309 F.2d 741 (5th Cir. 1962), 19175, Meyer v. Seaboard Finance Co.

Docket Nº:19175.
Citation:309 F.2d 741
Party Name:Ferd S. MEYER and Hoke T. Maroon, Appellants, v. SEABOARD FINANCE COMPANY, Appellee.
Case Date:November 02, 1962
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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309 F.2d 741 (5th Cir. 1962)

Ferd S. MEYER and Hoke T. Maroon, Appellants,

v.

SEABOARD FINANCE COMPANY, Appellee.

No. 19175.

United States Court of Appeals, Fifth Circuit.

November 2, 1962

Rehearing Denied Dec. 7, 1962.

Robert C. Ward, Ward & Ward, Miami, Fla., for appellants.

Laurence A. Schroeder, John H. Wahl, Jr., Miami, Fla., for appellee. Walton, Lantaff, Schroeder, Atkins, Carson & Wahl, Miami, Fla., of counsel.

Before RIVES, JONES and GEWIN, Circuit Judges.

JONES, Circuit Judge.

The judgment before us on appeal was entered in an action which grew out of the Peckham-Family Loan Company litigation. The appellee, Seaboard Finance Company, is a Delaware corporation with its principal place of business in California. The appellants, Ferd S. Meyer 1 and Hoke T. Maroon, for themselves and other stockholders of Family Loan Company, entered into a contract on April 20, 1953, with Seaboard for the exchange of all of the stock of Family Loan for 61,000 shares of the stock of seaboard. Meyer and Maroon, for themselves and the other stockholders of Family Loan represented by them, referred to collectively as the Associated Stockholders, represented and warranted by a provision in the contract 2 that Family

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Loan had no liabilities except as were shown in its audit report and balance sheet. Also included in the contract was a covenant of indemnity 3 of Meyer and Maroon by which they undertook to indemnify Seaboard and Family Loan in respect of all liabilities of Family not appearing on the audit report or balance sheet.

R. E. Peckham was the assignee of a judgment for $824,933.33 against Sol Meyer. In 1949 Peckham brought suit against Family Loan, Meyer, Maroon, and others, in the nature of a creditors bill, 4 asserting that Family Loan was created with assets of Sol Meyer for the purpose of defrauding his creditors, and seeking to subject the assets of Family Loan and its outstanding stock to the judgment against Sol Meyer. The Peckham suit was not reflected or reserved in the audit of Family Loan Company nor in its balance sheet. Meyer and Maroon advised Seaboard of the existence of the suit before the contract was executed. On or about May 25, 1953, stock of Family Loan was transferred by Meyer and Maroon to Seaboard pursuant to the contract. On October 24, 1954, Peckham filed a supplemental complaint, joined Seaboard as a...

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