Keifer v. Myers

SIIAW, J.

Appeal from a judgment of nonsuit.

At the time in question the Sanitary Laundry Company was a corporation with a capital stock of $40,000, divided into four hundred shares of the par value of $100 each. Of this stock the appellant, J. H. Keifer, owned one hundred and ninety-eight shares, one George R. Myers owned one hundred and ninety-eight shares, and the remaining four shares were owned by three other persons, who, with said Keifer and said George R. Myers, constituted the board of directors of said corporation. The corporation was in financial distress, and it appears that neither appellant nor said George R. Myers was in a position to extend it the aid needed. The appellant had borrowed from the Broadway Bank and Trust Company $4,500, evidenced by two promissory notes,

[670]

and as security for their payment had, in addition to giving a mortgage upon certain real estate owned by him, deposited his one hundred and ninety-eight shares of stock in pledge with said bank as collateral security. The laundry company was largely indebted to said George R. Myers for moneys which he had loaned it. Under these conditions, the respondent R. H. Myers and J. H. Keifer entered into negotiations, which, on December 30, 1903, culminated in a. transfer of respondent’s one hundred and ninety-eight shares of stock to said R. H. Myers, and contemporaneously therewith the execution of an agreement in writing wherein it was recited that said Keifer had sold, assigned and transferred to R. H. Myers one hundred and ninety-eight shares of stock and that R. H. Myers was the owner and holder thereof; that said stock was pledged to said bank as additional security for the payment of a certain promissory note of $4,500, executed by said J. H. Keifer and his wife, which said note was also secured by a mortgage of real estate; that said laundry company during the time said Keifer was a stockholder had become largely indebted to George R. Myers for moneys by him loaned to said company; that said R. H. Myers had loaned and advanced, and would thereafter loan and advance, divers sums of money to discharge a part of the indebtedness of the said company in order to save it from bankruptcy, and to pay such of the operating expenses as might be necessary for the best interests of the company; that said Keifer desired an option to purchase one hundred and ninety-eight shares of said stock, and wherein said R. H. Myers covenanted and agreed to sell to said Keifer, within one year, time being made the essence of the contract, one hundred and ninety-eight shares of said stock, upon Keifer making payment to R. H. Myers of: 1. All moneys paid to said bank by R: H. Myers on account of the notes of said Keifer, for the payment of which said stock was held as collateral security ; 2. One-half of all moneys theretofore or thereafter, up to the exercise of the option, advanced to said company by R. H. Myers, less any payments made thereon by said company; 3. One-half of all moneys theretofore loaned to said laundry company by said George R. Myers, less any payments made thereon by said company; and 4. Interest on said sums at seven per cent per annum. It was further