Ireland v. Ireland Advertising Agency
Ireland v. Ireland Advertising Agency
Opinion of the Court
Opinion by
The finding by the chancellor to the effect that no gift
Donovan, the other appellant, had been for years in appellee’s employ, and was perfectly familiar with actual conditions both as to the ownership of the property and the contemplated change of the business into a corporation. Immediately following upon the organization of the corporation, and the appellee’s departure from the country, and without the knowledge of the latter, he entered into a written contract with Mrs. Ireland, the wife, wherein Mrs. Ireland, asserting her individual ownership of 1,840 shares, agrees that Donovan shall become general manager of the corporation for a period of five years at a fixed salary, and in addition a certain amount of the capital stock held by her. This was not only an unwarranted assumption of power on the part of Mrs. Ireland, but such fact must have been known to Donovan. He knew of the bill of sale; he fully understood its purpose; he knew of Ireland’s absence from the country, and he must have known that what Mrs. Ireland was attempting
By paragraph nine of the decree, the plaintiff, Howard I. Ireland, is authorized upon notice to call a meeting of the stockholders of the Ireland Advertising Agency, for the purpose of electing officers of the corporation, and the transaction of other corporate business. The decree without this feature provided full relief to the plaintiff. Its inclusion was not only not required for plaintiff’s protection, but the authority of the court to make such order, as the case stood, may well be doubted. The decree calls for amendment in this particular, and the ninth paragraph of the decree is accordingly stricken therefrom. As so amended the decree is affirmed and appeal dismissed.
Reference
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- Trusts and trustees — Construction—Shares of corporation — Intent to defraud — Collusive agreement — Annulment of contract — Equity. 1. A decree in equity declaring a trust in favor of the plaintiff with respect to certain shares of stock held in his wife’s name and annulling a contract entered into between the latter and another defendant by which the latter was to receive a certain amount of capital stock in addition to salary for services to be rendered the corporation, will be sustained where the court has found, on sufficient evidence, that the plaintiff, on account of ill health, was indisposed to give personal attention to the business he had established; that contemplating a period of rest in travel, he executed a bill of sale of the business to his wife to invest her with legal title, for the sole purpose of enabling her, in his absence, to transfer it to a corporation thereafter to be created; that such corporation was formed with a capital stock of 2,000 shares, which represented nothing of value but the property included in the bill of sale, of which shares the wife received 1,840; that later the wife became president and treasurer, displacing the husband, and that then the wife, asserting her individual ownership of the stock, entered into the contract, with the other defendant, in pursuance of a scheme to exclude the plaintiff from all control over his property, in which scheme both were active participants; there being nothing in the evidence from which an intention to make a gift to the wife could be derived. 2. In such a case a clause of the decree authorizing the plaintiff upon notice to call a meeting of the stockholders of the corporation for the purpose of electing officers and the transaction of other corporate business, will be stricken out, as being unnecessary and based on doubtful authority.