Republic Finance & Investment Co. v. Fenstermaker

• Decision Date: 23 February 1937
• Docket Number: 26790.
• Citation: 6 N.E.2d 541,211 Ind. 251
• Court: Indiana Supreme Court
• Parties: REPUBLIC FINANCE & INVESTMENT CO. et al. v. FENSTERMAKER et al.

6 N.E.2d 541

211 Ind. 251

REPUBLIC FINANCE & INVESTMENT CO. et al. v. FENSTERMAKER et al.

No. 26790.

Supreme Court of Indiana

February 23, 1937

Appeal from Marion Circuit Court; Earl R. Cox Judge.

Rappaport Kipp & Lieber and Harold F. Kealing, all of Indianapolis for appellants.

Matson Ross, McCord & Clifford, James A. Ross, and Austin V. Clifford, all of Indianapolis, for appellees.

FANSLER Judge.

Appellees, stockholders in the Republic Finance & Investment Company, brought this action seeking, as dissenting shareholders, to have their shares of stock evaluated upon the merger or consolidation of that company with the Federal Discount Corporation, by assigning the assets of the old corporations to a new corporation known as the General Discount Corporation, and accepting stock in the new corporation in lieu of their former stock holdings. The merger was effected under the statute providing for such mergers and consolidations. By agreement of the parties, the procedure provided for by statute, for the determination of the value of the stock by appraisers, as in condemnation proceedings, was waived, and it was agreed that the evidence was to be submitted to the court without the intervention of a jury, and that the court should find the value. There was a trial, and the value was fixed by the court.

Error is assigned upon the overruling of appellants' motion to modify the judgment, on the ground that it is too large and upon the overruling of appellants' motion for a new trial, which is upon the ground that the amount of the judgment is too large, and that it is not sustained by sufficient evidence.

The only contention brought forward by appellants to sustain the assignment of errors is that the plaintiffs introduced no evidence whatever as to the intrinsic value of the assets but relied entirely upon balance sheet figures; that the trial court based its valuation solely on the book value of the assets of the company; and that the defendants' evidence, as to the value of the assets on November 15, 1932, and November 30, 1932 (the dates of the consolidation or merger), was completely ignored by the trial court. Whether November 15th or November 30th was the effective date of the consolidation or merger seems to be in doubt in the minds of the parties, but we find no necessity of going into that question. It appears from the evidence that in June or July, 1932, negotiations were inaugurated looking toward the merger. Appraisers were selected to appraise the assets of both companies 'at present day prices,' and auditors were selected to prepare and formulate a statement of the assets and liabilities of both companies, giving effect to the appraisal. In August, 1932, appraisals of the real estate were made, and in September the auditors submitted an audit upon the basis of these appraisals and their own evaluation of the property not covered by the real estate appraisals. This audit set up a reserve against loss and shrinkage of $246,119.07, and, upon that basis, showed net worth of $688,772.87. The par value of the preferred stock, plus accrued dividends, at the date of the merger, was $11.14 per share, or $218,600.22. The par value of the class A stock plus accrued dividends at the date of the merger, was $14.13 per share, or $317,967.39, a total of $536,567.61. Appellants introduced expert witnesses, who evaluated the assets, and, from a computation based upon their valuation, testified that the preferred stock was of the par value of $10.34, and the class A stock of no value whatever. It is contended by appellants that, since the testimony of their witnesses fixed the value as of the...