Williamson v. Marshall

WASTE, P. J.

The plaintiff appeals from a judgment entered in favor of the defendants, after demurrer sustained without leave to amend. While the demurrer attacks a number of alleged defects in the complaint, none of the special assignments would have justified it being sustained without leave to amend. Consequently the main question to be considered upon this appeal is the sufficiency of the complaint to state a cause of action.

Concisely stated, it is alleged that the plaintiff and the defendants entered into an agreement for the formation of a corporation to be known as the California Food Specialty Company, to take over the business and property of an insolvent firm of which defendant Marshall was at the time the liquidating partner. It was agreed that the corporation should have an authorized capital stock of $30,000; that plaintiff should purchase one-third of such stock for the sum of $10,000, at par; that defendant Palmer should sell and deliver to the corporation certain land which she would buy for that purpose from the insolvent firm, together with the buildings and equipment thereon, she to take in payment 200 shares of the stock of the corporation of the par value of $20,000, the plan being that plaintiff and defendants would own and hold, upon the completion of the organization, its entire capital stock. As part of the transaction it was agreed that plaintiff should be a director and officer of the company, at a compensation of $225 per month, and should, jointly with the defendant Marshall, have control and management of the executive affairs of the corporation. It was further agreed between the parties that if the plaintiff disagreed with the defendants about the conduct or management of the business, or should become dissatisfied with the acts of the defendant Marshall, or disagree with him concerning those matters, the defendants would at any time, upon demand of the plaintiff, purchase from him all of his 100 shares of the capital stock of the corpora

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tion at the fair value of said shares. This offer, which was not in writing, was accepted by the plaintiff, who, at the request of the defendants and in performance of his agreement, forthwith paid $1,000 upon contracts for machinery for the use of the corporation with which to begin business.

The corporation was organized according to the agreement. Defendant Palmer purchased the real estate, buildings, and equipment from the’ insolvent copartnership of Post, Marshall & Post, and transferred the property to the California Pood Specialty Company, receiving in exchange 200 shares of the stock of the corporation of the par value of $20,000. Plaintiff paid into the treasury of the company the balance of $9,000, due on his part of the agreement, and received 100 shares of the capital stock of the par value of $10,000. Defendant Palmer placed one share of her stock in the name of the defendant Marshall to qualify him, and the corporation was organized with plaintiff and the two defendants as directors. The board of directors elected Marshall president and the plaintiff vice-president, respectively, each with a salary of $225 per month, and by resolution made Marshall as president and plaintiff as vice-president, jointly the managers of the corporation, with all powers usual in such matters.