Pettit v. Forsyth

113 P. 892, 15 Cal. App. 149, 1910 Cal. App. LEXIS 2
CourtCalifornia Court of Appeal
DecidedDecember 31, 1910
DocketCiv. No. 696.
StatusPublished
Cited by4 cases

This text of 113 P. 892 (Pettit v. Forsyth) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pettit v. Forsyth, 113 P. 892, 15 Cal. App. 149, 1910 Cal. App. LEXIS 2 (Cal. Ct. App. 1910).

Opinion

THE COURT.

This case is here on appeal from the judgment, on the verdict of a jury, in plaintiff’s favor, and from the order denying defendant’s motion for a new trial. A general and special demurrer to the complaint was interposed and overruled, which gives rise to the principal questions now before us and calls for a sufficiently full statement of the pleading thus attacked.

The complaint sets forth that on December 31, 1895, defendant, “as party of the first part, and plaintiff and one John D. Sprower, as parties of the second part,” entered into an agreement, which is attached to the complaint as Exhibit “A”; that on June 24, 1896, the same parties entered into another contract, which is attached to the complaint as Exhibit “B”; and on June 26, 1896, they entered into a still further contract, which is attached to the complaint as Exhibit “C”j that “thereafter and heretofore, in pursuance of said *152 agreement, Exhibit ‘B,’ a corporation was formed under the laws of the state of California, known as the Forsyth Seeded Raisin Company, with a capital stock of $100,000, divided into 1,000 shares of the par value of $100 each”; that pursuant to said agreement “B,” on or about April 12, 1899, there “were issued and delivered to this plaintiff ” 167 shares of the capital stock of said corporation, of which, on April 19, 1899, “plaintiff was the owner and holder of 152 shares . . . so issued to him, and said shares were of the value of $15,200.00”; that “on said date, at the procurement of defendant, an assessment of $6 per share, including said 152 shares so owned and held by plaintiff, was levied upon the capital stock of said corporation, payable on May 22, 1899,” on which last-named day “said stock of plaintiff’s became delinquent on account of the nonpayment of said assessment, and thereafter, on June 12, 1899, was duly advertised and sold to pay said delinquent assessment, and at said sale said stock was sold away from plaintiff, and he was wholly unable to pay said assessment, or any part thereof, and the whole of said stock became and is lost to him”; that plaintiff and said Sprower have duly performed all the conditions on their part to be performed by said agreements, “A,” “B” and “C”; that prior to the sale of said stock, plaintiff requested defendant “to pay the assessment so levied thereon, but defendant neglected and failed to pay the same, or any part thereof, to plaintiff’s great damage, to wit, his damage in the sum of $15,200.”

Exhibit “A” purports to be between “Wm. Forsyth of Fresno, California, of the first part, and George Pettit, Jr., and John D. Sprower, both of Brooklyn, New York, of the second part,” in which “first party” agrees to advance money “for the manufacture by the parties of the second part” of certain machines for seeding raisins, to be delivered in New York and thence taken to Fresno by first party. In consideration of such advance by first party, “the parties of the second part agree to apply for letters patent . . . before the manufacture and delivery of the said machines to party o£ first part.” It was further agreed that “the parties of the second part—one of them”—should go to Fresno to superintend the running of the machines, and they also agreed not to make these machines for persons other than first party; money *153 advanced by first party was to be charged to the business of seeding raisins and first party and second parties were to “share alike in the profits in the business of seeding raisins.” “The party of the second part shall be entitled to draw not to exceed $150 per month for living expenses; said amount to be charged against his share in the business.” (Presumably referring to person who was to go to Fresno.) This contract bears date December 31,1895, and was to continue three years from its date. On the twenty-fourth day of June, 1896, the contract, Exhibit “B,” was entered into. It purports to be “between Wm. Forsyth, . . . party of the first part, and George Pettit, Jr., and John D. Sprower of Brooklyn, New York.” It refers to the contract of December 31, 1895, and states that it is deemed best to form a corporation under the name of the Forsyth Seeded Raisin Company, with a capital stock of $100,000, divided into 1,000 shares of $100 each, for the purpose of dealing in the articles mentioned in said first contract; also that it is deemed best to modify the terms of said contract, and that “the contract heretofore made by the parties hereto shall be transferred and assigned to said corporation. ’ ’ “Now, therefore, in consideration of the premises, it is mutually understood and agreed by and between the parties hereto: 1. That said first party will, at his own expense, incorporate said company upon the lines aforesaid, that the second parties will take and subscribe for and receive one-third of the capital stock of said company. Said stock so delivered to said second party shall be unassessable, and if any assessments are at any time levied upon said stock for the purpose of carrying on the business of the corporation and paying the necessary expenses thereof, the same will be borne by said first party.” First party was to hold one-third of the stock and the other third was to “be sold and disposed of to the best advantage, so as to interest parties in the said corporation and the purposes thereof.”

“2. Said first party is thereupon a transfer unto said corporation so to be formed, the contract heretofore made between the parties hereto,” and the first party was to be released from further obligations thereunder, and when assigned to said corporation said contract “shall be continued for the further period of forty-seven years from and after the termination thereof as specified in said contract.”

*154 3. One-third of the stock of the corporation was to “he sold tiy first party upon such terms and prices as may he agreed upon, but in no event for a less sum than - per cent of the par value thereof.”

4. Upon the assignment of said first contract to the corporation, second parties relinquished “any claim to any compensation and to any profits to he paid them, or either of them, under or in pursuance of the terms of said contract, but in lieu thereof, are to receive their proportion of the profits as the owners of a portion of the capital stock of said corporation. ’ ’

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189 P. 319 (California Court of Appeal, 1920)

Cite This Page — Counsel Stack

Bluebook (online)
113 P. 892, 15 Cal. App. 149, 1910 Cal. App. LEXIS 2, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pettit-v-forsyth-calctapp-1910.