82 Fla. 237 | Fla. | 1921
This is an appeal from an order overruling demurrers to a bill of complaint in which the complainant, Pauline P. Arnold, in her own right and as executrix of the “estate” of Thomas Iverson Arnold, deceased, sought the recission of the sale and transfer of 205 shares of the capital stock of the Arlo Box Company to Frank H. Logan and a cancellation of a certificate of five shares of the capital stock of the said corporation held by Logan and the cancellation of 150 shares of the capital stock of the corporation held by Logan and evidenced by certificates numbered from 14 to 23, both inclusive, and the cancellation of certain other certificates of stock in the corporation held by the said Logan and Kate B. Howell and the cancellation and annulment of a certain transaction between the said Logan and Kate B. Howell whereby the latter delivered to the former a certain promissory note executed by the complainant’s testator for the sum of $6,750 in the purchase from her of 65 shares of the capital stock of the said corporation and for the re-issuing to the complainant of the shares of stock in the corporation which had been sold by her to the said Logan, and for an injunction restraining Logan from selling or transferring any of the shares of stock acquired by him from the complainant and enjoining the corporation from selling its mill, tramways, locomotives, rolling stock and its timber lands and for general relief.
The bill is a very lengthy document comprising 26 pages of type written matter and 5 pages of exhibits.
The demurrer of the Arlo Box Company attacks the bill upon several grounds, among which are that the bill is without equity as against the corporation; that it is not a proper party to the suit and that it appears from the allegations of the bill that the defendant is not interested in the controversy between complainant and Frank Logan upon which the litigation rests.
The demurrer of Kate Howell consists of 5 grounds among which are that she is not a proper party to the suit and the bill is without equity as against her and that the complainant has no right to compel a recission of the contract made between her and Frank Logan.
The Chancellor in the court below overruled the demurrers in a very clear and forceful opinion which was reduced to writing and incorporated in the record. As to the demurrer interposed by Frank Logan, the Chancellor held that the allegations of the bill show that while.no fiduciary relation existed between the complainant and the defendant Logan, yet the circumstances surrounding the transaction were of such character that the complainant was impelled, induced or persuaded to part with her stock at the price and upon the terms alleged in the bill and that the circumstances were of such character as either to necessarily imply the relation of, trust and confidence between the complainant and the defendant Logan or showed that the complainant expressly reposed trust and confidence in the defendant at his expressed or implied solicitation and which he violated to his own material profit.
As to the demurrer of Kate Howell the.Chancellor held that 'she was -a proper ;if not necessary party because the
As to the demurrer of the Arlo Box Company the Chancellor held that it was a proper party in as much as the relief sought involved the issuing by it of new certificates of stock and the cancellation of old ones.
It is unnecessary in this opinion to set out the bill of complaint in full or to quote from it at any considerable length, but we will undertake to state in substance the salient features of the transaction as disclosed by the bill which being admitted by the demurrer constitutes the grounds for equitable relief. In the first place we fully concur in the views expressed by the learned Chancellor in the opinion filed by him when he entered the order overruling the demurrers and although we do not expect to be able to present the case in a better light than that in which the Chancellor stated it, we may be able to add something of substance to the strength of his views. From the allegations of the bill the following were the circumstances out of which grew the transaction of which the complainant complained. The complainant is the widow of Thomas Iverson Arnold, who died on the 26th of January, 1920, leaving a will appointing the complainant his executrix and naming her as sole legatee of his estate. . Prior to his death Arnold for many years had been the president and chief executive officer of the Arlo Box Company, a corporation in which he held a majority of the stock. One share of the stock being held by Charles R. Murphy and the
That the corporation had for 20 years conducted a successful and profitable business and that during the last years next prior to Arnold’s death was rapidly increasing in volume. That the complainant had no knowledge of the extent of the business or its assets, was wholly inexperienced in business matters and that by reason of the fact that the business relations existing between her husband and the defendant Logan for two years or more prior to her husband’s death were of a close and confidential character in which her husband relied with great confidence upon the ability of the defendant and his integrity, she, upon her husband’s death relied upon the integrity, fidelity, character, good faith and ability of the said defendant in all matters pertaining to her holdings in the Arlo Box Company represented by the shares of stock owned' by her husband at his death to which she succeeded. under the terms of his will. That upon the death of Arnold the de
That the defendant Logan within ten days after the death of complainant’s testator began negotiations with the complainant for the purchase of her husband !s stock in the corporation of which they were both stockholders and practically the owners and that in these negotiations the defendant imposed upon the complainant’s ignorance as to the number and value of the shares of capital stock owned by her and as to the volume and profit of the corporations business by representing the business to be less, profitable than it was and the assets of the corporation less valuable than they were. There are allegations in the bill of subsequent efforts on the part of the complainant to obtain information from the defendant that would be discovered by an examination of the books and accounts of the corporation in the defendant’s possession which are evidentiary of bad faith and a purpose to deceive on the part of the defendant. , •
We think that the complainant and the defendant-in the trade whereby the latter acquired the former’s holdings in the corporation were not dealing at arms length as strang
Under the over burden of many words the relations between the complainant and the defendant appear as we have undertaken to state them and those relations required the exercise of good faith on the part of the defendant in all his dealings with the complainant as to the acquiring of her stock by him in the corporation of which he was the only officer and sole manager and director. The order of the Chancellor in overruling the demurrers was correct and the same is hereby affirmed.
