General Grain, Inc. v. Goodrich

• Decision Date: 07 December 1966
• Docket Number: No. 19933,19933
• Citation: 140 Ind.App. 100,221 N.E.2d 696
• Parties: GENERAL GRAIN, INC., Appellant, v. Pierre F. GOODRICH et al., Appellees.
• Court: Indiana Appellate Court

Page 696

221 N.E.2d 696

140 Ind.App. 100

GENERAL GRAIN, INC., Appellant, v. Pierre F. GOODRICH et al., Appellees.

No. 19933.

Appellate Court of Indiana, In Banc.

Dec. 7, 1966.

Rehearing Denied Jan. 3, 1967.

William H. Krieg, Indianapolis, Russell I. Richardson, Lebanon, John S. Grimes, Donald A. Schabel, Arch N. Bobbitt, McHale, Cook & Welsh, and Frank M. McHale, Indianapolis, for appellant

Merle H. Miller, Donald F. Elliott, Jr., Alan H. Lobley, Indianapolis, Ice, Miller, Donadio & Ryan, Indianapolis, Scifres & Hollingsworth, Lebanon, of counsel, for appellees.

BIERLY, Judge.

This appeal emanated from an adverse judgment against the defendant on the 18th day of July, 1962, in a trial heard in Boone Circuit Court on change of Venue from the Superior Court, Room 2, of Marion County.

Appellees brought this action in the Superior Court of Marion County in a cause entitled:

John Beals et al. v. General Grain, Inc., and Acme Goodrich, Inc.

The plaintiff, John Beals, represented plaintiffs in one hundred and four (104) separate suits filed in said court against a common defendant under Section 37, of Indiana General Corporation Act, the same being Burns' 25--236, 1960 Replacement, which is as follows:

'If any shareholder of any corporation a party to a merger or consolidation who did not vote in favor of such merger or consolidation at the meeting at which the agreement of merger or consolidation was adopted by the shareholders of such corporation, shall, at any time within thirty (30) days after such adoption of the agreement of merger or consolidation by such shareholders, object thereto in writing and demand payment of the value of shares, the surviving or new corporation shall, in the event that the merger or consolidation shall be made effective, pay to such shareholder, upon surrender of his certificates therefor, the value of such shares at the effective date of the merger or consolidation. If within thirty (30) days after such effective date the value of such shares is agreed upon between the shareholder and the surviving or new corporation, as the case may be, payment therefor shall be made within ninety (90) days after the effective date. If, within thirty (30) days after such effective date, the surviving or new corporation, as the case may be, and the shareholder do not so agree, either such corporation or the shareholder may, within ninety (90) days after such effective date, petition the public service commission of this state, if the corporation be a public utility, or the circuit or superior court of the county in which the principal office of the corporation is located, if the corporation be not a public utility, to appraise the value of such shares; and payment of the appraised value thereof shall be made within sixty (60) days after the entry of the judgment or order finding such appraised value. The practice, procedure and judgment in the circuit or superior court upon such petition shall 'Upon the effective date of the merger or consolidation any shareholder who has made such objection and demand shall cease to be a shareholder and shall have no rights with respect to such shares except the right to receive payment therefor. Every shareholder who did not vote in favor of such merger or consolidation and who does not object in writing and demand payment of the value of his shares at the time and in the manner aforesaid, shall be conclusively presumed to have assented to such merger or consolidation. (Acts 1929, ch. 215, § 37, p. 725.)'

be the same, so far as practicable, as that under the eminent domain laws in this state; and the practice, procedure and order before the public service commission upon such petition shall be as prescribed by law and the rules of the commission.

These plaintiffs were holders of preferred stock of Acme-Goodrich, Inc., and were also dissenters to the merger of Acme-Goodrich, Inc., into Defendant, General Grain Inc., on August 10, 1958.

Prior to the merger the Indiana Securities Commission, over the objections of appellees, found and ordered that the merger was fair and equitable to all stockholders.

Appraisers were appointed by the Suprior Court of Marion County, to determine the value of the preferred stock held by the appellees.

The court-appointed appraisers reported their approval of the value of the cumulative preferred stock of Acme-Goodrich, Inc., as of August 12, 1958, as follows:

5% Series A Preferred, par value $100.00 at $66.25 per share or 66.25% of par;

4% Series B Preferred, par value $24.00, at $13.00 per share or 54.17% of par.

