Court Opinion

ID: 5392343
Source: CourtListenerOpinion
Date Created: 2022-01-08 09:56:05.394941+00
Date Added: 2024-06-11T08:30:18.822405
License: Public Domain

Cohn and Callahan, JJ.
(dissenting). While it is true that the effect of the judgment appealed from is to disregard various recitals and covenants in written agreements, such a result is not unusual or improper where the agreements are set aside on the ground of fraud.
In our opinion, there was sufficient evidence to warrant the findings by the trial court, which saw and heard the witnesses, that the assignment and agreement transferring the plaintiffs’ shares had been procured through false representations. We think that the testimony of the disinterested witnesses called by the plaintiffs as to what the defendants had told them, and the testimony of the defendants’ accountant with respect to a scheme to reduce the defendants’ taxes support the plaintiffs’ claim.
It might be more in accord with the equities of the case if all loans by defendant Freidus had priority over the plaintiffs’ interest as stockholders. The earlier advances were taken care of by the issuance of preferred stock, but not a later ‘ ‘ donation to surplus ” in the sum of $269,000 made after Freidus acquired the plaintiffs’ stock. We would, therefore, vote to modify the judgment so that as between the parties and their successors the defendant Freidus should be entitled to an additional priority of $269,000 over the rights of the plaintiffs as common stockholders. Otherwise we would affirm the judgment appealed from.
*676Peck, P. J., and Breitel, J., concur with Van Voorhis, J.; Cohn and Callahan, JJ., dissent and vote to modify the judgment, in opinion.
Judgment reversed, with costs to the appellants and the complaint dismissed; new findings are to he made in accordance with the opinion herein and contrary findings reversed. Settle order on notice.