Braden v. Lewis

California Court of Appeal Jul 7, 1953 No. Civ. 8164Published

Before: Jones

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Holding. The court held that the defendant, having acquired title to the plaintiffs' stock, was bound by the terms of the transfer agreement to pay the plaintiffs their contractually defined share of the profits from the sale of the corporate property. The trial court acted within its discretion in conducting an accounting to determine those profits and in reopening the case to admit evidence of the sale proceeds.

Issues

Whether the trial court properly exercised its discretion in reopening the case to admit evidence of the sale of corporate property.
Whether the trial court's accounting of net profits from the sale of corporate property was supported by the evidence.
Whether the defendant, having accepted title to the stock, was liable for the share of profits promised as consideration for the transfer.

Disposition. affirmed

Quotations verified verbatim against the opinion

“There can be no question, it seems to us, of the discretionary power of the trial court to permit further evidence in any case at any time before decision where it is believed by the court that the ends of justice will be subserved by so doing.”

JONES, J. pro tem.

The plaintiffs in this action appealed in the first instance from the whole of the judgment but abandoned this appeal by an amended notice limiting the appeal to that portion of .the- judgment awarding them $4,3.53.51. against the defendant and cross-complainant, Lewis. Defendant Lewis appeals from the same portion of the judgment.

'In the complaint it is charged that plaintiffs owned 216 shares of the capital stock of the Laird Medical Building, Inc., and, -that the defendants, Lewis, Anater, and the corporation converted this stock to their own use to the damage

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of plaintiffs in the sum of $36,000. The defendants have denied this charge, and Lewis individually filed a cross-action to quiet title to the stock. Judgment went for him on his cross-complaint, but on their action against him plaintiffs were given a monetary judgment in the amount of $4,353,51. No appeal has been taken from the portion of the judgment quieting Lewis’ title to the stock, and that portion of the judgment has now become final.

The Laird Medical Building, Inc., was organized in March, 1946, with an authorized capital of 900 shares of common stock with a par value of $100 per share. This stock was issued, 216 shares to John T. Laird; 216 shares to Frank A. Girard; 216 shares to Winfred C. Braden; 216 shares to George W. Lewis; and 36 shares to William B. Anater. All of the stock was delivered to Lewis, who paid over $90,000 to the corporation. Concurrently, and as part of the transaction, Braden executed and delivered to Lewis his promissory note in the amount of $21,600, this being at the rate of $100 per share for his 216 shares of stock. The note thus given provided that it was not to bear interest and was to be paid out of such sums as Braden would receive from the corporation, other than payments to him for services. It is not questioned that the stock given to Lewis by Braden was to secure the payment of Braden’s note.

The $90,000 paid over to the corporation by Lewis was applied on payment for the construction of the Laird Medical Building, and for the purchase of the lot on which it was built. The purchase price of the lot was $12,181.13 and the cost of the building, $104,857.33, making a total expenditure for land and building of $117,038.46. The excess of the total cost over the $90,000 advanced by Lewis was obtained by the corporation by borrowing.

Braden v. Lewis

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