Bituminized Brick & Tile Co. v. Simons Brick Co.
Bituminized Brick & Tile Co. v. Simons Brick Co.
Opinion of the Court
The corporation plaintiff in this action of interpleader sought a judgment determining the ownership of certain designated shares of its corporate capital stock. The plaintiff’s complaint proceeded upon the theory that there were conflicting claims to the title of the stock in suit which were being asserted repeatedly by the defendant *689 Simons Brick Company on the one hand and the six other defendants on the other hand. All of the defendants to the action cross-complained and by appropriate allegations pleaded their various claims to the stock in question. The trial court found, among other things, that the consideration for the issuance of the stock in controversy was paid solely by the Simons Brick Company, that said stock was issued in the name of Joseph Simons and E. O. Simons as trustees for the owner thereof, namely, the Simons Brick Company, that the latter, as the owner of the stock, was entitled to all dividends paid thereon, and that neither defendant Joseph Simons nor the other defendants, as the heirs of E. 0. Simons, deceased, had any interest in said stock or in the dividends due therefrom. The plaintiff, Bituminized Brick & Tile Company, was adjudged to be relieved from all liability for and on account of its dealings with the said stock, and judgment was rendered and entered in favor of the defendant Simons Brick Company, declaring it to be the owner of and entitled to the said stock. From this judgment an appeal has been taken upon the judgment-roll and bill of exceptions, a reversal being urged primarily upon the ground that the evidence does not sustain the findings in the particulars (1) that it does not appear from any competent evidence that the defendant Simons Brick Company was the actual owner of the stock; (2) that there is no evidence that the consideration for the stock was paid by the defendant Simons Brick Company. The two questions involved in this contention are so closely interwoven as to justify a single discussion of the evidence bearing upon that phase of the case.
Upon behalf of the Simons Brick Company, and in support of its claim of ownership of the stock in suit, evidence was adduced to the effect as follows: The plaintiff, Bituminized Brick & Tile Company, was incorporated about the seventeenth day of February, 1908, and at that time the defendant Simons Brick Company was a corporation of which the defendant Joseph Simons and E. O. Simons were directors and,, respectively, president and secretary. Aside from purely nominal stockholders, all of the stock in the Simons Brick Company was owned by three brothers, Joseph Simons, Walter Simons, and E. 0. Simons, since deceased. The Bituminized Brick & Tile Company was organized and incorpo *690 rated under the laws of the state of California pursuant to an agreement entered into by and between the Simons Brick Company, Fairchilds-Gilmore-Wilton Company, and one George P. Griffith, whereby it was understood and agreed that the parties to the agreement would respectively advance proportionately the money needed to establish and maintain the new corporation in the business of manufacturing bituminized brick. The defendant Simons Brick Company advanced to the Bituminized Brick & Tile Company,- from time to time in keeping with said agreement, the sum of two thousand and sixty-odd dollars in cash or the equivalent of cash. At its organization meeting, the Bituminized Brick & Tile Company caused to be issued forty and one-half shares of its capital stock in the name of E. O. Simons and the defendant Joseph Simons. At the time of the issuance of said stock said Joseph and E. O. Simons were, respectively, the president and secretary of the Bituminized Brick & Tile , Company. After the issuance of the said stock to the said Joseph Simons and E. O. Simons, the Bituminized Brick & Tile Company levied an assessment thereon, which was paid by the defendant Simons Brick Company. When issued the said stock was deposited in the safe of the Simons Brick Company and remained there up to the time of the commencement of the action, and was at all times carried as a corporation asset on the books arid bank statements of the corporation. Prior to the commencement of this action, Walter Simons purchased from the other stockholders of the Simons Brick Company all of the stock in the said Simons Brick Company with the exception of the shares of the minor children of E. O. Simons, deceased, and the one share of stock apiece held by the members of the board of directors to enable them to qualify. The question thereupon arose as to whether the shares of stock in the Bituminized Brick & Tile Company passed as assets of the Simons Brick Company, or whether they were personal holdings of the parties in whose names they were issued, namely, Joseph, Walter and E. O. Simons. The defendants Laura Simons Garfield, Joe Taylor Simons, and Helen Simons, the two last-hamed persons being minors, and Laura Simons Garfield the guardian of the persons and estates of the minors, were, during all of the times involved in the controversy concerning the stock, the sole legatees and devisees by last will and testa *691 ment of the estate of E. O. Simons, deceased, who died in or about the month of June, 1913. They were the widow and children of E. O. Simons, deceased, and were made defendants in this action in his place and stead.
