Moore v. Manufacturers Sales Co., 67
| Decision Date | 05 January 1953 |
| Docket Number | No. 67,67 |
| Citation | 56 N.W.2d 397,335 Mich. 606 |
| Parties | , Blue Sky L. Rep. P 70,197 MOORE v. MANUFACTURERS SALES CO. et al. |
| Court | Michigan Supreme Court |
Balgooyen, Parmenter & Forsythe, Muskegon Heights, for appellant.
Street & Sorensen, Muskegon, for appellees Manufacturers Sales Co., Fred L. Rodoff and Mildred S. Rodoff.
Alexis J. Rogoski and Robert Bunker Rogoski, Muskegon, Lester S. Smith, Detroit, for appellees Joe S. Strifling and Syd F. Strifling.
Before the Entire Bench.
Charles F. Moore, plaintiff, brought suit against Manufacturers Sales Company, a Michigan corporation, Fred L. Rodoff, Mildred S. Rodoff, Joe S. Strifling and Syd F. Strifling, defendants, to recover $12,000, the amount paid by plaintiff for 70 shares of preferred stock and 50 shares of common stock, each class of shares having a par value of $100 per share. Recovery is sought on the claim that each of the defendants participated in inducing plaintiff to purchase the stock, which had not been accepted for filing by the Michigan Corporation and Securities Commission in accordance with the Blue Sky Law, C.L.1948, § 451.101, et seq.; Stat.Ann. § 19.741, et seq. Corporate defendant apparently was a closed corporation with a half dozen or less stockholders. Plaintiff was willing to invest in it but wanted a position where he would receive a fair salary and also participate in the management. For almost a month he considered the investment and also had legal advice in regard to it. He acknowledges that he had had some experience in corporate matters. A contract was finally agreed upon. The corporation was not in good financial condition and defendants Strifling agreed to surrender and sell back to Rodoff $10,000 of preferred stock and notes of $9,400 representing amounts due them from the company for the sum $100, all of which Rodoff was to sell to the corporation for $100. The preferred stock was returned to the treasury of the company, and was reissued to plaintiff. The contract, as drawn, provides that plaintiff was to become secretary and treasurer and a director of the company. Plaintiff attended a stockholders' meeting on April 26, 1950. Mr. and Mrs. Strifling did not attend the meeting as Mr. Strifling was recovering from a very serious sickness. However, they had signed a waiver of notice of the meeting. They claimed that they had absolutely nothing to do with the sale of the stock to plaintiff. They did surrender $10,000 of preferred stock for a nominal amount and released the company from an obligation, all in order to restore the company to solvency. A fair inference is that they were motivated by friendship for Rodoff who had been, and continued to be, largely in control of the corporation's affairs. On the same morning, after the stockholders' meeting took place, at which plaintiff was elected director and the contract for employment was entered into, a directors' meeting was held and plaintiff was elected secretary and treasurer of the company. It was not until after this directors' meeting that the stock was issued to plaintiff, he signing his own stock certificate. There is no question but that he had ample opportunity to make an examination of the company's affairs. The books evidently omitted certain liabilities but it is doubtful if this materially affected the company's condition. Plaintiff does not claim any fraud in his pleadings. In June, 1950, he admitted knowing all about the financial condition and he also told defendants Strifling that he was still of the opinion that the business would become profitable. On July 2, 1950, at a meeting of the directors, plaintiff voted himself an increase of salary. On July 27, 1950, one Harold A. Silverman, who was a stockholder in the company, brought suit to recover $6,000, claiming that he had purchased stock that had not been accepted for filing by the Michigan Corporation and Securities Commission under the Blue Sky Law. Thereupon the bank account of the company was transferred to plaintiff's name so as to avoid its being 'attached' by Silverman. Plaintiff continued in the employ of the company. On December 26, 1950, he began the present action against the defendants, basing his entire claim on the violation of the Blue Sky Law. However, he did not leave the employ of the company until February, 1951. Just how much salary he received is not disclosed by the record. Prior to the beginning of this suit he seized $2,200 worth of salable merchandise to reimburse himself for loans made to the company.
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...of issuer and issuer had changed its position by reducing the mortgage and improving the property); Moore v. Manufacturers Sale Co., 335 Mich. 606, 611, 56 N.W.2d 397, 399 (1953) (buyer estopped where he did not complete the purchase until after he had been elected secretary and treasurer o......
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De Polo v. Greig
...his subsequent conduct establishes an estoppel. See Schrier v. B. & B. Oil Co., 311 Mich. 118, 18 N.W.2d 392, and Moore v. Manufacturers Sales Co., 335 Mich. 606, 56 N.W.2d 397. DePolo was not merely a purchaser of stock but he took an active interest in the corporation even though he did n......
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...duty to comply with the securities' regulations, to retain the purchase price. Schrier v. B&B Oil Co., supra; Moore v. Manufacturers Sales Co., 335 Mich. 606, 56 N.W.2d 397 (1953); DePolo v. Greig, 338 Mich. 703, 62 N.W.2d 441 (1954). Using somewhat different reasoning to reach the same res......
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James v. Erlinder Mfg. Co.
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