San Francisco & Suburban Home Building Society v. Leonard

119 P. 405, 17 Cal. App. 254, 1911 Cal. App. LEXIS 88
CourtCalifornia Court of Appeal
DecidedOctober 17, 1911
DocketCiv. No. 828.
StatusPublished
Cited by27 cases

This text of 119 P. 405 (San Francisco & Suburban Home Building Society v. Leonard) 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
San Francisco & Suburban Home Building Society v. Leonard, 119 P. 405, 17 Cal. App. 254, 1911 Cal. App. LEXIS 88 (Cal. Ct. App. 1911).

Opinion

HART, J.

The plaintiff is a corporation, organized under the laws of the state of California.

The business of said corporation is that of selling improved real estate, and for that purpose it became the owner of a large number of lots situated in what is designated as “Jordan Tract,” in the city of San Francisco. The scheme of the corporation was the erection of dwelling-houses on the lots in said tract and the selling or the leasing thereof.

On the twenty-sixth day of January, 1905, tie plaintiff and the defendant, Joseph A. Leonard, entered into a written agreement, by the terms of which said Leonard became, for the term of four years from the first day of January, 1906, the manager of plaintiff’s business, for the performance of the duties of which he was to receive certain stipulated compensation.

Among other, covenants, said contract contained the following: “In the event that the land owned or hereafter acquired *257 by the Society in the ‘Jordan Tract’ is finally built up by the erection of houses as now contemplated, or building operations thereon are suspended for ninety (90) days on account of inability to sell houses and lots at a profitable price, or if, for any reason, the net profits for any period of ninety (90) days shall be less than the expenses properly charged against that period of time, then this agreement may be terminated by either party upon giving sixty (60) days notice, and thereupon accounts between the parties thereto shall be closed, and as soon as ascertainable, profits adjusted in accordance therewith. ’ ’

It was further provided by said contract that, “at the time of the settlement between the parties hereto, if any question arises as to the value of any of the securities, mortgages or any property,” etc., “ . . . such question shall in the event the parties hereto cannot agree as to the value, be appraised by two appraisers, one to be selected by the first party and one to be selected by the second party.”

On the ninth day of January, 1908, the board of directors of the corporation, then composed of James G. Jordan (president), E. K. Taylor, William B. Pringle, H. G. Pendleton and Joseph A. Leonard (defendant), who also held the office of vice-president, held a meeting at which a resolution was adopted by which, after setting forth that the net profits of plaintiff “for a period of thirty days have been less than the expenses properly charged against that period of time,” the contract made with Leonard was, in accordance with the terms of paragraph 5 thereof, above quoted, terminated, it being therein further provided that sixty days’ notice be given Leonard of the election of the corporation to terminate said contract.

Leonard was present at said meeting and voted against the adoption of said resolution.

On the same occasion, the president of the corporation wrote and delivered to Leonard a letter, formally notifying him of the foregoing action of the board of directors.

On March 4, 1908, a committee selected from the board of directors, having previously been appointed for that purpose, reported to the board at a regular session thereof that “the value of the goods, securities, mortgages and properties, and *258 the amount to be written off for depreciation, are materially different from those given in the statement referred to the committee and reports of Mr. Leonard now on file.”

Said report was received and filed and thereupon the board of directors adopted a resolution declaring that a dispute had arisen between plaintiff and Leonard “as to the value of the securities, mortgages and property of this company, and as to the amount to be taken off for depreciation,” and appointing, under the authority so to do provided for by the contract between plaintiff and Leonard, one Stanley Pedder to be its arbitrator and appraiser, “to join with an arbitrator and appraiser to be appointed by J. A. Leonard under said contract, and to act under said contract in said matters, and that Mr. J. A. Leonard be and is now requested to appoint an arbitrator and appraiser in accordance with said contract.”

On the same day—March 4th—a resolution was adopted instructing Leonard to deliver up, on March 9th, possession of the keys to the offices and buildings and of “everything pertaining to the company to Mr. Pendleton, the secretary of the corporation,” etc.

The offices of the manager and the board of directors were located in a building situated within the exterior boundaries of “Jordan Tract.” On March 11, 1908—a trifle over sixty days after notice had been served upon Leonard of the action of the directors terminating the contract by which he was employed as manager of the corporation—directors Pringle, Pendleton and Taylor, accompanied by several other parties, including Pedder, who, as seen, was appointed by the board as arbitrator and appraiser to examine into the affairs of the company, called at the office of the manager and demanded a surrender of the possession of his office and the properties of the corporation. Pringle read to Leonard, in the presence of some other men, some of whom were special policemen, who were there to aid Leonard in keeping possession, the several resolutions theretofore adopted by the board of directors—the one terminating Leonard’s employment and the others appointing Pedder as an appraiser, etc., and authorizing Pendleton, as secretary of the corporation, to take charge of the keys and the properties, etc. But Leonard, *259 assisted by the special policemen, refused to permit the directors to take charge of the affairs of the corporation. Pedder, having entered the office, was ejected by force. While Pendleton was permitted to go into the office and the other buildings, he was not allowed to handle any of the properties of the corporation.

On several occasions thereafter, the directors, either through agents specially commissioned for that purpose or by their own personal efforts, attempted to secure possession of the manager’s office and the properties of the company, but were each time repelled by Leonard, the latter at different times forcibly ejecting Pedder, a Mr. Derby, appointed by the board to take charge of the affairs of the company, and the Kinney Brothers, who were, on the twentieth day of March, 1908, appointed and authorized by the directors to take and maintain possession, on behalf of the corporation, “of all the real property of this corporation in Jordan Park, including the mill thereon and its contents.” One Sullivan, a carpenter, had been sent by the board to the premises to take charge of the mill and proceed with the completion of certain dwelling-houses then in process of construction, and upon which no work was then being done on account of the differences between the company and Leonard. The latter refused to permit Sullivan to take charge of the mill and execute the duties thus committed to him. In addition to the commission of the foregoing acts of resistance to the efforts of the corporation to secure. possession and control of its properties and affairs, Leonard changed the locks on the doors to his office and other buildings on the premises, and also changed the combination to the safe. He, however, turned the keys to the new locks and the combination over to the secretary, Pendleton, on March 12th.

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Bluebook (online)
119 P. 405, 17 Cal. App. 254, 1911 Cal. App. LEXIS 88, Counsel Stack Legal Research, https://law.counselstack.com/opinion/san-francisco-suburban-home-building-society-v-leonard-calctapp-1911.