Hyman Mercantile Co. v. Kiersky

• Decision Date: 08 December 1941
• Docket Number: 34739.
• Citation: 4 So.2d 881,192 Miss. 195
• Court: Mississippi Supreme Court
• Parties: HYMAN MERCANTILE CO. v. KIERSKY et al.

4 So.2d 881

192 Miss. 195

HYMAN MERCANTILE CO. v. KIERSKY et al.

No. 34739.

Supreme Court of Mississippi

December 8, 1941

Lotterhos & Travis, of Jackson, and Hutchison & Hutchison, of Summit, for appellants.

A A. Cohn, of Brookhaven, and W. G. McLain, of McComb, for appellee.

ANDERSON Justice.

Appellees filed their bill in the Chancery Court of Pike County against appellant, a mercantile corporation, and two of the stockholders and officers of the corporation, W. K. Ransom and his wife, Gladys Ransom, to have the corporation dissolved and liquidated and for that purpose a receiver be appointed to take charge. There was a trial on bill, answer and proofs resulting in a decree granting the relief prayed for. From that decree the corporation and all of its stockholders, except the complainants, appeal.

The corporation was organized, started and carried on for many years by John Enos, deceased. All of the stockholders, except the complainants, are related to him by either blood or marriage. The stock consists of 450 shares, par value of $45,000. The stockholders related to John Enos either by blood or marriage are W. K. Ransom and wife Gladys Ransom the Estate of W. M. Davis, John Mercier, W. F. Cunningham and his wife. The complainants, Bernard Kiersky and Miss Pauline Kiersky, own $11,500 of the stock par value, and the other stockholders own the balance of $33,500.

The bill charges that for more than forty years Bernard Kiersky had been an officer and employee of the corporation, that sometime prior to the first of January, 1938, he was vice-president and salesman in the store. That at the January, 1938, meeting of the stockholders he was not re-elected vice-president and not re-employed as a salesman. The bill does not charge that the corporation is insolvent but that it is headed for insolvency on account of the mismanagement of its stockholders, directors and officers who consist entirely of members of the John Enos family. The bill charged and the evidence shows that at the January, 1938 meeting of the stockholders Mrs. Ransom was elected president and her husband secretary-treasurer of the corporation and that they took charge and managed its affairs up to the filing of the bill in this cause and the trial in the Chancery Court. The charges of mismanagement, which the evidence supported in some degree, are as follows: That the plan of the Enos family is to manage the affairs of the corporation so as to "freeze out" the Kierskys and acquire their stock; that Mrs. Ransom during one year received from the corporation a salary of $120 per month without doing anything much to earn it, and that without authority from the stockholders she raised the salaries of two clerks in the store; that Ransom is unfit to manage the business because while a citizen of Birmingham, Alabama employed in a brokerage business there, through "fraudulent trading" he lost for his employer something like $30,000 which his surety, United States Fidelity & Guaranty Company, had to pay for him, that later he was released from his debts through bankruptcy proceedings; that he came to Pike County and married Miss Gladys Enos, and in 1938, without any previous experience, in connection with his wife took charge of and managed the affairs of the Hyman Mercantile Company; that during such management he engaged in gambling in cotton future contracts for the company consisting of "selling cotton on call"; that the Hyman Mercantile Company owns $8,000 stock in the Cotton Compress Company at Summit; that Ransom refused to permit the stockholders of the Compress Company to elect his wife on the Board of Directors thereby neglecting the interest of the Mercantile Company; that Ransom in and around Summit is unpopular, resulting in antagonism against him and the business among other business men of that place as well as the public; that Bradstreet & Dun changed their rating of the corporation after Ransom took charge; that the books of the company are kept by Mercier, who is not competent for that purpose; that Ransom is extending credit in substantial amounts to customers who are unworthy of it; that the company owns considerable farming...