447 S.W.2d 22 | Tenn. Ct. App. | 1966
Lead Opinion
On November 25, 1958, the Western Section of the Court of Appeals sitting' at Knoxville announced an opinion in the above styled cause which was published in 45 Tenn.App. 487, 325 S.W.2d 575. This opinion involved a very tedious and laborious study of a record of over 4,000 pages and involved the rights of Clint McDade, the father; Everest McDade and Neil McDade, sons; Grace Everest McDade, their mother and former wife of Clint McDade; Edith McDade, wife of Everest; Ruth McDade, wife of Neil; and Dorothy McDade Ferguson, a daughter of Clint McDade and Grace Everest McDade, in and to various corporations and partnerships owned in varying proportions by the several members of the family. The value of the several enterprises was considerably in excess of $500,000. Because of personality clashes it had become necessary that division be made, some of the family taking some of the businesses and others taking other businesses. In the course of the negotiations Everest McDade and wife, Edith, sold their interests to other members of the family.
These transfers involved some fifty or sixty separate documents. Disputes arose and litigation ensued as a result of which Everest McDade was declared by a jury to be mentally incompetent to execute the contracts which he signed disposing of his interests in the family busi
Some assignments of error by Neil McDade and wife, Ruth McDade, G-race Everest McDade and Dorothy Mc-Dade Ferguson were sustained. The primary contentions of Everest McDade on appeal by his then guardian ad litem, Hon. Robert C. McEwan of Chattanooga, were sustained and it was adjudged that his contracts were voidable. The cause was remanded for the lower court to redetermine the respective rights of the parties in all of the various family businesses after taking into consideration the profits made by the businesses and the services rendered by the several members of the family to the businesses.
Upon a remand another large record of over 1,200 pages was made. Mr. McEwan, guardian ad litem for Everest McDade, died and Hon. Eugene Collins of the Chattanooga Bar was appointed. He has rendered very valuable service as guardian ad litem for Everest Mc-Dade. The clash of personalities has persisted. Because of the protracted litigation all of the businesses have suffered. Some of them are on the verge of bankruptcy.
On April 12,1965, His Honor the Chancellor entered a final decree adjudicating the rights of' the parties. Everest McDade and his wife, Edith McDade, were the successful litigants upon the trial below. They have not appealed from the Chancellor’s decree. The opposing parties, Neil McDade, et al, have filed a broad appeal. This cause was assigned to the Western Section of the Court of Appeals for hearing in Knoxville on February 14, 1966.
Accordingly, in lieu of the usual assignments of error, appellants Neil McDade et al filed a petition in this court setting out the salient provisions of the decree of the Chancellor below and outlining those provisions which the appellants thought should be modified as the most equitable adjustment of the many complex problems involved in this protracted litigation. The petition made no request for modification of the decree insofar as it affected the rights of Edith McDade, wife of Everest MoDade. The modifications sought affect only the interests of Everest McDade who has been declared mentally incompetent to contract with his brother, sister and mother.
Eugene N. Collins, guardian ad litem of Everest Mc-Dade, after conference with his client and ward, Everest MoDade, filed an answer or reply in which objection was made to certain portions of the proposed modification.
Edith McDade represented herself in the court below. Since it is not sought on this appeal to change any part of the decree insofar as it affects her rights, it is not necessary that she be represented either by attorney or in person on this appeal.
On March 26,1966, this court entered an interlocutory order allowing the pledge of all of the stock of the Pepsi Cola Bottling Company of Chattanooga to secure a loan of $50,000 for the company from the parent Pepsi Cola Company of California and discharged all injunctions and restrictions against the pledge of said stock entered by the court below. We felt that this order was necessary to prevent bankruptcy of the Pepsi Cola Bottling Company of Chattanooga which was imminent.
We have reread our opinion in this case of date November 25, 1958, in 45 Tenn.App. 487, 325 S.W.2d 575. We have carefully considered the decree of the Chancellor entered of date April 12, 1965, the petition for modification and the answer of the guardian ad litem and the record of the trial below which has been filed in this court. It is the opinion of this court that it is manifestly to the best interests of all the parties to this litigation, including Everest and Edith McDade, and fair to all that the petition for modification should be sustained in a large measure but there are some provisions to which we think the objections of the guardian ad litem are well taken. We deem it of vital importance that the rights of
Accordingly, we hold that the decree of the Chancellor below should be modified and/or affirmed as follows:
(1) The memorandum opinion of the Chancellor filed July 18, 1963, as amended by order entered February 4, 1964, nunc pro tunc for December 2, 1963, is hereby affirmed except insofar as it is in conflict with subsequent portions of this opinion.
