Moore v. Bowes

SHENK, J.

Some of the plaintiffs are stockholders of the Six-twenty Jones Corporation and as such are beneficiaries under a certain voting trust agreement. Two of the trustees under said agreement are also plaintiffs. By this action it was sought to remove the defendants, W. K. Bowes, E. L. Bowes and Arthur H. Garland, the remaining trustees under the agreement. The plaintiff beneficiaries expressly sued on behalf of themselves and all of the other numerous stockholders and beneficiaries under the agreement. The court

[164]

made findings and entered judgment removing W. K. Bowes and E. L. Bowes as voting trustees, enjoining the removed trustees from exercising any of the powers enumerated under the trust agreement, including the power to appoint their successors, and awarding to the plaintiffs $2,000 as counsel fees and a like sum to the defendant Arthur H. Garland, payable out of the trust funds. The defendants Bowes appealed from the judgment. Hereinafter the word “defendants” will refer to the appellants, unless otherwise noted.

On the appeal the defendants contend that the court made no specific finding of unfitness or abuse of trust on their part and that their removal as trustees without such specific finding was reversible error, that all of the stockholders who were beneficiaries of the voting trust agreement should have been joined in the action and that the order overruling the defendants’ demurrer was error, that the court had no power to enjoin the defendants from naming their successors; that it was error to allow attorney fees to the plaintiffs, and that the defendants are entitled to.,an allowance for counsel fees for services rendered in the trial court and on the appeal.

From the findings the following facts appear: Of the 3,-285 outstanding and issued shares of the capital stock of the corporation, 3,272 shares were represented by voting trust certificates owned by numerous purchasers of the capital stock of the Six-twenty Jones Corporation. The voting trust agreement names W. K. Bowes, E. L. Bowes, E. C. Smith, Chas. Schaeffer and Arthur H. Garland as second parties and “Voting Trustees”.' In the exercise of their powers under the agreement the voting trustees elected themselves directors. Bowes Brothers & Company, consisting of the defendants Bowes, were employed by the directors as supervisors of the management of the hotel property of the corporation at a salary of $100 per month. On June 22, 1934, W. K. Bowes, without authority or the consent of any of the directors, withdrew $600 from the corporation funds, one-half of which he delivered to his brother, and this sum was used for their own purposes. In August, 1934, a check of Bowes Brothers & Company for that amount, payable to Six-twenty Jones Corporation, was delivered to the corporation with a written memorandum to hold for further instructions. The check was paid on September 5th following. On October 1, 1934, by vote of the three defendants the board of direc