275 Pa. 501 | Pa. | 1923
Opinion by
E. O. Reid and M. E. Reid, two of plaintiffs, together with J. W. Newbrough, one of defendants, incorporated the Rogers Coal Company, the other defendant, with a capital stock of $5,000, divided into fifty shares of $100 each; Newbrough being named as president', E. C. Reid secretary and M. E. Reid treasurer. In the articles of association, Newbrough appeared as subscriber for 30 shares of the capital stock and the Reids 10 shares each. Following the incorporation, Newbrough assigned to the company a tract of coal, held under lease, which it proceeded to operate. Subsequently disputes arose among the stockholders resulting in Newbrough giving notice of a stockholders’ meeting to be held for the purpose of electing new directors of the corporation, but, previous to the date set for the meeting, plaintiffs filed their bill to restrain its convening and the election of directors, until the court should ascertain the number of shares of stock owned by the parties respectively, and also asked that an accounting be directed for moneys Newbrough, as president of the company, failed to turn over to the treasurer and for general relief. After hearing, the court below found the three plaintiffs and defendant, Newbrough, each owned and was entitled to one-fourth of the capital stock, instead of the amounts to which they appeared as subscribers in the articles of association, and directed the president and treasurer to issue, to each, certificates of stock for their respective shares; also directing that defendant, Newbrough, as president, turn over to the treasurer funds in his hands belonging to the company and stating an account of indebtedness between the various parties to the proceedings. From the decree so entered defendants appealed.
The main question involved, as stated by appellants, concerns the ownership of the stock of defendant company. Appellants first contend the court was without jurisdiction of the subject-matter and that the proper
Appellants further contend the statement contained in the articles of association setting forth Newbrough’s subscription for thirty shares and E. C. Reid and M. E. Reid, ten shares each, is conclusive, and that the evidence to the contrary is not sufficient to sustain the decree. The trial judge found on testimony which he characterized as “clear and satisfactory” and “clear and distinct” that, before making application for the charter, it was agreed the three plaintiffs and Newbrough should each own one-fourth of the capital stock of the company and that while E. H. Reid was providing the cash necessary to develop the mine his name should not appear as an incorporator and for this reason Newbrough’s name was used as a subscriber, hot only for his own shares, but those belonging to Reid as well. Although the testimony of the three plaintiffs to this effect was contradicted by Newbrough, the latter’s credibility was seriously impaired by his assertion made to third persons to the effect that he owned merely one-fourth of the capital, which amount he subsequently changed to one-half and finally increased his claim to three-fifths, the amount for which he appeared as a subscriber. The conclusions of the court below are fully justified by the evidence and must be sustained.
In addition to determining the proportion of the capital stock owned by the parties respectively and directing the president of the company to transfer to the treasurer money in his hands belonging to the company, the court further stated an account between the various parties to the bill, which it incorporated in the decree. Such action was not asked for in the bill; it was neither necessary nor incidental to a disposition of the issues involved and the decree is now amended by striking therefrom paragraphs Nos. 2, 3,4 and 5. A discussion of the merits
The decree of the court below as above amended is affirmed at the costs of appellants.