Wilson v. HJ Wilson Co., Inc.

430 So. 2d 1227, 1983 La. App. LEXIS 8285
CourtLouisiana Court of Appeal
DecidedApril 5, 1983
Docket82 CA 0629
StatusPublished
Cited by26 cases

This text of 430 So. 2d 1227 (Wilson v. HJ Wilson Co., Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wilson v. HJ Wilson Co., Inc., 430 So. 2d 1227, 1983 La. App. LEXIS 8285 (La. Ct. App. 1983).

Opinion

430 So.2d 1227 (1983)

Woodrow E. WILSON, et al.
v.
H.J. WILSON CO., INC., et al.

No. 82 CA 0629.

Court of Appeal of Louisiana, First Circuit.

April 5, 1983.
Rehearing Denied May 20, 1983.

*1228 Thomas E. Balhoff, Owen, Richardson, Taylor, Mathews & Akinson, Baton Rouge, for plaintiffs-appellants, Woodrow E. Wilson and Mary Catherine McLin Wilson.

*1229 Robert E. Barkley, Jr., Sessions, Fishman, Rosenson, Snellings & Boisfontaine, New Orleans, for defendants-appellees, H.J. Wilson Co., Inc. and Huey J. Wilson.

Before LOTTINGER, COLE and CARTER, JJ.

CARTER, Judge.

This is a suit to recover a certain number of shares of stock in H.J. Wilson Co., Inc. Plaintiffs, Woodrow E. Wilson and his wife, Mary Catherine McLin Wilson, appeal the judgment of the trial court in favor of the defendants, H.J. Wilson Co., Inc. and Huey J. Wilson.

FACTS

Huey J. Wilson (Wilson), the founder of and principal stockholder in H.J. Wilson Co., Inc. (Company), incorporated his first store in Baton Rouge, Louisiana in 1958. Wilson opened a second store, which was separately incorporated in 1961, in Jackson, Mississippi. In early 1965, a third store, also incorporated separately, was opened in Gulfport, Mississippi.[1] The Company operates a chain of catalog showrooms.

Woodrow E. Wilson (Woodrow), a minority shareholder in the Company is in the construction business with his own construction company, and is not now nor has he ever been actively engaged in the operation of the catalog showroom business.

The capital stock of the Baton Rouge store was owned by Wilson and his wife, Angelina (except for a few shares not involved in the present suit). Similarly, all of the stock of the Gulfport store was owned by Wilson and his wife. As for the Jackson store, Wilson held 600 of the 800 outstanding shares, with 100 shares each owned by Wilson's brothers, Woodrow and George, who had each contributed $10,000 to the Jackson store when it began operation.

In 1965, it was determined to reorganize the operation of the three stores under one corporation for purchasing, financing and accounting purposes. On July 1, 1965, a stock-for-stock agreement was executed by the former shareholders, whereby all shares of the three stores were acquired by a holding company known as Wilco, Inc., and in return the capital stock of Wilco, Inc. was issued to said shareholders. The reorganization was purportedly structured upon the respective book values of the three stores as shown in the financial statements at that time. Woodrow and George were each issued 202 shares of Wilco stock in exchange for their shares in the Jackson store. Alvin Wilson received one share, Angelina was issued 593 shares, and the remaining shares (3,058) were held by Huey J. Wilson.

On February 24, 1970, two new stock certificates were issued to Woodrow for 123 shares and 79 shares, respectively, said certificates totaling 202 shares. Woodrow did not turn in the Wilco certificate for 202 shares for cancellation. On that same date, Woodrow assigned the certificate for 79 shares to Wilson. He now claims this assignment of the certificate was fraudulently obtained by Wilson. The Company's records show a transfer of 35 shares from Woodrow to Wilson on February 15, 1971. This transfer is also questioned by Woodrow. Wilson's position is that the transfers of these two certificates to him was to adjust the stock distribution so as to more accurately reflect the relative values of the Baton Rouge and Jackson stores at the time of the reorganization.

On February 24, 1971, the three subsidiary companies were merged into a holding company, and the name of the corporation was changed to H.J. Wilson Co., Inc. At the same time, a reclassification of the Company's stock was approved, resulting in a 203 for 1 stock split to shareholders of record as of the close of business on February 15, 1971. The Company's books as of said date reflect Woodrow's ownership interest as being 88 shares instead of 202 shares, which Woodrow claims. Thereafter, on April 1, 1971, Woodrow was sent a stock certificate of the new corporation for the *1230 number of shares equivalent to the 88 shares. In June of 1971, the Company made a public offering of stock. During 1972, Wilson retransferred to Woodrow the 35 shares which had been transferred to Wilson on February 24,1970. Wilson refused to have any additional shares issued to Woodrow.

