84 Md. 129 | Md. | 1896
delivered the opinion of the Court.
The bill of complaint which was filed in Circuit Court No. 2, of Baltimore City, by the appellee against the appellant, a body corporate, prayed that a decree might be passed enjoining and requiring the appellant to transfer upon its stock-books, to the appellee, nine shares of its capital stock that were then and still are standing in the name of Louis Yakle; but \vhich are claimed by the appellee to belong, to and to be owned by him. It is averred in the bill that upon the formation of the Victor G. Bloede Company of Baltimore, which is the party appellant in this cause, the appellee became entitled to a large part of the company’s capital stock, and believing that Louis Yakle intended to purchase from him nine shares thereof, he instructed the treasurer to make out' a certificate in the name of Yakle for that number of shares, which was accordingly done. That the appellee then tendered the certificate to Yakle, who declined to receive or to
The answer relies on this by-law and insists that the stock certificate was regularly issued to Louis Yakle and that the nine shares were properly placed in his name, and that the certificate cannot be transferred to the appellee except in accordance with the provisions of the by-law just transcribed. The answer further goes into a detailed statement as to the' method in and by which the appellant company was formed; sets forth the substance of an agreement alleged to have been entered into between the appellee and the Joseph Bancroft and Son’s company, a Delaware corporation, whereby as a condition precedent to the latter corporation becoming a large stockholder in the yet unformed appellant company, a list of stockholders, including Yakle, with the number of shares which each was to hold, was arranged, and then insists that the nine shares in controversy were issued to Yakle pursuant to this agreement and not by error or mistake at all.
It appears that the appellee, who is a chemist, has for some years past been conducting a large business in Baltimore City as a manufacturer of dyes and colors made according to his own secret processes. ' The Joseph Bancroft and Son’s Company of Wilmington, a body corporate, engaged in dyeing cloth, was one of the appellee’s largest customers and dependent, to a considerable extent, upon him for some of the dyes and colors used by it. With a view of more closely identifying the interests of the two industries it was proposed that the appellee should cause a corporation to be formed to take over his entire business, and that the Joseph Bancroft and Son’s Company should be' allowed to have a part of the capital stock of the new corporation in exchange for an equal amount of the stock of the Wilmington Company. Thus the appellee would receive in the Bancroft Company an interest equal in value to the interest which' the latter corporation would obtain in the business of the appellee. It is not material who proposed this scheme and we need not discuss this controverted question. After several interviews and som"e negotiations the scheme was finally consummated. There is wide and abrupt conflict in the evidence as to the results reached in these negotiations ; but it would serve no useful purpose to enter into an analysis thereof,' or to set forth the reasons or the lines of reasoning which influence and sustain the conclusions to which we have come in respect thereto ; and hence we proceed, not to discuss the testimony bearing thereon, but after weighing it as we have carefully done, to state the deductions of fact, which a due consideration of all its details, in our opinion, warrants and justifies.
• When the Victor G. Bloede Company was formed for the purpose of taking over the business of the appellee the articles of association fixed the capital stock at one hun
From this statement it is obvious that these nine shares were originally part of the nine hundred and ninety-four shares issued in the first instance to the appellee by the ap
There are two conflicting contentions as to how the certificate for nine shares came to be made out in the name of Yakle. The appellee insists that he directed the treasurer of the company to so make it out, not because Yakle had agreed to take the stock, but because the appellee wished to give Yakle an opportunity to acquire it, though he did not then know whether Yakle would purchase the shares or not; whilst the appellant maintains that the certificate was made out in the name of Yakle pursuant to an agreement between the appellee and the Bancroft Company, so that neither the appellee nor the Bancroft Company, by having a majority of the stock, could control the corporation ; but that the control might be in the hands of a neutral third party. Each denies the contention of the other. Yakle was confessedly no party to the understanding set up by the appellant, and unless it be assumed that the appellee, for the purpose of preserving an equilibrium between himself and the Bancroft Company in the management of the Victor G. Bloede Company, deliberately agreed to gratuitously give away nine shares of his own stock for which he had paid value, the theory of the appellant cannot be adopted. The probabilities are all against it and the flat denials of the appellee and other witnesses are sufficient to justify its rejection.
But the by-law itself can, when invoked by the company, interpose no obstacle to the transfer of these shares for the reason that it is invalid. It is an unreasonable and a pal
The cases in 36 Md. 491, and 48 Md. 473, and others cited are distinguishable, for there the invalidity relied on by the stockholders was invoked to defeat, the claim of a creditor.
As we shall affirm the decree appealed from, we have not thought it worth while to consider the motion madfe to dismiss the appeal.
Decree affirmed with costs above and below.