Morris v. McKesson

NCURSE, J.

Plaintiff sued for the rescission of a written contract upon the ground that the consideration as to him had failed. The cause was tried before the court sitting without a jury and resulted in findings and judgment in favor of the defendant. Plaintiff has appealed upon a typewritten record. The whole attack upon the judgment is based upon the ground that the evidence is insufficient to support it.

[376]

On May 15, 1923, the parties entered into a written contract agreeing to form a corporation for the purpose of conducting a furniture jobbing business, together with a “chair finishing plant.” The respondent was at the time engaged in the furniture jobbing business, the goodwill of which he agreed to turn into the new corporation in consideration of $5,000 in stock of the new corporation to be issued to him. This business it was agreed should be continued in the new corporation as the parties deemed advisable. The portions of the agreement of interest in this litigation read:

“In consideration of the foregoing and to promote new business and to continue the business already started it is understood that you are to at once cash in your securities, sufficient to invest between nine thousand ($9,000.00) dollars and ten thousand ($10,000.00) dollars available June 30th, 1923.

“It being our purpose in mind to create and develop a chair finishing plant it is understood that

this new business

will come under your direct supervision and also to help promote the sale of chairs or any other part of the business.

“It is understood and agreed that you are to receive the salary of $250.00 per month for the balance of year.

“It is understood that in the new corporation I am to hold the position of president of the corporation and general manager and that you will hold the office of secretary and treasurer or vice-president and secretary

which ever seems to be the best arrangement.”

(Emphasis ours.)

The corporation was organized in due time and the appellant was elected one of a board of five directors, the other four having been selected by the respondent. This board met in due order and adopted by-laws and filled the corporate offices designated therein. Article 10 of these by-laws provided that a depository should be selected in lieu of a treasurer and this arrangement was assented to by the appellant and the by-laws were signed by him and the other directors. Some time thereafter the appellant paid into the corporation the sum of $9,100, for which stock was issued to him and he continued to serve in the office of vice-president and director of the corporation to which he had been elected at the original meeting. In the latter part of the year 1923 he suggested to the respondent that the