Exception was taken by appellees to this report on these grounds:

(1) That the values fixed by the appraisers for the Series A and B Preferred Stock of Acme-Goodrich, Inc., in said report were too low;

(2) That the report was contrary to the Court's Instructions to the appraisers, and

(3) That the report should have included interest on the appellee's stock from August 12, 1958.

The appellant excepted to said report on the ground that the values fixed by the appraisers for the stock were excessive.

Thereafter, the proceedings were venued to Boone Circuit Court, as heretofore stated, and trial was had by a jury which returned a verdict valuding the preferred stock as follows:

5% Series A, par value $10.00, at $85.00 per share or 85% of par.

4% Series B, par value $24.00, at $20.40 per share or 85% of par.

The court entered judgment on the verdict in favor of the appellees against the appellant in the total sum of $585,180.19. Additionally, that appellees recovered from appellant their costs, which the court stated were to include the one-half (1/2) of the appraisers' fees theretofore paid by appellees.

Subsequently, appellant filed a motion to modify the judgment on August 3, 1962, and on the same day filed a motion for a new trial. Both said motions were overruled on August 22, 1962.

Appellant assigns as error the overruling of its motion for a new trial, and the overruling of its motion to modify the judgment.

Appellant moved for a new trial on the following grounds: First, that the court erred in holding the defendant initially liable for the payment of one-half of the fees for services allowed to the appraisers; Second, misconduct of the prevailing party during the course of the trial; Third, error

in the assessment of the amount of recovery in that the amount is to large; Fourth, the verdict of the jury is not sustained by sufficient evidence; Fifth, the verdict of the jury is contrary to law; and Sixth, error of law occurring at the trial, to-wit:

(1) The court overruled certain objections of the defendants and erred in giving instructions on its own motion to which appellant duly objected.

(2) That the court erred in giving plaintiffs' Instruction No. 3, to which appellant duly objected.

(3) That the court erred in refusing to give to the jury certain instructions at the request of the defendant.

(4) That the court erred in modifying the defendant's Instruction No. 12, by changing the word 'should' to 'may', and then giving said Instruction to the jury.

Appellant also assigns as error that the trial court erred in determining that the appellees are entitled to recover interest from the date of the merger on the value of their stock.

The court's Instruction No. 8, reads in part as follows:

'I also instruct you that the plaintiffs are entitled to interest at the rate of six percent (6%) per annum from August 12, 1958, on the respective amounts to which they are entitled as determined by your verdict. * * *'

The crux of appellant's argument is that Section 37, of the Indiana General Corporation Act, does not provide for interest, and that in the absence of a statute or contractual provisions providing therefor, appellees are not entitled to interest from the effective date of the merger to the date of the judgment.

Appellant is correct in that the Indiana Acts (Burns' Ind.Stat.Ann. § 25--236, 1960 Replacement) do not specifically provide for interest, but does provide in part:

'* * * The practice, procedure and judgment in the circuit or superior court upon such petition shall be the same, so far as practicable, as that under the eminent domain laws in the state. * * *'

The apparent intent of the legislature was to adopt all the principles and practices of the eminent domain laws which could reasonably be applicable to the appraisal remedy.

Appellant further contends that inasmuch as payment of the value of appellees' stock is not due until sixty (60) days after the entry of the judgment in the action finding the appraisal value of such stock, the interest will not begin to accrue on the value until it becomes due.

The eminent domain laws of Indiana were promulgated in 1905. At the time the Indiana General Corporation Act was enacted in 1929, the eminent domain laws did not provide for interest to the party whose stock was condemned. The granting of interest in domain proceedings from the date of the taking, has long been recognized by the Indiana Courts. See: Schnull v. Indianapolis, etc. R. Co. (1920), 190 Ind. 572, 131 N.E. 51. It is the contention of the appellant that this has no applicability in the case at hand, because it does not follow within the 'practice, procedure and judgment,' of the eminent domain laws. Appellant further attempts to distinguish what is generally considered to be the distinction between 'adjective law' and 'substantive law.' Thus, appellant contends that the awarding of interest from the time of taking under the domain proceedings is the application of substantive law; and, hence, would have no application to the case at bar in asserting that the 'practice, procedure and judgment' has application only to 'adjective law.'

It would seem, as appellees assert, that had the legislature intended that interest run from the time of taking, it would not Appellees concede that the form of the judgment is confirmed by the applicable practice and procedure, but...