Mahar v. Goodspeed

NCURSE, P. J.

Plaintiffs sued to impress a trust on certain corporate securities, for an accounting, and for damages in fraud. A nonsuit was granted as to defendant Pendell. The demurrers of certain other defendants were sustained and are involved in another appeal. After trial, judgment went for the remaining defendants. The plaintiffs have appealed from this judgment under section 953a, Code of Civil Procedure. They have printed in a supplement to their brief their evidence and their exhibit alone. This is not a fair compliance with the rules since the issues raised on the appeal are the sufficiency of the evidence to support material findings of the trial court. But the only difficulty presented on the appeal is in segregating the real issues from the mass of immaterial matter found in the briefs of both parties, one of which contains 389 pages of printing

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with a supplement of 353 pages, the other containing 373 pages.

The cause was tried on the theory that some of the defendants had assumed to act as trustees for plaintiffs and that they had, in conspiracy with other defendants, obtained possession of the trust

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to their advantage. Plaintiffs were shareholders in a bank in San Pedro which held as security for a loan certain shares of another corporation—The Van Camp Sea Pood Company. Some of the plaintiffs and some of the defendants were directors of the bank. Both the debt and the security were bad and, at the insistence of the bank examiners, the stock was sold at a pledgee’s sale. Defendant Pendell was the purchaser—either for the bank, as contended by defendants, or for the shareholders, as contended by plaintiffs. At that time the bank organized the Harbor Holding Company, a Nevada corporation, and Pendell transferred the shares to the corporation. These transactions occurred in 1924 and 1925. Soon after the transfer last mentioned, the shareholders in the bank sold their interests to another banking corporation, but the San Pedro Bank held all the certificates of stock in the Harbor Holding Company until June 15, 1927. At that time certificates for shares in the Holding Company were mailed to all the former owners of shares in the bank proportionate to their interest in the pledged stock sold to Pendell. At the same time a letter fully explaining all these transactions was mailed to every shareholder, including each of the plaintiffs. The latter refused to accept these certificates. Some of the defendants accepted and became the active participants in the affairs of the Holding Company. The company became involved financially—the corporation whose securities had been purchased at the pledgee’s sale having gone into the hands of a receiver. The Holding Company thereupon levied an assessment on all its shares and some of the defendants purchased the shares allotted to these plaintiffs. Full and due notice was given to the plaintiffs of these transactions. About seven years later the business of the Sea Food Company picked up and some dividends were paid. The plaintiffs then conceived that they had been defrauded some time between 1924 and 1927. In 1934 they commenced this action, charging all their former associates who had accepted stock in the Holding Company with fraud, misrepresentation, conspiracy, and breach of trust.