When it became apparent that an amicable settlement could not be reached, Woodrow filed the present suit on February 25, 1980, in state district court, and filed a companion suit based upon the federal securities laws, Section 10(b) 15 U.S.C. 78 j(b) and Rule 10b-5 thereunder, in federal court seeking recovery of the 79 shares or their value. At a status conference in the state suit in May, 1981, the trial judge decided to take no further action in the matter pending the decision in the federal case. By agreement of the parties, the federal suit was tried to the court alone only on the issue of prescription. On April 16,1982, the federal court, in written findings of fact and conclusions of law, applied a prescriptive period of two years to this claim under Section 10(b) of The Securities and Exchange Act of 1934. The federal district court further found that the plaintiffs were aware of enough facts which should have caused them to investigate further into the claim at least some time in 1972. Thus, since the action was not brought until 1980, the claim was held to have prescribed.[2] The federal district court found that The Securities and Exchange Act of 1934 contained no limitation period (prescription) that is applicable to claims under Section 10(b) and Rule 10b-5 promulgated pursuant thereto (17 C.F.R. § 240.105) and that federal law did not prescribe any general statute of limitation for civil actions. Consequently, the federal district court then examined the laws of the forum state (Louisiana) in an effort to find the statute most similar in purpose to Rule 10b-5.[3] The federal district court determined that there was a close analogy between Rule 10b-5 and the Blue Sky Law, La.R.S. 51:715 A(3) and E and held that the two year limitation period established by the Louisiana Blue Sky Law applied to this action as concerns the claim under Rule 10b-5. After maintaining the two year prescriptive period, the federal court dismissed the state claims without prejudice. See Wilson, et al v. H.J. Wilson, Co., Inc., No. 233,380 on the docket of the United States District Court for the Middle District of Louisiana, decided April 16, 1982, by Judge John V. Parker.

The federal district court also seriously considered acting upon the various allegations involving the laws of the State of Louisiana (and alleged violations thereof) asserted in the proceeding in federal court and determined that the plaintiff would not be prejudiced by its dismissal of all actions in federal court since the instant proceeding was pending in state court.[4]

*1231 Back in the state court, the plaintiffs filed an amended petition, and the defendants filed pleas and exceptions of res judicata, collateral estoppel, prescription, no cause of action, and no right of action.

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

Related

Languirand v. Lopez
261 So. 3d 1054 (Louisiana Court of Appeal, 2018)
Guillory v. Broussard
242 So. 3d 733 (Louisiana Court of Appeal, 2018)
Moore v. Macquarie Infrastructure Real Assets
258 So. 3d 750 (Louisiana Court of Appeal, 2017)
Coleman v. Querbes Co. No. 1
218 So. 3d 665 (Louisiana Court of Appeal, 2017)
Simone B. Guillory v. Samuel S. Broussard, Jr.
Louisiana Court of Appeal, 2016
Paul Piazza & Son, Inc. v. Piazza
83 So. 3d 1066 (Louisiana Court of Appeal, 2011)
Eckert v. Roux
39 So. 3d 636 (Louisiana Court of Appeal, 2010)
Glod v. Baker
851 So. 2d 1255 (Louisiana Court of Appeal, 2003)
Sun Drilling Products Corp. v. Rayborn
798 So. 2d 1141 (Louisiana Court of Appeal, 2001)
Thornton ex rel. Laneco Construction Systems, Inc. v. Lanehart
723 So. 2d 1127 (Louisiana Court of Appeal, 1998)
THORNTON EX REL. LANECO CONST. v. Lanehart
723 So. 2d 1127 (Louisiana Court of Appeal, 1998)
De Nunez v. Bartels
727 So. 2d 463 (Louisiana Court of Appeal, 1998)
Davis v. Parker
Fifth Circuit, 1998
Dennis v. Copelin
669 So. 2d 556 (Louisiana Court of Appeal, 1996)
Maestri v. DESTREHAN VET. HOSP., INC.
653 So. 2d 1241 (Louisiana Court of Appeal, 1995)
Palowsky v. Premier Bancorp, Inc.
597 So. 2d 543 (Louisiana Court of Appeal, 1992)
Nowling v. Aero Services International, Inc.
752 F. Supp. 1304 (E.D. Louisiana, 1990)
Wilson v. Wilson
542 So. 2d 568 (Louisiana Court of Appeal, 1989)

Cite This Page — Counsel Stack

Bluebook (online)
430 So. 2d 1227, 1983 La. App. LEXIS 8285, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wilson-v-hj-wilson-co-inc-lactapp-1983.