Nannizzi v. Caprile

California Court of Appeal Oct 10, 1919 No. Civ. No. 2886.Published

Before: Brittain

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Holding. The court affirmed the judgment, holding that a partnership dissolution agreement contingent upon the issuance of a corporate stock permit is valid and enforceable, and that partners cannot evade the terms of such an agreement while it remains possible to perform.

Issues

Whether a partnership dissolution agreement contingent upon the issuance of a corporate stock permit is valid and enforceable.
Whether the court may enforce a partnership dissolution agreement despite the absence of a permit from the commissioner of corporations at the time of judgment.

Disposition. Affirmed

Quotations verified verbatim against the opinion

“The agreement between the various partnerships was a valid one. It was a promoters’ agreement, binding upon them and good as an offer to the corporation, to become binding on the corporation upon its lawful acceptance of its benefits.”

“A contract valid in its inception may become voidable or impossible of performance by the failure of a subsequent contingency, but if the contingency is one which may happen, the parties are bound by their contract until it can be determined it cannot be enforced.”

“On this appeal, since the judgment simply bound them to their prior agreement, in contemplation of law, they cannot be aggrieved by it.”

Synopsis

APPEAL from a judgment of the Superior Court of the City and County of San Francisco. Edmund P. Mogan, Judge. Affirmed.

The facts are stated in the opinion of the court.

BRITTAIN, J.

In a suit for partnership accounting, dissolution, sale, and distribution of the assets, it was adjudged there had been full accounting and dissolution. The appellants are satisfied with that portion of the judgment. Upon findings, supported by evidence, that the plaintiff partners had agreed with the defendant partners that the partnership should be dissolved and its property merged with that of other partnerships engaged in the same line of business, in a consolidation under a corporation to be formed, and that the partners should receive respectively stock in the corporation at par, equivalent to their respective interests in the partnership, the members of each partnership as a group

[500]

to receive such stock of equivalent value to the respective partnership contributions of property to the corporation assets, and the further finding, that application had been made in good faith to the commissioner of corporations for permission to issue the stock in accordance with this agreement, though the permit had not been granted at the time of the judgment, the court determined that if the permit should be granted the appellants would be entitled to their respective portions of the corporation stock. This part of the judgment only is attacked by the plaintiffs on this appeal.

[1]

On behalf of the appellants it is argued that, under the Investment Companies Act, prior to the permit from the commissioner of corporations no valid subscription for the corporate stock can be made. This is true. It follows that, regardless of any attempt on the part of the incorporators to subscribe for stock in excess of the original qualifying shares, there was no subscription for stock of the corporation.

[2]

The agreement between the various partnerships was a valid one. It was a promoters’ agreement, binding upon them and good as an offer to the corporation, to become binding on the corporation upon its lawful acceptance of its benefits.

(Scadden Flat G. M. Co.

Scadden,

121 Cal. 33, [53 Pac. 440];

Nannizzi v. Caprile

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Synopsis

BRITTAIN, J.

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