Opinion ID: 1153554
Heading Depth: 1
Heading Rank: 2

Heading: Organization of corporation. Subsequent purchase of stock by Baker. Original agreement between parties.

Text: Defendant Commercial Body Builders, Inc., (Commercial) was originally organized in August 1966 by defendants Charles Siler and his wife as a family corporation. Its purpose was to engage in the construction of truck bodies, lift gates, and related truck equipment  a business with which Siler was thoroughly familiar and experienced. About a year later, in 1967, at the suggestion of defendant Siler, plaintiff Baker invested $14,210 in the corporation. Baker was not familiar with the business, but was engaged in the insurance and real estate business. At that time an additional 100 shares of stock were issued and Baker and his wife became owners of 98 shares of the corporation's stock, while Siler and his wife retained ownership of 102 shares. [3] Baker also signed a promissory note for $5,000, payable to Siler, with no time specified for payment, but with payment to be made from the proceeds of future bonuses to be paid to employees, including Baker. [4] At the same time, Siler was elected president and his wife treasurer of the corporation, while Baker was elected vice-president and his wife secretary. Monthly salaries were also established, including a salary of $800 to Siler, $200 to his wife, and $100 to Baker. Siler, however, spent full time in the business and his wife worked approximately six hours each business day as bookkeeper, while it was agreed that Baker would spend one day each week at the office. At that time, however, he apparently devoted at least part of that day to the transaction of his insurance and real estate business. As stated by Baker, there was no formal understanding what he was to do for Commercial, but the monthly salary of $100 was used by him to pay off the mortgage loan by which he raised the money to purchase the stock. Shortly afterwards, a buy-sell agreement was prepared by Baker's attorney and was signed by the parties. By its terms, if either party desired to sell his stock he was required to first offer it to the other party at the same price as offered on the market or at the book value of said shares as computed by the accounting methods regularly recognized for the computation of book value of corporate stock, whichever is less.