 to $50 per week was wholly unnecessary"; that, at the annual meeting of the stockholders, Albrecht and his wife and Riley cast their fifty votes for themselves for directors, and appellee and her daughter cast their fifty votes for themselves and for Mr. and Mrs. Albrecht, and the defendants declared that the only two directors elected were Mr. and Mrs. Albrecht, and that appellee held over as a director until her successor should be elected; that appellee's daughter demanded *272 recognition as director by reason of having received fifty votes, and because Riley's vote was not legally cast, but was refused; that by reason of said facts, the defendants, Henry C. Albrecht, Mary C. Albrecht and Roy Riley, are in absolute possession and control of the defendant Little Wonder Light Company, and all its property. The complaint also contained many epithets, and allegations that these alleged acts were done with the intent to defraud appellee and her daughter. And, without stating any additional facts as the basis for such conclusions, the complaint also alleged the conclusions that the individual defendants "are so manipulating and managing the affairs of said company as to absorb the proceeds thereof; they are paying Roy Riley an exorbitant and unnecessary salary; they are fraudulently paying Henry C. Albrecht an exorbitant and unnecessary salary; they are fraudulently employing or pretending to employ unnecessary help for which they are pretending to pay out of the proceeds of the company; they are conspiring and intend to defraud this plaintiff out of her interest in the proceeds and profits of said company; they are conspiring and intend to reduce the value of plaintiff's stock in said corporation to nothing; and they are conspiring and intend to convert all the assets and property of said corporation to their own use"; that they "have unlawfully and fraudulently paid out of the funds of said corporation a large sum of money to attorneys defending them in their unlawful and fraudulent designs"; and that, under their management, "great and irreparable injury and damage has been and is being done to her and her property rights, and the same will continue unless prevented by an order and judgment of court." The articles of association and by-laws of the company were filed with the complaint as exhibits.
At the hearing on the application for a receiver, the *273
complaint was read in evidence, but, of course, it constituted evidence only of the facts therein alleged, and not of the 1. conclusions stated. Tucker v. Tucker (1924),
But, in addition to the verified statements in the complaint to the effect that Mr. Albrecht, acting as an officer of the company, after having agreed to pay appellee, following her 2. husband's death, the same salary that had been paid to him for his services when living, refused to pay her, appellee testified to those facts and there was evidence that appellee had worked at the office of the company a few days, and then was prevented from continuing to work there by Mr. Albrecht: that Riley had attempted to buy appellee's stock at $150 per share, on payments, with eight per cent. interest on the unpaid balance, but she had refused to sell: and that there had been a long drawn out dispute between appellee and her daughter, owning fifty shares, on one side, and Mr. and Mrs. Albrecht and Mr. Riley, owning fifty shares, on the other side, as to who should be in control of the company, who should constitute the board of directors, and what income appellee should receive from the company. Evidence *276 was also introduced that the defendant Riley had stated, when Albrecht was not present, that Mr. Albrecht "was planning to cheat and rob" appellee, and was making a pretense of giving Riley a share of stock, but that "it was only a pretense for the purpose of robbing, cheating and defrauding" appellee, and of many other things which appellee testified Riley had said about the purposes of Mr. Albrecht, and about what Mr. Albrecht had said and done. But Mr. Riley and Mr. Albrecht testified directly to the contrary. And obviously, the testimony of appellee as to what Mr. Riley said, and especially as to what he said Mr. Albrecht has said, and had intended, did not constitute competent evidence against the corporation, which is the sole appellant in the case at bar. Riley was only the owner of one share of stock and working as a mechanic in the employ of the company, and he was not acting in any business of the corporation when he made any of the statements as testified by appellee. So they must all be disregarded in determining whether or not there is evidence to sustain a judgment against the Little Wonder Light Company depriving it of all its property, and turning it over to a receiver.
The mere fact that Mrs. Van Slyke was not given such employment and paid such a salary by the company as she thought herself entitled to after the death of her husband, or that the 3. company did not pay her the salary which its secretary-treasurer had promised her, or that she and the Albrechts could not agree on who should be elected in her husband's place as the fourth director, or that there was dissension among the stockholders over the management of the business, or that she suspected the directors of a purpose to buy her stock for less than it was worth, affords no ground for appointing a receiver, where the corporation was solvent, the business was *277
profitably conducted, dividends were paid, a record was kept of all that was done in managing the business, and those in charge of it were financially responsible. Enterprise, etc., Pub. Co.
v. Craig (1924),
The judgment is reversed, with directions to set aside the appointment of the receiver.