Court Opinion

ID: 9736905
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:09:30.034515+00
Date Added: 2024-06-11T07:23:55.258504
License: Public Domain

DRAPER, P. J.
I concur in the judgment.
I would, however, base the decision upon the special facts doctrine.
Defendant Halbert, as president and chairman of the board, was the effective operating head of the corporation, completely controlling the conduct of its business. With his undisputed power over his wife’s shares, he controlled 53 percent of the corporation’s voting stock. This combined control of operations and of voting power goes to show him to be a fiduciary as to the minority shareholders. The special facts which establish this fiduciary capacity and show a breach of his trust consist of his refusal to consider an offer for the corporate assets as a whole, his affirmative effort to persuade minority shareholders to sell for far less than book value, his agreement to secure the necessary resignations to facilitate prompt transfer of operating control, his knowledge of the buyer’s plan to withhold dividends and thus depreciate the value of the minority shares, his opening of the company’s books to the prospective purchaser, and his concealment of all these facts from the minority stockholders. All these facts are established by uncontradicted evidence. It follows that the court’s finding (the jury verdict was but advisory) was unsupported by the evidence and that the liability of defendants is established as a matter of law. This case seems to me to fall within the *274rule of Low v. Wheeler, 207 Cal.App.2d 477 [25 Cal.Rptr. 538], or, at most, to require but a moderate and reasonable extension of that rule. Henee I would base the decision upon the special facts doctrine as applied in Low.
On April 25, 1969, the opinion was modified to read as printed above.