(2) Archer Paper Company building remains the property of Southland News Company, Inc. It has not been sold as first suggested in the memorandum opinion of the Chancellor.
(3) The decree of the Chancellor awarding judgments of $15,399.90 and $19,444.10 to Everest McDade and $65,000 to Edith McDade are affirmed except Pepsi Cola Bottling Company of Chattanoga is exonerated from said judgments.
(4) Said judgments totaling $99,844 in favor of Everest McDade and Edith McDade shall be paid at the rate of $10,000 per year, payable quarterly out of the net
If any or all of the corporations (exclusive of Pepsi Cola Bottling Company of Chattanooga) or individuals do- not make said payments then such installment payments may be satisfied by execution on any property of the various judgment debtors named hereinabove.
If any installment payment due each quarter remains unpaid for six months or more, then the entire principal balance, plus accrued interest, shall then be immediately due and collectible by execution on any property of the various judgment debtors both individuals and corporate, jointly and severally.
(5) The expenses of the court reporter which have heretofore been paid out of funds held by the Clerk &
(6) The Chancellor’s decree relating to the ownership of the stock in the various corporations will be modified so as to provide as follows:
The stock of the different corporations would be redistributed as follows:
CLINT McDADE & SONS, INC.
Shares of Stock
Neil McDade 80
Everest McDade 80
Ruth McDade 75
Grace McDade 75
Treasury Stock 90
SOUTHLAND NEWS CO., INC.
Shares of Stock
Neil McDade 85.50
Everest McDade 85.50
Dorothy McDade 50.00
Grace McDade 50.00
PEPSI COLA BOTTLING CO.
Shares of Stock
Neil McDade 100
Grace McDade 100
Treasury Stock 200
(7) The request of the appellants to modify that portion of the Chancellor’s decree relating to the payment of the several $28,500 notes due by Clint McDade & Sons, Inc. is denied and the decree of the Chancellor thereon is affirmed.
The special guardian to be appointed by the Chancery Court should be a mature, successful businessman and unrelated and unconnected financially or socially with any of the parties to this litigation. He should enter upon his duties with an open mind and without prejudice for or against any of the parties to this litigation. He shall have the sole authority to attend the stockholders’ meetings and vote the shares of stock of Everest McDade in Clint McDade & Sons, Inc. All monies due and payable to Everest McDade by any of the parties to this litigation both on the judgments hereinabove set out or out of the liquidation of Southland News Company, Inc. or as future dividends on Everest’s stock in Clint McDade & Sons, Inc. shall be paid to such special guardian.
Since Everest McDade and wife are now living in North Carolina where Everest is pursuing graduate
(9) The provision of the Chancellor ’s decree denying the corporations the right to employ Grace McDade, Ruth McDade and/or Dorothy McDade Ferguson is reversed and will be omitted from the decree entered in this court.
(10) The provision of the decree below relating to the liquidation of Southland News Company, Inc. will be modified so as to provide that the assets of the corporations, including the Archer Paper Company building, will be liquidated by the officers of the corporation as expeditiously as is economically feasible keeping in mind the regulations of the Internal Revenue Department so as to reduce corporate taxes as much as possible. The officers of Southland News Company, Inc. will confer regularly with the special guardian for Everest McDade and keep him fully informed as to the plans and progress of liquidation. If the special guardian shall be of opinion that the financial interests of Everest McDade are being substantially prejudiced by any phase of the liquidation, he shall have the right and of course it shall be his duty to make objection to the officers and if necessary ultimately apply to the Chancellor for injunctive relief. As long as the special guardian believes that the officers of Southland News Company, Inc. are liquidating the affairs of the corporation in good faith and in a manner which they honestly believe to be to the best interest of
All debts, loans and advances heretofore made to any of the stockholders of Southland News Company, Inc. will be repaid out of monies belonging to such stockholders, excluding charges to stockholders resulting from liquidation of the tax “suspense account.”
