Brensinger v. Margaret Ann Super Markets

• Decision Date: 13 November 1951
• Docket Number: No. 13429.,13429.
• Citation: 192 F.2d 458
• Parties: BRENSINGER et al. v. MARGARET ANN SUPER MARKETS, Inc., et al.
• Court: U.S. Court of Appeals — Fifth Circuit

192 F.2d 458 (1951)

BRENSINGER et al. v. MARGARET ANN SUPER MARKETS, Inc., et al.

No. 13429.

United States Court of Appeals Fifth Circuit.

November 13, 1951.

R. H. Ferrell, D. H. Redfearn, John M. Murrell, and Walter E. Dence, all of Miami, Fla., for appellants.

W. G. Ward, Robert H. Anderson, and Emett C. Choate, all of Miami, Fla., for appellees.

Before HUTCHESON, Chief Judge, and HOLMES and STRUM, Circuit Judges.

JOSEPH C. HUTCHESON, Chief Judge.

George M. Crump, as the owner of 15 shares, and Ray D. Brensinger, as the owner of one share, out of a total of 16,470 shares of common stock, brought this suit on January 13, 1950, under rule 23(b), Federal Rules of Civil Procedure, 28 U.S.C.A., naming the corporation as defendant along with the defendants charged with having wronged it. These were Robert Pentland, Jr., named as the arch offender, his daughter and his mother, and three persons, associates of his in the accounting firm of Pentland, Purvis, Keller & Milton.

Reduced to its essentials, the claim was: that Pentland, by belittling the value of the corporate stock, influencing the nonpayment of dividends and otherwise depressing its value, had acquired for himself and his named associates, at ridiculously low prices below the market, a majority¹ of the voting shares, thereby obtaining control of the corporation; that an unnamed part of the shares had been acquired with funds of the corporation; that among the purchases of stock made at ridiculously low prices was the purchase in May, 1939, of 2500 shares at $2.00 per share, in June, 1941, of 500 shares at $5.00 per share, and in October, 1943, of 100 shares; and that the shares thus acquired were unlawfully issued and should be called in and cancelled; that using the power thus acquired by the control of the stock, he had caused the directors of the corporation to vote him and his family excessive and exorbitant funds and committed other fraudulent acts and violations of his duty as an officer and director of the corporation. Among these were: the payment of a royalty to his daughter for the use of her name; the payment of unreasonable bonuses to himself; the use of corporate funds for his own purpose; and forcing the corporation to borrow money from him.

The prayer was for a full accounting and a judgment: cancelling the stock thus fraudulently acquired and held; and directing the return to the corporation of all monies illegally obtained from it.

The defendants, on February 6, 1950, filed a motion to strike, a motion to dismiss,² and answers.³ Then followed, on February 10, 1950, a motion for summary judgment under rule 56, setting up that there was no genuine issue as to any material fact which in law would entitle plaintiff to recovery, with affidavits and documents attached.⁴

No controverting affidavits or other form of controversion were filed, and the district judge, after full consideration, entered summary judgment.⁵

Appealing from that judgment, plaintiffs are here insisting that in so adjudging and in dismissing the complaint, the district judge erred. The defendants are here urging as vigorously that the judgment should be affirmed for the reasons given by the district judge, and, in addition, for the reason that the complaint was barred by the three year statute of limitations of Florida.

Here appellants insist that on the face of the complaint a case was made out such that the complaint could not have been dismissed for failure to state a cause of action, and that, though the defendants did file affidavits specifically and directly controverting the allegations of the complaint, the complaint having been sworn to, these affidavits did not swear away the effect of the sworn bill, and the case stood for trial on the issues joined by the answer.

We do not think so. We think it clear that on its face the complaint was insufficient to sustain a recovery. This is so because it failed, except as to the stock purchase, the use of his daughter's name, and the payment of unreasonable bonuses, to definitely allege what acts Pentland had done. Particularly it failed to allege wherein the acts charged to Pentland were wrongful or illegal, relying instead on mere generalities and conclusions. It is insufficient, too, because if it could be said to be sufficiently definite as a stockholders' bill, it showed on its face that the moving plaintiff was now estopped and barred by laches to maintain the action after the lapse of time and under the circumstances of the matter shown, and because the statutes of limitations of Florida had run against the complaint.⁶ In addition, we think it clear that the motion for summary judgment was correctly granted because the case presented no material dispute of fact. This is so, not merely because plaintiff failed to file controverting affidavits but because, opposed to the generalities and conclusions of the complaint, the affidavits positively and definitely established that its conclusions of wrong doing were completely unfounded. In addition, they established that instead of the corporation having a cause of complaint, its affairs had been managed so efficiently and satisfactorily by its officers and directors that not merely Pentland but all of the stockholders, except plaintiff, with full knowledge of the facts, had ratified and confirmed all that its officers and directors had done.

It is settled law, not only in this circuit⁷ but elsewhere, that, under rule 56, the court examining the pleadings and the affidavits and documentary proof furnished is to determine whether there is any genuine issue of fact remaining to be tried. The district judge on the record before him determined that there was not. On that record he could not...