Venables v. Credential Insurance Agency, Inc.

DORAN, J.

Plaintiff, as a director and minority stockholder in the defendant corporation, filed the complaint herein against the corporation and the other directors, seeking a dissolution. The complaint alleged the existence of two factions which were deadlocked so that corporate business

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could not be advantageously conducted, together with various wrongful acts on the part of the defendant majority stockholders. Plaintiff was a former employe of the corporation who had withdrawn from such employment about a year previous to the filing of the complaint.

The answer sets forth that the defendants, owning more than 50 per cent of the corporate stock, desire to purchase plaintiff’s stock, and to that end request the court “to appoint three disinterested commissioners to appraise the fair value of plaintiff’s shares, and for an order directing the sale by plaintiff to defendants pursuant to the provisions of sections 4658 and 4659 of the Corporations Code.” Thereafter each side submitted three names of proposed commissioners, from which list the trial court selected two names from plaintiff’s list and one name from the defendant’s list. Commissioners Bulkley and Tichner are managers of insurance company offices and Commissioner George Gish is a certified public accountant. Further proceedings for dissolution were suspended upon defendants’ posting a $20,000 bond.

The order appointing commissioners declared that “The fair cash value of said shares . . . shall be the amount which a ready, able, willing and informed buyer would pay, and the amount which a willing and informed seller would accept for said shares in said corporation as a going concern, and not in liquidation thereof.” Pursuant thereto, the commissioners held hearings at which oral and documentary evidence was received and considered.

A written statement was thereafter made by the commissioners but was not filed within the specified time; plaintiff objected to further consideration but the trial court allowed the commissioners to file an amended appraisal report. The commissioners’ report recommends “as a fair cash value of 188 shares held by the Plaintiff, the amount of $4,240.85, or $22.56 per share. ’ ’ The report further states that the parties had agreed that the value of the Credential Insurance Agency’s net assets, aside from goodwill, was $10,389.73.