Jones v. Rutherford

SEAWELL, J.

Defendant Crystal Rutherford appeals from a judgment that plaintiff Samuel J. Jones have and recover 37% shares of the corporate stock of San Mateo Greyhound Breeders’ Association. Appellant claims to be the owner of said stock by virtue of a gift from her husband, Bruce H. Rutherford. The corporation commissioner had given his consent to the release of said stock by defendant California Pacific Title and Trust Company, escrow holder, but it retained possession because of the conflicting claims thereto. Over the opposition of plaintiff the action was tried by a jury, which returned a general verdict for plaintiff upon which the judgment was entered. The court thereafter

[605]

denied the motion of defendant Crystal Rutherford for a new trial.

It appears from the record that Bruce Rutherford, husband of appellant, and Samuel Jones, plaintiff herein and an attorney at law, became interested in promoting a dog racing track near San Francisco. Plaintiff claims the stock which is the subject of this action by virtue of an agreement which he testified was made between him and Rutherford for equal division of whatever they should receive for promoting the dog racing track. Neither Rutherford nor Jones had funds to invest in the enterprise, but they planned to interest others in it.

An option on land in San Mateo County suitable for a dog racing track was taken in the name of Rutherford. One Martin and others associated with him were also interested in developing a dog racing enterprise. Rutherford and Jones were brought together with the Martin interests by one Haas. It was agreed that they should work together. Rutherford and Jones were to take steps to procure the incorporation of the town of Bayshore, in which the race track was to be located, and to obtain a permit from said town for the operation of the track. Martin and his associates were in contact with P. P. O’Connor and others who were in a position to finance the enterprise, and who subsequently incorporated the San Mateo Greyhound Breeders’ Association. Thereafter the option on the race track site and the permit were assigned to the attorney for the association, which developed the property and operated a race track thereon.

In a contract of November 3, 1932, between Martin and O’Connor, to which Rutherford assented in writing, it was agreed that for services rendered five per cent of the stock of the corporation to be formed should be issued to Martin and five per cent to Rutherford. Rutherford subsequently gave directions that 37 of the 75 shares which constituted his five per cent should be issued to one Collins, and 38 shares to his wife, the appellant herein. The shares issued in the name of the wife, which she claims as a gift from her husband, are the subject of the instant action. The jury and the trial court upheld plaintiff’s contention that it had been agreed between him and Rutherford that money and property received for their promotional services should be divided equally between them, and by virtue thereof plaintiff was entitled to the stock which he claims herein.