Court Opinion

ID: 7336017
Source: CourtListenerOpinion
Date Created: 2022-07-25 22:57:21.002524+00
Date Added: 2024-06-11T16:20:13.003279
License: Public Domain

PATTERSON, J.
This is an appeal from an order continuing, pending suit, an injunction by which the defendants were restrained from selling or disposing of certain shares of stock of the J. M. Gunst Disinfecting Company, and from voting upon any of said shares of stock. It was made to appear to the court below that in January, 1896, this plaintiff and one Williams owned 260 of the 500 shares of the capital stock of the Gunst Company, and that on the 17th of that month they entered into an agreement under seal with the defendant Goldstein, by the terms of which they were to transfer to him (and they did so transfer) 255 of those shares, Gold-stein stipulating that he would not sell or dispose of such stock without the written consent of. both Weston and Williams. It was further agreed that if Goldstein should sell or dispose of the shares, or any portion thereof, he would pay over to Weston and Williams 75 per cent, of the sum realized on. such sale, and that Weston and Williams should be interested to the extent of 75 per cent, in any and all dividends declared or paid on such shares. It seems that, some time in January, 1899, Williams assigned all of his interest in the stock to the plaintiff. On the execution of the contract under seal, above mentioned, the 255 shares of stock were transferred on the books of the company from the names of Weston and Williams to the name of the defendant Goldstein. On the 6th of January, 1899, or about that time, Goldstein, in violation of his agreement, and without having procured the assent of the plaintiff or of Williams, transferred the 255 shares from himself to his sister, the defendant Schleimer; and it is alleged in the complaint that this scheme was a fraudulent device to destroy the interest of the plaintiff in the shares and in the company, and to get control of the company, the *312255 shares being a majority. The essential facts upon which the order of injunction was granted appear in affidavits of the plaintiff and of one Gunst, who was the president of the company.
That the injunction is not too broad in its scope, if it were properly granted, is manifest. If the defendants are allowed to dispose of this stock, or, by voting upon it, put the company in the control of others, in violation and fraud of the plaintiff’s right, a final judg-. ment would be of little use. The present status should be maintained until the trial and decision of the cause. The only subject requiring consideration relates to the manner and form in which the essential facts were presented to the judge when the injunction was issued. It is claimed that the material allegations are made only on information and belief. If that is so, the injunction should not have been granted. But it is not so. The agreement under which Goldstein became possessed of the shares appears in this record. That he parted with them contrary to the terms of that agreement, namely, without the consent of either the plaintiff or Williams, is sworn to positively. That his act in so parting with them was a breach of that agreement, and of his trust relation to the plaintiff, and in which he held the shares, follows as a necessary consequence. The transfer of the shares from Goldstein to his sister is sworn to positively, and is admitted. When the agreement of January, 1896, was made, Goldstein was the secretary and treasurer of the company, with a salary of $20 a week, and owned no stock. The case thus presented entitled the plaintiff to an injunction against Goldstein. As to the defendant Schleimer, she became the transferee of these shares of stock, which Goldstein had no right to dispose of. They are traced into her hands under circumstances which induced the court below to believe that her title might be successfully impeached, and was merely colorable. We see no reason to differ with that court in that view of the case.
The order appealed from should be affirmed, with $10 costs and disbursements. All concur.