Court Opinion

ID: 9528121
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:37:15.620362+00
Date Added: 2024-06-11T13:26:30.717073
License: Public Domain

MOORE, P. J.
I concur in all that is said by Justice Wilson. However, the implied concession that the special demurrer might have merit invites my protest. This appeal presents a classic illustration of the law’s delays. The amended complaint sets forth facts which should jar the conscience of even the accused persons, yet they contend with a bold disdain that the pleading is wholly inadequate and follow with a series of hypertechnical special demurrers, the majority of which are wholly without merit. Inasmuch as the judge who sustained the objection to all evidence effectually overruled the order of his colleague who had theretofore in the “Writs and Receivers” department overruled all demurrers including the special as well as the general, future proceedings might be simplified by a few observations upon the criticisms of the amended complaint.
With reference to paragraph III, defendants say it is uncertain how plaintiff could have an option on the land while the option was in the name of the Merit Finance Corporation. The very same paragraph alleges that such corporation is wholly owned by plaintiff. The same is true with reference to the alleged uncertainty as to how plaintiff could have priorities in the name of the same corporation. As to the attack upon paragraph IV, the phrase “certain priorities for various construction materials etc.,” has a meaning in the law which was comprehended by defendants who accepted such priorities as a part of the consideration for their investment.
Referring to the criticism of paragraph V, as to “how a third of the capital stock . . . would be issued to plaintiff if plaintiff were to receive only one-third of the profit of the transaction, and not to receive one-third of the capital invested,” the pleading alleged that it was agreed that stock in defendant corporation would be issued forthwith, after incorporation, to plaintiff, Koch and Spiegelman in equal shares, *187and that regardless of the number of the shares issued, profits and voting power would be equally shared and divided “one-third each among” the contracting parties. The criticism as to whether an application was made to the Corporation Commissioner for a permit for plaintiff to issue one-third of the capital stock or was ever granted to the corporation is to disregard the law. It is presumed that defendants had performed their legal duty by obtaining a permit from the Corporation Commissioner for the issuance of the corporate shares. The criticism that permission was never sought or granted for the commissioner to authorize the corporation to give plaintiff one-third of the profits and one-third of the voting power is immaterial. Under the contract defendant corporation became an agency of the three contracting parties, and by the terms of their agreement the corporation was authorized to divide the profits among the three organizers who were and are its only shareholders. The point that if the title to the property was vested in the corporation how the corporation would not share in the profits is answered by the fact that the corporation was nothing more than an instrumentality of the three organizers. The criticism that the commissioner did not give his permission to the corporation to conduct its business as described is without basis for the reason that the commissioner’s authorization is not essential to the validity of corporate acts, except that it is necessary only to authorize the issuance of securities and to require a corporation to comply with the terms of its permit.
The criticism that the pleading does not allege the cost of 30 three-bedroom houses does not take into account the terms of the contract whereby such cost is to be determined by the three contracting parties of which defendants constituted a majority. The criticism that the pleading does not allege who would determine whether it would be permissible to sell the houses for $10,000 each is answered by the allegations of the pleading that “voting power would be equally shared among the three contracting parties.” The criticism that the phrase “approximately $10,000 each” has no certain meaning is answered by the fact that the ability to sell a house at any price had to be determined by the same three as contracting parties or as directors of the corporation, the defendants Koch and Spiegelman constituting the control thereof. The criticism that the pleading does not disclose how much capital Koch and Spiegelman would be obliged to *188contribute and whether it would be contributed or loaned is answered by the allegation that those defendants “would contribute as capital to Hillman Land Company in equal shares of one half each the money required for such development . . . and that the profits and voting control . . . would be equally divided one-third each among plaintiff, Eoeh and Spiegelman.” Defendants know that capital is always contributed, not loaned. If money is loaned to a corporation a debt is thereby created.
The criticism of paragraph YII that the pleading does not allege how many years land purchased by the corporation would be subject to the oral agreement is answered by the pleaded facts that a corporation was organized, that it presumptively kept a record of its acts, and that the oral agreement of the parties would be evidenced by corporate records. The criticism that the pleading does not allege who would decide what land would be purchased or how it would be improved is answered by the pleading and by the law that all decisions of the corporation would be made by a majority of the directors.
The criticism that paragraph IX does not allege what land is referred to is answered by the phrase “said property,” which can have reference to no property other than the property acquired by defendant corporation.
The criticism of paragraph XIII, that the meaning of the clause “that the land would be subdivided into about 48 separate lots,” is answered by the allegations that the tract would be subdivided, requiring streets to be laid out. The necessary inference from such a covenant is that the exact number of lots had not been computed, leaving a margin of freedom of judgment for those who should make final decision. But it is patent that whatever determination should be reached upon such a matter would be derived by at least two of the contracting parties. The same is true with reference to the criticism that the “type” of streets, sewers and other utilities is not alleged or the cost or. size or quality of construction of the 48 separate dwellings.
The foregoing will serve to illustrate the nature of the demurrer for want of uncertainty which continues similarly as to the remaining paragraphs of the pleading. In granting a nonsuit the court below did not rule upon the special demurrer. The foregoing is the first judicial comment of record upon its merits. Because the trial court entertained the *189opinion that plaintiff’s cause, though meritorious, should be attempted on some other theory or at least in a different action, the general demurrer was sustained by the process of excluding all evidence. If plaintiff’s facts entitled him to relief he should not thus be expelled by a chancellor whose sacred duty is to see that the “king’s subjects” are not turned away if the bill by which the litigant comes may be so framed as to warrant relief in equity. Justice delayed is justice denied. Plaintiff’s pleading outlined a series of events whereby it appears that he was in possession of options to purchase desirable lands for subdivision and development for profit. Also, he had acquired priorities for the essential building materials. These were valuable property rights which by plaintiff’s agreement with Koch and Spiegelman they acknowledged and of which, by the contract, they obtained control. They then ruthlessly excluded him from participation in the ownership of his own valuable property and its increment. To allow such conduct to go unrestrained by necessitating long delays incident to an appeal is to give encouragement to the actor with the stronger hand.