Barrett v. Avon Garage Co.

66 Pa. D. & C. 275, 1948 Pa. Dist. & Cnty. Dec. LEXIS 79
CourtPennsylvania Court of Common Pleas, Philadelphia County
DecidedJune 25, 1948
Docketno. 2051
StatusPublished

This text of 66 Pa. D. & C. 275 (Barrett v. Avon Garage Co.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Barrett v. Avon Garage Co., 66 Pa. D. & C. 275, 1948 Pa. Dist. & Cnty. Dec. LEXIS 79 (Pa. Super. Ct. 1948).

Opinion

Smith, P. J.,

Harry A. Barrett brings a bill of complaint against defendants, praying that Kathryn Barrett, Helen McCauley, Marion Barrett, Mary Worstall and the Avon Garage Company, a Pennsylvania corporation, be enjoined from discharging Harry A. Barrett as active manager of the Avon Garage Company under the terms of certain trust agreements dated May 13,1946, and August 29,1946, and that the officers and directors of Avon Garage Company be directed to reinstate plaintiff as active manager; that defendants, Kathryn Barrett, Helen Mc-Cauley, Marion Barrett, Mary Worstall and Avon Garage Company be ordered to carry out the terms of the trust agreements of May 13, 1946, and August 29, 1946, for the benefit of life tenant, Catherine Dougherty, and that said defendants be restrained and enjoined from interfering with the management and operation of Avon Garage Company by plaintiff, Harry A. Barrett, as required to carry out the purpose of the trust created for the benefit of life tenant, Catherine Dougherty, and for a receiver of the said corporation.

Findings of Fact

1. Patrick F. Loy and William J. Dougherty were partners in the operation of Avon Garage Company until the death of Patrick F. Loy on May 17, 1943, after which Loy’s legal representative, Peter M. Lynch, associated himself in the said business with William J. Dougherty until the death of the latter on July 11, 1943.

2. On March 18,1946, the said business as operated by the executors of the estates of Loy and Dougherty was dissolved by decree of Fenerty, J., and distribution [277]*277of the net assets was divided equally between the two said estates.

3. Under the will of William J. Dougherty, his residuary estate was placed in trust for the purpose of paying his sister, Catherine Dougherty, a sum of not less than $30 per week during her natural life out of the principal and income, and upon her death, the corpus of the estate was to be distributed as follows: 70 percent to be divided equally among Kathryn Barrett, Helen McCauley and Mary Felt; 25 percent to be divided equally between Harry A. Barrett and Marion Barrett, and 5 percent to Mary Worstall.

4. On May 13, 1946, Catherine Dougherty, life tenant under said trust, released and disclaimed her interest in the life estate in favor of the remaindermen and by agreement, executed simultaneously, all the parties in interest agreed to purchase the said Avon Garage, the extent of their ownership to be in the same proportion as in the residuary estate of the said William J. Dougherty and further agreed that the premises occupied by the garage and the business were to be held in trust for the benefit of the said Catherine Dougherty, who was to receive payments from the said trust as income to her in accordance with the provisions of the will of the said William J. Dougherty.

5. The trust agreement provided that the trust would terminate upon the death of Catherine Dougherty and that each of the other parties in interest was to own his or her share in the business outright.

6. John J. Connell, the trustee nominated in the agreement of May 13, 1946, failed and refused to accept the trusteeship.

7. On July 26, 1946, the Avon Garage was, purchased in accordance with the agreement of May 13, 1946, and on August 29, 1946, Catherine Dougherty as one party and Kathryn Barrett, Helen McCauley, Marion Barrett, Harry A. Barrett and Mary Worstall [278]*278as the other parties, entered into an agreement in writing as of July 26, 1946, to incorporate the business as Avon Garage Company, a Pennsylvania corporation, and to distribute the shares to the remaindermen as under the old trust in accordance with the extent of their respective interests in the residuary estate of the said William J. Dougherty.

8. This agreement also provided that in consideration of the release by Catherine Dougherty of her interest in the trust estate created by the will of William J. Dougherty, the parties agreed to pay her the sum of $100 per week for life which sum she was to receive as president of the said corporation.

9. In the agreement it was provided that Harry A. Barrett “shall be the active manager of the said business”.

10. The interest of Mary Felt under said will was purchased from her by the other remaindermen.

11. The parties to the said agreement of August 29, 1946 (as of July 26,1946), including Catherine Dougherty, agreed upon five directors for the proposed corporation, one of whom was Harry A. Barrett.

12. The parties also agreed upon certain officers for the proposed corporation with Catherine Dougherty as president at a salary of $100 per week to be charged against the operation expenses during her lifetime (“providing the corporation owns and operates the business during that period”) in consideration of her disclaiming her interest in the trust estate in favor of the remaindermen of the estate of William J. Dougherty, deceased.

13. Hárry A. Barrett was designated as the secretary and treasurer of the proposed corporation.

14. At the first meeting of the shareholders of Avon Garage Company, a corporation, on September 4,1946, of which Harry A. Barrett acted as chairman, a board [279]*279of directors was elected pursuant to the agreement, one of whom was Harry A. Barrett.

15. At the first meeting of the board of directors, of which Harry A. Barrett was chairman, he was duly elected secretary and treasurer of the corporation and was employed as general manager of the corporation under the following resolution:

“Resolved, That Harry A. Barrett be employed as General Manager of this Corporation at a salary which, after deductions for Federal Withholding Tax, Social Security, Philadelphia Wage Tax, etc. will net him $50.00 per week.”

16. Harry A. Barrett acted as manager of the Avon Garage Company from July 26, 1946, until September 17, 1947, at which time his employment as manager was terminated as a result of a resolution of the stockholders and board of directors of the said corporation on September 2, 1947, giving him two weeks’ notice with pay.

17. Harry A. Barrett had full and adequate notice of these meetings but failed to attend them.

18. Harry A. Barrett was not the trustee of Avon Garage Company.

19. Harry A. Barrett was not the trustee for Catherine Dougherty.

20. The directors of Avon Garage Company, a corporation, had power and authority to terminate the services of Harry A. Barrett as manager of Avon Garage Company.

Discussion

There is no doubt that the directors of Avon Garage Company had a legal right to discharge Harry A. Barrett as manager of Avon Garage Company as well as just cause, if just cause need be shown. There is no evidence which shows that he insisted upon maintaining a position that he was trustee. If he had assumed [280]*280such trust, all shares of stock would have been issued to him qua-trustee. On the contrary, he acquiesced in the issuance of shares of stock to the other remaindermen of the estate of William J. Dougherty, including himself. He also joined in his election as secretary and treasurer of the corporation by a board of directors of the corporation elected by the individual shareholders of which meeting he was chairman. He also acted as the chairman of the board of directors when he was employed as “General Manager” at a designated salary.

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Related

Russell v. Baughman
94 Pa. 400 (Supreme Court of Pennsylvania, 1880)
Chandler v. Chandler
69 A. 806 (Supreme Court of Pennsylvania, 1908)

Cite This Page — Counsel Stack

Bluebook (online)
66 Pa. D. & C. 275, 1948 Pa. Dist. & Cnty. Dec. LEXIS 79, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barrett-v-avon-garage-co-pactcomplphilad-1948.