Chrisman v. Avil's, Inc.

80 Pa. D. & C. 395, 1952 Pa. Dist. & Cnty. Dec. LEXIS 219
CourtPennsylvania Court of Common Pleas, Delaware County
DecidedFebruary 1, 1952
Docketno. 884
StatusPublished

This text of 80 Pa. D. & C. 395 (Chrisman v. Avil's, Inc.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Delaware County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chrisman v. Avil's, Inc., 80 Pa. D. & C. 395, 1952 Pa. Dist. & Cnty. Dec. LEXIS 219 (Pa. Super. Ct. 1952).

Opinion

Ervin, P. J.,

— This was a bill in equity to restrain Elizabeth Chrisman Avil from vot[396]*396ing or transferring 28 shares of the stock of defendant corporation and restraining the corporation and the other defendants from recognizing any transfer of said stock and for a decree directing Elizabeth Chrisman Avil to return the certificate of stock for cancellation. The bill was filed by Cecelia F. Chrisman, who alleged that she was one of the stockholders of defendant corporation; that on or about July 19,-1951, defendants, J. Thornton Avil and Philip W. Hunt, in an illegal and unlawful attempt to gain control of the corporation, illegally and unlawfully held a directors’ meeting, at which meeting they discharged George A. Chris-man as president and treasurer of the corporation, elected defendant, J. Thornton Avil, as president and treasurer of the corporation, broke an employment contract between the corporation and George A. Chris-man, and directed the issuance and sale of 28 shares of stock to defendant, Elizabeth Chrisman Avil; that the action of defendants in issuing said stock was illegal because it violates section 47 of the bylaws of the corporation, because only 24 hours’ notice of the directors’ meeting was given to George A. Chrisman; because the meeting was not called in accordance with section 23 of the bylaws, because notice of the meeting was not served upon George A. Chrisman in accordance with the bylaws, because the directors, under the bylaws, have ho right to remove an officer without proper legal cause; because defendant, J. Thornton Avil, not having been legally elected president, acted illegally in issuing said certificate; because the directors had no right to issue such stock at this time, because such meeting constituted an illegal and inequitable attempt by two directors, as minority stockholders of the corporation, to seize control of the corporation, and because the issuance of the stock was in violation of an agreement between the stockholders. Accompanying the bill were, injunction affidavits alleg[397]*397ing that irreparable harm would result to plaintiff and to George A. Chrisman if the injunction sought was not granted. Accordingly, a preliminary injunction was issued upon security entered by plaintiff in the sum of $300, which security was duly entered.

On July 27,1951, individual defendants filed a petition alleging that George A. Chrisman was a necessary party in interest and praying that he be joined as a party plaintiff, which prayer was allowed and a proper order issued on the game day. Also on July 27, 1951, all defendants filed an answer to plaintiff’s bill of complaint, which denied that the action of defendants in issuing stock to Elizabeth Chrisman Avil was illegal and averring that it was properly issued at a regular meeting at which a quorum was present for the legitimate corporate purpose of improving the working capital and liquid position of the corporation and/or to reduce its indebtedness. Defendants also filed new matter, alleging that J. Thornton Avil had been duly elected president and treasurer of the corporation ; that, although George A. Chrisman was duly informed of the action taken by the board, he has since that time persisted in holding himself out as president of Avil’s, Inc., and prayed for an injunction enjoining George A. Chrisman from acting as president or in interfering with the management and operation of the corporation by J. Thornton Avil. Accordingly, a preliminary injunction was issued upon security entered by the defendants in the sum of $300, which security was duly entered.

Hearings were held before Ervin, P. J., on July 30, 1951, August 2,1951, and August 14,1951. On August 28, 1951, both preliminary injunctions were continued until further order of the court. Further hearings were held before Ervin, P. J., on September 26, 1951, and on January 4,1952. At the conclusion of the testimony it was agreed that the testimony taken on the [398]*398preliminary injunctions is to be made a part of the record and used as if it were given in the final hearing.

From the testimony, exhibits and requests we make the following

Findings of Fact

1. Prior to October 3,1945, there existed a cleaning and dyeing business under the name of J. Thornton Avil, George A. Chrisman and Philip W. Hunt, trading as AviFs Cleaners & Dyers, with Cecelia F. Chris-man as a limited partner.

2. On October 3, 1945, a corporation, AviFs, Inc., one of the defendants herein, was incorporated under the laws of the Commonwealth of Pennsylvania with an authorized capital of $100,000, divided into 1,000 shares of the par value of $100 each.

3. At the first meeting of the directors of AviFs, Inc., held on December 13, 1945, it was adjudged that the fair value of the assets, business and good will of AviFs Cleaners & Dyers was $65,100 and necessary for the business of the corporation. Accordingly, the property was purchased by the corporation by the issuance of full paid capital stock of the corporation in the aggregate amount of $61,100 and a note of the corporation to the order of Cecelia F. Chrisman in the sum of $4,000, payable within two years from the date thereof, with interest at six percent per annum.

4. A total of 611 shares of capital stock was issued as follows: Cecelia F. Chrisman, 60 shares; J. Thornton Avil, 248 sharés; Philip W. Hunt, 55 shares, and George A. Chrisman, 248 shares.

5. The stock was issued in the amounts stated in return for the proportionate interest held by the same parties in the partnership.

6. The original directors of the corporation were George A. Chrisman, J. Thornton Avil and Philip W. Hunt. The original officers of the corporation were [399]*399George A. Chrisman, president and treasurer; J. Thornton Avil, vice president, and Philip W. Hunt, secretary. . . .

25. On January 30, 1951, at 5:45 p.m., J. Thornton Avil and Philip W. Hunt personally delivered to George A. Chrisman a written notice of a special meeting of the board of directors to be held on January 31,1951, at 8 p.m.

26. On January 31, 1951, the special meeting of the board of directors was held. George A. Chrisman did not attend. The remaining directors, J. Thornton Avil and Philip W. Hunt, adopted a resolution reciting that George A. Chrisman had “illegally and without authority” withdrawn funds from the working capital and that “no restitution or satisfactory explanation” had been made and therefore removed George A. Chris-man from the offices of president and treasurer of AviPs, Inc. J. Thornton Avil, having resigned as vice president, was thereupon elected president and treasurer. Bylaw no. 10 was amended to require that shares he owned for only three days would entitle the owner to vote at elections for directors instead of the 20 days previously required. Other business was transacted which is not material to this case.

27. During the following month conferences were held by the interested parties and their attorneys and as a result another special meeting of the board of directors was held on February 28, 1951, which was attended by J. Thornton Avil, George A. Chrisman and Philip W. Hunt. The following actions were taken: The treasurer was directed to pay to J. Thornton Avil accrued salary in the sum of $3,000 to equalize the accrued salary previously taken by George A. Chrisman; Chrisman was elected as president and treasurer, Avil was elected as first vice president and Wm. H.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Glenn v. Kittanning Brewing Co.
103 A. 340 (Supreme Court of Pennsylvania, 1918)

Cite This Page — Counsel Stack

Bluebook (online)
80 Pa. D. & C. 395, 1952 Pa. Dist. & Cnty. Dec. LEXIS 219, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chrisman-v-avils-inc-pactcompldelawa-1952.