The minutes of the organization meeting of the Bituminized Brick" & Tile Company show that the president and secretary thereof, namely, Joseph and E. O. Simons, were authorized to issue the shares of stock in controversy here to said Joseph and E. O. Simons “in consideration of moneys to be paid by said parties for the building of the plant of this company.” Apparently it is upon this latter piece of evidence that counsel for appellant rely primarily to support their contention that the initial agreement to advance the needed funds for the establishment of the business of the Bituminized Brick & Tile Company was purely personal to Joseph and E. O. Simons, and was not the corporate conduct and contract of the Simons Brick Company. Standing alone, the minutes of the organization meeting mentioned might suffice as prima facie evidence of the fact that the agreement to advance the money was the personal and individual obligation of Joseph and E. O. Simons. But, taken and considered in conjunction with established circumstances concerning the conception and consummation of the initial agreement, the conclusion is inescapable that the Simons Brick Company, as represented by Joseph and E. 0. Simons, was the real party obligated and to be benefited by the initial agreement, and not Joseph and E. 0. Simons individually. Incidentally, it should be noted that the record is barren of any evidence showing or tending to show that Joseph and E. O. Simons individually and directly gave any consideration for the issuance of the stock in suit, or that any consideration was given therefor aside from the money or its equivalent advanced by the Simons Brick Company to the Bituminized Brick & Tile Company. Moreover, there is evidence that, when the cross-defendant Walter Simons discovered that the stock in suit stood in the names of Joseph and E. O. Simons upon the books of the Bituminized Brick & Tile Company and not in the name of the Simons Brick Company, he made objection thereto, specifying as grounds thereof that “it was the Simons Brick Company’s money that went into the investment,” and insisted that “the stock belongs to the Simons Brick Company.” To this objection *692 and claim of Walter Simons, Joseph and E. O. Simons replied: “All right, we will straighten it out,” and thereupon, so some evidence shows, agreed with the said Walter Simons that the stock in suit should be “divided up in the names of Joe Simons, Elmer Simons and 'Walter Simons . . . and that it, would be held by the Simons Brick Company in that way.” The stock was accordingly returned and reissued by the Bituminized Brick & Tile Company to Joseph, E. O., and Walter Simons in certain specified proportions. There is evidence tending to show that the purpose in causing the stock to be issued in the names of the three brothers, rather than in the name of the corporation, was to enable the former to qualify as officers of the Bituminized Brick & Tile Company.
It may be conceded, as counsel for appellant contend, that the manner of making the several payments or advancements, either in cash or the equivalent of cash, claimed to have been made by the Simons Brick Company, coupled with the character of the bookkeeping entries of the several amounts which went to make up the sum total of $2,060, might have supported the inference that said sum and the several items thereof were carried by the Simons Brick Company as an open account with the Bituminized Brick & Tile Company, rather than as an entry of the passing from the Simons Brick Company of the consideration called for by the initial agreement. On the other hand, there was much evidence in explanation of said several payments which, when coupled with the circumstances, unnecessary to be detailed here, preceding, attending, and following the creation of the new corporation tended to show, and consequently warranted the inference which the trial court apparently made, that the said several items were entered and carried upon the books of the Simons Brick Company as evidence of the passing of the consideration called for by the initial agreement to promote the Bituminized Brick & Tile Company.
True, there is some evidence in the record which would have supported a finding contrary to that made by the trial court and, while counsel for appellant argue with much vigor that the preponderance of the evidence adduced upon the whole case should have compelled the trial court to make findings favorable to the appellant, of course, such an argu
*693
ment necessarily involves a weighing of conflicting evidence in order to determine where the preponderance may rest. That, however, was solely the province of the trial court.
It is contended upon behalf of appellant that, even though it be conceded, as we find, that there was evidence sufficient to support the finding of the trial court that the consideration for the stock in controversy was paid by the Simons Brick Company, nevertheless, the evidence adduced upon the whole case shows, it is claimed, that after the stock was issued there was an amicable agreement by and between Walter Simons, Joseph Simons, and E. O. Simons, who were practically the owners of the entire capital stock of. the Simons Brick Company, to apportion unto themselves and hold and own individually the stock 'of the Bituminized Brick & Tile Company and that, as a consequence of that agreement, Walter Simons, as one of the parties thereto, is estopped from questioning' the validity of the agreement. The answer to this contention is to be found in the fact that the record shows, as previously indicated, evidence to the effect that, when Walter Simons protested the assumption of individual ownership of the stock in suit by Joseph and E. O. Simons, the latter agreed not only that the stock should be held in certain designated proportions in the names of Joseph, E. O., and Walter Simons, but that it should be so held by them as the property and asset of the Simons Brick Company. We need not stop, therefore, to consider the doctrine of estoppel as perhaps it may be applied to a situation where the stockholders of the corporation voluntarily and unanimously consent to a distribution of all or a part of the corporate assets among themselves in a manner and under circumstances which in no way impair the rights of creditors.
It was, as the trial court ruled, an original document. The contention that the subject matter of the document in question was hearsay in so far as defendant Joseph Simons was concerned is effectively and adversely answered by the record itself, which shows the foundation evidence for the introduction of the document in evidence to be that it had been “prepared by the Simons Brick Company at the request of the president Joe Simons,” and that the “data” therefor was “assembled” by “Mr. Joseph Simons . . . and Elmer Simons in the office of the Simons Brick Company.”
The judgment appealed from is affirmed.
Wilbur, J., and Sloane, J., concurred.
Reference
- Full Case Name
- BITUMINIZED BRICK & TILE COMPANY (A Corporation), Plaintiff, Cross-Defendant and Respondent, v. SIMONS BRICK COMPANY (A Corporation), Defendant, Cross-Complainant and Respondent; JOSEPH SIMONS Et Al., Defendants, Cross-Complainants and Appellants
- Cited By
- 4 cases
- Status
- Published