Coleman v. Coleman
| Decision Date | 11 October 1966 |
| Docket Number | No. F--360,F--360 |
| Citation | 191 So.2d 460 |
| Parties | P. N. COLEMAN, Jack Coleman, Leo C. Coleman, Alexander C. Liggett and American Celcure Wood Preserving Corporation, a Florida corporation, Appellants. v. Lester COLEMAN, Jr., Dorothy W. Coleman, and M. J. Olivier, Appellees. |
| Court | Florida District Court of Appeals |
Glickstein, Crenshaw, Glickstein & Hulsey, Jacksonville, and Parker, Foster, & Madigan, Tallahassess, for appellants.
Larkin, Lewis & Decker, and Boyd, Jenerette & Leemis, Jacksonville, for appellees.
This is an appeal by the defendant below from a final decree granting injunctive and other relief to the plaintiff stockholders (appellees) against American Celcure Wood Preserving Corporation and the remaining stockholders of said corporation. The decree is affirmed.
In essence, the complaint and pleadings charged that the natural parties defendant, constituting the directors and officers of the defendant corporation, by action taken at a special meeting of the Board of Directors held September 12, 1962, unlawfully undertook to perpetuate themselves in office and control of the defendant corporation by fraudulently causing Class A voting stock held by the corporation to be issued to themselves, for which they gave no consideration other than the exchange of their Class B non-voting stock, share for share; and further, that said defendants, in pursuit of said unlawful purpose, at said meeting caused certain hereinafter described by-laws to be adopted at a special meeting of the Board of Directors.
Defendant-appellants P. N. Coleman and Jack Coleman and the defendant corporation by their affirmative defenses charged that plaintiff were estopped to complain of the issuance of said Class A voting stock pursuant to the September 12, 1962, meeting of the Board of Directors because they had not complained of an exchange of Class B non-voting stock for Class A voting stock as authorized and issued pursuant to action of a former board of directors on February 28, 1950, more than 12 years prior to this suit. (Note: The record indicates that it is likely that the mentioned 1950 meeting was the first meeting of the Board of Directors of the corporation and that the distribution of stock at that time was in accordance with the organizational plan of the incorporators.)
The defendant corporation by its counterclaim sought to have all 163 shares of Class a, voting stock held by plaintiffs invalidated on the ground that it was issued (Note: The defendant corporation was organized under Florida law on December 29, 1949. Defendant P. N. Coleman, his brother, R. L. Coleman, and plaintiff M. J. Olivier were the original stockholders of the corporation.
in exchange for Class B non-voting stock pursuant to said February 28, 1950, meeting; and also sought to have all outstanding stock (Class B as well as Class A) treated and considered, without distincition, as voting stock. In defense of said counterclaim, plaintiffs asserted the doctrines of laches and estoppel.
The corporation was authorized by its certificate of incorporation to issue five hundred (500) shares of Class A voting stock and five hundred (500) shares of Class B non-voting stock. From March 1, 1950, and thereafter until the death of R. L. Coleman the Class A voting stock was held as follows:
P. N. Coleman - 150 Shares
R. L. Coleman - 150 Shares
M. J. Olivier - 65 Shares
Upon the death of R. L. Coleman his stock was divided between his surviving spouse and son and thereafter the said Class A voting stock was held as follows:
P. N. Coleman - 150 Shares
M. J. Olivier - 65 Shares
Dorothy W. Coleman - 75 Shares
Lester Coleman, Jr. - 75 Shares
Various individuals including the parties held Class B non-voting stock.)
Defendants P. N. Coleman and Jack Coleman by their counterclaim alleged that By-Law 44 of the defendant corporation 1 provides that an owner of stock receiving any bona fide offer for the purchase is obligated to give notice thereof to the remaining stockholders who shall have an option for thirty days to purchase said stock or interest therein on the same terms; and also alleged that in violation of said By-Law 44 plaintiffs Dorothy W. Coleman and Lester coleman entered into an agreement on or about August 17, 1962, granting them the right to purchase plaintiff M. J. Olivier's 65 shares of Class A voting stock On the basis of the pleadings, testimony and evidence, argument of counsel, and briefs submitted, the chancellor by the decree appealed found that the following issues were presented for determination:
in the defendant corporation and giving them his proxy to vote said stock. Said counterclaim sought to have said agreement and the proxies given in connection therewith declared void because of the alleged non-compliance by plaintiffs with the provisions of said by-law. It further sought to enjoin the voting of the said 65 shares of stock. In defense of said counterclaim the plaintiffs asserted the doctrines of estoppel and waiver and also asserted that By-Law 44 was invalid and inapplicable to said agreement.
fiduciary relationship.
The decree thereupon made the following findings of fact and conclusions of law, and on the basis thereof decreed:
'1. The American Celcure Wood Preserving Corporation (the defendant corporation) is a corporation organized and existing under the laws of Florida, having been established and incorporated on December 29, 1949.
'2. The defendant corporation is authorized by its certificate of incorporation to issue 500 shares of Class A voting common stock and 500 shares of Class B non-voting common stock as set out in Article III of said certificate.
'3. Article III of said Certificate of Incorporation provides that any holder of Class A voting stock may elect to have all or part of his Class A voting shares converted into Class B non-voting stock, share for share. There is no provision in the certificate of incorporation for the exchange of or conversion of Class B non-voting stock into Class A voting stock.
'4. (a) Since March 1, 1950, the Class A voting stock of defendant corporation was held as follows:
Name of Stockholder Number of Shares
Class A Voting Stock
-------------------------------------------------------
P. N. Coleman (Defendant) 150 Shares
M. J. Olivier (Plaintiff) 65 Shares
R. L. Coleman (the now 150 Shares
deceased husband of Plaintiff
Dorothy W. Coleman and father
of Plaintiff Lester Coleman, Jr.)
'Upon the death of the above named R. L. Coleman, his shares of Class A voting stock were transferred on March 29, 1956, to his heirs who are plaintiffs in this cause:
Name of Stockholder Number of Shares
Class A Voting Stock
-----------------------------------------------------
Dorothy W. Coleman (Plaintiff) 75 Shares
Lester Coleman, Jr. (Plaintiff) 75 Shares
'The outstanding Class A voting stock has been so held until the defendants by their acts as charged in the complaint attempted to issue additional Class A voting stock to perpetuate their control of the defendant corporation.
(b) At the time of and immediately prior to, the commission of the acts by the defendants complained of in the complaint the following parties owned Class B non-voting stock as indicated:
Name of Stockholder Number of Shares
Class B Non-Voting Stock
----------------------------------------------------------
P. N. Coleman (Defendant) 70 Shares
Jack Coleman (Defendant) 7 1/2 Shares
Leo C. Coleman (Defendant) 7 1/2 Shares
Alexander C. Liggett (Defendant) 50 Shares
Lester Coleman, Jr. (PLaintiff) 10 Shares
Dorothy W. Coleman (Plaintiff) 10 Shares
'Numberous other persons, not parties to this cause, have owned Class B non-voting stock since the organization of defendant corporation.
'5. On August 17, 1962, the plaintiffs, Dorothy W. Coleman and Lester Coleman, Jr., entered into a written agreement with plaintiff M. J. Olivier, (Plaintiffs' Exhibit 13) providing, Inter alia, that plaintiff, M. J. Olivier, shall give to plaintiff Dorothy W. Coleman a...
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