Court Opinion

ID: 7172747
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:28:09.67264+00
Date Added: 2024-06-11T16:15:47.386761
License: Public Domain

On Rehearing.
By the WHOLE COURT.
DAWKINS, J.
Without going into a further discussion, here, we have concluded that *387all issues, other than the title to the 70 shares of stock transferred to defendant by the individual stockholders of the Uncle Sam Planting & Mfg. Company, have been properly disposed of in our former opinion and decree in this case. What we shall have to say applies, therefore, to the said 70 shares of stock only.
[10-12] The stock belonging to the individual stockholders was their property, as distinguished from the tangible assets of the corporation; and they were at liberty to sell, transfer, or deal with it as they saw fit. They now seek to interpose, as a defense to what would otherwise unquestionably have been a valid and binding agreement, the alleged incapacity of the transferee (Reynaud) on account of the fact that he was at the time receiver of the corporation with reference to whose stock he and the plaintiffs were dealing as individuals. As we have heretofore said, the transaction, at most, was voidable and not void. Jacob v. Uncle Sam Planting & Mfg. Co., 144 La. 1014, 81 South. 604. Plaintiffs chose to transfer to Reynaud in consideration of his agreement to furnish the financial means for operating the properties of the corporation and his valuable services, based upon long and successful experience in the sugar producing business, the stock now involved, and continued to receive the benefits arising therefrom for more than two years. Prom a condition of practical insolvency, he, during this time, converted it into a healthy going concern, with a large part of its debts discharged and some forty-odd thousand dollars in cash to be used in continuing operations and to apply upon its mortgage indebtedness.
It is true that during this time, Reynaud bore the technical relation of receiver to the corporation, but Jules J. Jacob, Jr., and the other stockholders knew this, and, notwithstanding the fact that they had also been advised of the limitations imposed upon him as such, continued to reap the reward of his efforts and services. In these circumstances, after such long acquiescence and ratification of the transaction which might otherwise have been avoided, they should not, in equity and good conscience, be permitted to escape the effects of the contract which they, as individuals, had made and which had been performed by the othdr side, gee authorities cited in Jacob v. Uncle Sam Pltg. & Mfg. Co., supra.
Por the reasons assigned, our former decree herein is amended so as to exclude from the order condemning defendant to reconvey the 750 shares of the capital stock of defendant corporation transferred by the contract of January 6, 1915, the 70 shares of said stock received thereunder from the individual stockholder or stockholder^, as distinguished from that received direct from the corporation, and as to which 70 shares the title of the said Reynaud is recognized and held valid. In all other respects, our said decree is reinstated and made final; defendant to pay all costs.
PROVOSTY, C. J., dissents as to the 70 individual shares.
LAND, J., dissents.
O’NIELL and St. PAUL, JJ„ dissent, and think the judgment appealed from should be affirmed.,