Botchford v. Alt

WOOD (Parker), J. Plaintiff commenced this action to quiet title to one-third the shares of certain corporate stock to which defendant held legal title. The court sustained defendant’s demurrer to the complaint, and plaintiff filed an amended complaint. Defendant demurred to the amended complaint, and the court sustained the demurrer and gave plaintiff ten days within which to amend. Plaintiff is appealing from an order and a judgment of dismissal rendered after she had failed to amend within said time.

It was alleged in the amended complaint that D. H. Botch-ford and the plaintiff were husband and wife for many years, and that a final decree of divorce was granted to plaintiff in 1929. A part of the final decree of divorce was set forth in the amended complaint, and in that part of the decree it was ordered that D. H. Botchford comply with the terms of an agreement between plaintiff and D. H. Botchford, dated November 26, 1924, and an amendatory agreement between said parties, dated May 17, 1928, and in particular it was ordered that D. H. Botchford pay to plaintiff one-third of [342]the gross salary and compensation or emoluments received by him. The amended complaint alleged further in substance that copies of said agreements were attached to the amended complaint and were made a part thereof; that in 1935 and 1936 the Rich Manufacturing Company, a corporation, “was in a precarious financial condition and was indebted to the Security-First National Bank of Los Angeles in the sum of approximately $375,000.00”; that as collateral security it pledged to said bank 12,143 “out of the 13,000” shares of its capital stock; that about January, 1936, said bank foreclosed the pledge and purchased the shares; that about 1935 said bank installed Botchford as general manager of the Rich Manufacturing Company at a salary of approximately $600 per month; that about May 27, 1936, the bank sold said 12,143 shares of stock to Botchford for $5,000; that $5,000 was “an inadequate consideration for the purchase of said 12,143 shares . of stock and was in truth and fact a means to adequately compensate David Herbert Botchford for his ability and experience and his efforts to rehabilitate the Rich Manufacturing Company” (apparently it was intended to state that the transfer of the shares was a means to adequately compensate David Botchford); that the transfer of said shares constituted the receipt of compensation and earnings within the meaning of the two agreements (above mentioned) and the final decree of divorce; that Botchford died about July 29, 1941; that at all times prior to his death he represented to plaintiff that the title to said 12,143 shares of stock was held by Security-First National Bank, and there was “no way that said stock or any portion thereof' or interest therein could be transferred to plaintiff”; that prior to his death he transferred and sold 10,943 of the said shares to defendant Alt, and said shares are represented by certificate numbers 143,146,147 and 148 issued to defendant; that defendant was employed by the Rich■ Manufacturing Company “at all times subsequent to 1935” and was under the supervision of Botch-ford; that defendant was familiar with the property agreements (above referred to), the judgment of divorce, plaintiff’s claim to “% interest in and to” said 12,143 shares of stock, and with Botchford’s representations “as to the title of said stock”; that defendant was not a bona fide purchaser of said 10,943 shares of stock; that plaintiff is the owner of one-third of said 10,943 shares of stock and that defendant’s claim thereto is without right.