Enter. Printing & Publ'g Co. v. Craig

• Court: Indiana Supreme Court
• Writing for the Court: EWBANK
• Citation: Enter. Printing & Publ'g Co. v. Craig, 195 Ind. 302, 144 N.E. 542 (Ind. 1924)
• Decision Date: 26 June 1924
• Docket Number: No. 24725.,24725.
• Parties: ENTERPRISE PRINTING & PUBLISHING CO. v. CRAIG et al.

195 Ind. 302

144 N.E. 542

ENTERPRISE PRINTING & PUBLISHING CO.

v.CRAIG et al.

No. 24725.^*

Supreme Court of Indiana.

June 26, 1924.

Appeal from Circuit Court, Hamilton County; Ernest E. Cloe, Judge.

Action by Will H. Craig against the Enterprise Printing & Publishing Company and others. From judgment appointing a receiver, etc., defendant corporation appeals. Transferred from Appellate Court under Burns' Ann. St. 1914, § 1394 (Acts 1901, c. 247, § 10). Reversed with directions.

Superseding opinion of Appellate Court, 135 N. E. 189.

Christian & Waltz, of Noblesville, for appellant.

Gentry, Cloe & Campbell, of Noblesville, for appellees.

EWBANK, J.

The appellant company appealed from a judgment appointing a receiver, and commanding that he take possession of all its property and assets, and sell the same, and distribute the proceeds among its stockholders in proportion to the amount of stock held by each, and further adjudging that appellant recover certain amounts of money as against each of its codefendants below, the appellees Edward E. Neal and Charles S. Neal, and that it recover a further sum from both of them jointly, together with its costs, and that the receiver deduct the amounts of such judgments from the distributive shares of Neal and Neal, as stockholders, in the proceeds to be distributed by him.

Appellant has assigned as error, among other things, the overruling of its motion to make the complaint more specific and of its demurrer to the complaint, and that the court erred in its conclusion of law that a receiver should be appointed for the appellant company, and that its property should be sold and divided among the stockholders.

The complaint alleged, in substance, that the defendant company (appellant) was a corporation with a capital stock of $25,000, divided into shares of $25 each, and was engaged in publishing a newspaper and doing a job printing business; that since April, 1916, plaintiff (appellee Craig) had owned 480 of said shares, and defendants Neal and Neal (also appellees) had owned 519 shares, and that the daughter of one of them had owned one share; that at the annual stockholders' meetings defendants Neal and Neal had elected themselves and said daughter as directors, and one of themselves as president and the other as secretary, treasurer, and business manager of the company in April, 1916, and each year thereafter, and had assumed and exercised full control of the company and its property; that their services “were of the reasonable value of only, to wit, $1,000 per year, each,” but that as such directors they “voted and paid to themselves large and exorbitant salaries” in larger amounts, as set out, which were in excess of the value of their services; that they kept no books, and plaintiff cannot identify the exact amounts paid by defendants to themselves as salaries; that defendants Neal and Neal have also fraudulently and unlawfully appropriated to themselves large sums of money belonging to said company, to wit, $3,000; that advertising was printed by the defendant company to an amount not known by plaintiff nor shown by the books of defendant company, which was paid for in merchandise that defendants Neal and Neal appropriated to their own use; that said defendants owned a linotype machine, and sold it to their codefendant, the company, for $1,600 which was greatly in excess of its actual value; that they have not kept accurate accounts of the receipts and disbursements of the company, and have taken credit for sums of money as paid out for its benefit which were not so paid; that at the annual meetings of stockholders defendants gave no consideration to plaintiff, but elected themselves and said daughter as the officers, and merely informed plaintiff of the result; that defendants refused to let plaintiff examine the books and accounts of the company, but after he had sued them did permit such an examination; that defendants charged their attorney fees in said litigation to the defendant company; that all stockholders but plaintiff, other than defendants Neal and Neal, are relatives of said defendants, and are taking no part in the management of the corporation, but are consenting to the acts of said defendants; that plaintiff offered to sell his stock to Neal and Neal “at its fair value,” but they refused to pay more than part for it, and demanded twice the par value for their own stock. And it was further averred:

“That, on account of the said Edward E. Neal and Charles S. Neal, the owners of a majority of said stock, and the remaining stockholders, except the plaintiff, consenting to the management of said corporation by said defendants in such manner as they chose, an unprejudiced board of directors cannot be chosen to manage the affairs of said corporation in the interest of all the stockholders thereof, but that Edward E. Neal and Charles S. Neal demand the right as majority stockholders to manage the said corporation in their own interest and without regard to the rights of the minority stockholders. *** Plaintiff avers that, if said defendants, Edward E. Neal and Charles S. Neal, are permitted to...