Court Opinion

ID: 7948054
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:23:00.737539+00
Date Added: 2024-06-11T16:34:01.071773
License: Public Domain

Brooke, J.
(after stating the facts). We are of opinion that the bill does not state a case for equitable relief. All of the stock of the Couple-Gear-Freight-Wheel Company was fully paid and was issued by it to the trustee, Mr. Hyde, to be disposed of by him under the terms of the trust. - The preferred stock was to be sold by him as directed by the board of directors from time to time, and the common stock was to be turned over to the Holson Motor Patents Company in payment for the exclusive license, which, at the time of the organization, constituted the only assets the Couple-Gear-Freight-Wheel Company possessed, except $500 paid in for qualifying shares. It will therefore be noted that the Couple-Gear-Freight-Wheel Company had received value in full for all of its common stock at the time of its organization. It is true that it was contemplated that that common stock should be transferred by the trustee to the Holson Motor Patents Company only in amounts *530equal to the preferred stock sold by the trustee. But the beneficial ownership of said stock was under the contract at all times in the Holson Motor Patents Company. At the time of the sale of the $14,000 preferred stock, only $14,000 common stock in the hands of Mr. Hyde was issued, and $28,000 of the common stock theretofore issued under the terms of the trust to the Holson Motor Patents Company was used to make up the entire sum of $42,000 common stock. How this transaction could in any wise injure a stockholder in the Couple-Gear-Freight-Wheel Company we are unable to discern. It certainly could not injure the corporation itself, because from the moment of organization it had for a valuable consideration parted with its entire issue of common stock. It will be noted that complainants filed their bill, not as stockholders of the Holson Motor Patents Company, but as stockholders of the Couple-Gear-Freight-Wheel Company. But it is not apparent from the record that, even as stockholders in the Holson Motor Patents Company, they were injured, because the resolution authorizing the sale of the three shares of common stock with one share of preferred stock passed by the Holson Motor Patents Company recites that the 420 shares are to be taken from the individual interest of Melvin B. Church, and that he had consented thereto in writing. So far as the record discloses, Mr. Church was the holder of three-fifths of the entire stock of the Holson Motor Patents Company, and his interest was ample to protect his undertaking.
We are of opinion that it is unnecessary to determine whether the contract by which the Holson Motor Patents Company agreed to take stock in the Couple-Gear-Freight-Wheel Company in payment for the exclusive license was legal or not. It is enough to determine that neither the trustee in selling, nor the individual defendants in buying, nor the Holson Motor *531Patents Company in consenting to the transaction, did anything which could, in our opinion, afford complainants any ground for legal or equitable relief.
The order sustaining the demurrer and dismissing complainants’ bill is affirmed.
McAlvay, C. J., and Kuhn> Stone, Ostrander, Bird, Moore, and Steere, JJ., concurred.