Court Opinion

ID: 5226371
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:45:45.865603+00
Date Added: 2024-06-11T08:27:35.905489
License: Public Domain

Ingraham, P. J. (concurring in part):
I concur with Mr. Justice Clarke in his opinion so far as it affects the additional sums of money which the trustees voted to' themselves over and above the regular salaries that had been paid prior to the time that the increases were allowed, but I do not concur in the conclusion to which he arrives in regard to the good will of the Crandall & Godley Company.
After William D. Godley became ill and incapacitated in May, 1895, the entire management and control of the company devolved upon Lyman F. Pettee, who seems to have been the *715controlling manager of the corporation from that time until the company discontinued business in consequence of the destruction of its plant by fire. Before that time Lyman F. Pettee had become seriously ill, and for some time prior to the fire had been unable to devote very much time to the business of the company. So far as appears there was no one representing the plaintiff’s interest in the company who had the capacity or was ablé to take charge of rehabilitating the company and continuing its business after its plant and property had been destroyed. Lyman F. Pettee was unable by reason of the condition of his health to continue the business, and he died about a year afterwards. There was no obligation upon his sons, who would succeed to his property after his death, as they were not officers of the company and were under no obligation as trustees or otherwise to continue the business. The company had a large amount of assets, which included the insurance on the property destroyed by the fire. But it appeared that after Lyman F. Pettee had been unable to devote his time and ability to the service of the company the business had ceased to be profitable, and the year before the fire the business was conducted at a loss of upwards of $8,000 instead of the large profit that had been made prior to that time I do not think that the determination of the directors of this company to discontinue the business was fraudulent or imposed upon them any liability. In fact, as I read this record, they neither had the ability nor the means to reconstruct the plant and continue the business. It was their duty, however, to wind up the affairs of the company to the best interest of the stockholders, and undoubtedly the good will of the business was an asset that should have been disposed of for the benefit of the stockholders. Nor do I think that the act of the son of Lyman F. Pettee and his associates, who organized the Crandall-Pettee Company and started the business, made them liable to the plaintiff or to the Crandall & Godley Company for the organization of that company or for their acts in obtaining so far as they could the customers of the Crandall & Godley Company. They were under no fiduciary obligation to the plaintiff or to the Crandall & Godley Company, and I do not think the evidence sustains the conclusion that Lyman F. Pettee, considering the condi*716tion of. his health at the time, was an actual participant in the organization of that company, or was guilty of any fraud which would impose upon his estate a liability for whatever of the good will of the Crandall & Godley Company was secured by. the Crandall-Pettee Company. The charge is that the (directors of the Crandall & Godley Company permitted the Crandall-Pettee Company, to conduct this business, in such a way that; it secured a. large portion of the business of the Crandall & Godley Company. Just what this “ permitting ” means, or. why it should.. impose a liability upon the directors of the Crandall & Godley Company, I do not understand. What else, could these directors do % They certainly could not prevent the Crandall-Pettee Company from doing business or •from selling to the customers of the Crandall & Godley Company who wished to deal with the new corporation. ' The situation was peculiar. Lyman P. Pettee had been the controlling influence in the management of the Crandall & Godley Company, and it was under his. management and control that .the .company for years had been able to conduct a profitable business. He was incapacitated from further work. The fire had destroyed the business of the company as a going business, and it could not continue without a reconstruction of its plant and a reorganization of its business. It seems to me that it * had nothing to do but to discontinue business. It is true that the directors could have applied to have the corporation dis- • solved, have a receiver appointed, and it may be sell the good will of the business conducted by the corporation with its other assets which did not consist of money, but these directors .represented a very Small portion of the capital stock of the corporation, and if the plaintiff had .wished to accomplish such- a ¡result she could have commenced at once, the proper action for that purpose, but there is. nothing in the record, as I view it, to show that the Grandall-Pettee Company actually acquired the good .will of the Crandall & Godley Company. It did not purport to have acquired such good will, and while it seems to have appropriated or used certain of the trade marks of the company and. for a short time property that had been saved from destruction by the fire, the good will of the business as a going business was never, as I read this testimony, actually *717appropriated by the Crandall & Godley Company, and I think it entirely unjust to charge the directors of the Crandall & Godley Company or the Crandall-Pettee Company and its organizers with the value of the good will of the Crandall & Godley Company as a going concern.
I, therefore, dissent from the determination to affirm so much of the judgment as in this action imposes upon any of the defendants a liability for what the court finds was the value of the good will of the Crandall & Godley Company.
McLaughlin, J., concurred.