Cunningham v. Schmitz

DORAN, J. The plaintiff, as assignee of cross-defendant,

M. G. Mason, instituted this action to recover 6,000 shares of capital stock of Amerieol Petroleum, Inc. Respondents filed a cross-complaint against Cunningham and Mason, and others, seeking to be adjudged the owners of such stock and to compel the transfer of such shares on the books of the company. Subsequent to the transactions between the parties hereinafter set forth, the stock was split ten for one.

The trial court found that “on or about June 8, 1950, . . . M. G. Mason approached the defendants and cross-complainants and offered to sell them 6,000 shares of the capital stock . . . for the sum of twenty-five hundred dollars ($2500.00). At said time and place the cross-complainants (Schmitz) agreed to and did accept the offer made by M. G. Mason. On the same day the said Mason certified that he was the owner of certificate No. 12 of Amerieol Petroleum, Inc. for [568]six thousand shares fully paid and nonassessable. At said time and place the said Mason sold, assigned and delivered said certificate ... in words as follows: ‘For value received I hereby sell, assign and transfer unto Carl W. Schmitz and Dolly Schmitz, six thousand shares of the capital stock, represented by the within certificate and do hereby irrevocably constitute and appoint-attorney to transfer the said stock on the books of the within named corporation, with full power of substitution in the premises. ’ ’

It was further found that Dolly Schmitz thereafter delivered the stock certificate to the secretary of the corporation for exchange after the ten to one split; that the secretary forwarded the stock to the company’s transfer agent; that thereafter Mason, who was a vice-president and managing director, “caused said certificate to be made valueless by stamping on both sides thereof in large, bold letters, the word ‘cancelled’ accompanied by the initials M. G. M. Further, the said Mason refused to allow the transfer agent to exchange or transfer said certificate on the books of said company.” The court then found that the cross-complainants Schmitz were the owners of the stock and “entitled to have said certificate exchanged for sixty thousand shares of said corporation, and so recorded on the books. ’ ’ Cunningham and Mason have appealed from the judgment.

It is appellants’ contention that the court below erred in affording equitable relief to the defendants on the cross-complaint under the maxim “he who seeks equity must do equity”; and that the judgment “should be reversed on the ground that the credible evidence supported a judgment for the plaintiff.”