(11) The award of $20,000 as a fee to Eugene Collins for his services as guardian and attorney ad litem for Everest McDade through April 11, 1963, is affirmed and the appellants are charged with the payment of this fee. In addition, Eugene Collins is allowed a fee of $1,500 for his services from April 11, 1963, through this court of which amount $1,000 shall be payable by the appellants and $500 shall be chargeable to Everest McDade.
(12) That portion of the decree below which allowed Everest and Edith McDade reasonable fees for accounting services will be reversed but the appellants will be required to pay accounting fees to Robert Johnson in the amount of $3,080.85 and shall not be obligated to pay any other accounting fees for services for benefit of Everest or Edith McDade.
(13) The order of the Chancellor entered of date December 30, 1959, nunc pro tunc December 17, 1959, enjoining transfer and disposition of any of the assets
(14) Nothing in the decree shall be construed to abridge any of the rights of Everest McDade as a minority stockholder in Southland News Company, Inc. or Clint McDade & Sons, Inc. His special guardian shall have right of redress on his behalf for any alleged illegal or improper conduct on the part of any official of Clint McDade & Sons, Inc. or Southland News Company, Inc. occurring after the date of the trial below. All matters of controversy occurring up to the date of trial below are merged and adjusted in the decree to be entered on this opinion.
(15) The final decree in this cause shall further provide that the interest of Everest McDade in the property involved in this litigation shall be liable for the payment of legal fees accrued to Judge David Tom Walker and
The cause will be remanded for the enforcement of the decree herein entered. Upon the appointment and qualification of the special guardian to handle the financial affairs of Everest McDade, Eugene Collins will be permitted to resign and be discharged from all further responsibility in this cause.
It has been our intention to dispose of and adjudge all matters, in litigation between the parties in this opinion. We invite counsel in the preparation of the final decree to be entered to make sure that all matters in litigation are finally adjudged. The costs in this cause shall be taxed primarily against Clint McDade & Sons, Inc. with judgment over against Neil McDade, Everest McDade, Ruth McDade, Grace McDade and Dorothy McDade Ferguson and Southland News Company, Inc.
Rehearing
ON PETITION FOR REHEARING
A final opinion was- filed in the above styled cause of date April 28, 1966, modifying the decree of the lower court and remanding the case. On May 16,1966, appellees Everest McDade and wife, Edith McDade, filed a petition, pro se, requesting fifteen days additional time within which to file a petition for rehearing. On the same date they filed a petition for rehearing. Both petitions must be denied for the following reasons:
(1) They were filed more than ten days after the filing of our opinion on April 28, 1966, and therefore not within the time allowed by Rule 22 of this court.
The judgment of the lower court insofar as Edith McDade is concerned was in all things affirmed and she was in no manner adversely affected by the opinion of date April 28, 1966.
Everest McDade was declared by the lower court after a jury trial mentally incompetent to deal with the other members of his family relating to the family business. On the basis of this adjudication he was granted relief from his original contracts of sale of his interests in the family enterprises. See McDade v. McDade, November 25, 1958, 45 Tenn.App. 487, 325 S.W.2d 575.
During all the litigation which has ensued from that time tO' the present time the adjudication of mental incompetency has continued. Everest McDade has been represented by a guardian ad litem appointed by the Chancery Court of Hamilton County. We think his guardian ad litem has represented the interests of his ward faithfully and with considerable success.
While formal assignments of error were not filed on behalf of any of the parties, this court considered the entire transcript of the record including our former opinion delivered November 25, 1958, and the decree of the lower court from which the present appeal was brought.
This litigation has been most complicated and involved. It must be remembered that fifty-one documents were required to work out the original agreement whereby Everest and Edith McDade sold their interests in the McDade family enterprises to the other members of the family. This court, on the former appeal, approved a
In our opinion of date April 28, 1966, we made an adjudication which we thought was both equitable and to the best interest of all the parties. We are still of the opinion that our judgment was correct. We believe that Everest McDade will profit financially by the judgment entered upon said opinion even though he is not satisfied with it. It is seldom that a judgment can be entered by an appellate court which is satisfactory to all the parties concerned.
A decree denying the petitions of Everest and Edith McDade will be entered.