Pattison v. Brydon

• Decision Date: 21 April 1926
• Docket Number: 26.
• Citation: 133 A. 328,150 Md. 575
• Parties: PATTISON v. BRYDON ET AL.
• Court: Maryland Court of Appeals

133 A. 328

150 Md. 575

PATTISON v. BRYDON ET AL.

No. 26.

Court of Appeals of Maryland

April 21, 1926

Appeal from Circuit Court, Allegany County, in Equity; Albert A Doub, Judge.

"To be officially reported."

Suit by Carroll Pattison against Howard P. Brydon and another. From a decree dismissing his bill of complaint without prejudice plaintiff appeals. Affirmed.

Argued before BOND, C.J., and URNER, ADKINS, OFFUTT, DIGGES, PARKE and WALSH, JJ.

Horace P. Whitworth, of Westernport, and Walter C. Capper, of Cumberland, for appellant.

Taylor Morrison, of Cumberland (Harry G. Fisher, of Keyser, W. Va and A. Taylor Smith, of Cumberland, on the brief), for appellees.

ADKINS J.

The bill of complaint in this case alleges that in the year 1915 the plaintiff and defendants organized a corporation known as "the Calendonia Coal Company," of which E. Richard Brydon was made president and Howard P. Brydon secretary and treasurer, and they together with the plaintiff owned all the stock in the proportion of one-third each; that a lease, expiring in 1922, was obtained by said company of a tract of big vein coal situated near Barton, Allegany county, Md., and that under said lease the company operated and mined the coal until some time in the year 1923; that the lease, after its expiration in 1922, was renewed in the names of the defendants instead of the name of the said company, without the knowledge of the plaintiff; that until July, 1920, plaintiff handled and sold all the coal which was mined by said company, when the defendants, having established themselves in the coal brokerage business under the name of H. P. Brydon & Bro. (an incorporated company owned by the defendants), arbitrarily refused to any longer permit plaintiff to receive the coal mined by the Caledonia Coal Company, but handled and shipped the coal themselves, and plaintiff, from that time until after December 27, 1922, never received any statement of the affairs of the Caledonia Coal Company or any dividend or earnings therefrom, although business was active, and there were large profits earned by the company; that during this period there became due and owing to said company by H. P. Brydon & Bro. the sum of $315,777.29, and that during said time the Pekin Coal Company and the Coromandel Mining Company, each a corporation, owned and controlled by defendants, likewise became indebted to the Caledonia Coal Company for large sums of money; that plaintiff, seeking for an accounting from defendants and a distribution of accumulated earnings, was informed by defendants that they were engaged in consolidating the several coal properties in which they were interested, and desired the consent of the plaintiff that the coal mines and other tangible property of the Caledonia Coal Company be included in such consolidation, and, as a consideration for such consent, they agreed to account with him and distribute to him the entire volume of his stock in the Caledonia Coal Company upon his surrender and transfer of said stock to the defendants, and thereupon, in order to thus secure the fair value of his holdings in said company, he entered into a contract in writing with the defendants dated December 27, 1922, and set out in full in the bill of complaint, by which it was agreed that there should be conveyed the Brydon Bros. Coal Corporation then being formed all of the coal in place, mines, mining rights, and other tangible mining equipment and property owned by the Caledonia Coal Company, and used in connection with the operation of its coal mines, but not including its cash, accounts receivable, books, and records, for 380 shares of the preferred stock, and 380 shares of the common stock of the Brydon Bros. Coal Corporation, "which stock shall be issued in the amount of one-third thereof to Carroll Pattison, one-third thereof to E. Richard Brydon, and one-third thereof to Howard P. Brydon"; that the said Pattison should forthwith furnish to the officers of the Caledonia Coal Company a copy of the audit or account taken from his books, showing all commissions or profits retained by him from the sale of the coal of said company, the same being the difference in price between the amount received for said coal from the purchasers and the amount paid by him for said coal to the company, and at the same time he should be entitled to receive from the officers of said company any and all of the audits of said company made subsequent to this audit then in his possession; that the Brydons should purchase and pay for all the stock of the Brydon

Bros Coal Corporation to be issued to Pattison in exchange for property of the Caledonia Coal Company as elsewhere provided in the agreement, and purchase and pay for all of the stock of the Caledonia Coal Company now owned by the said Pattison, paying therefor one-third of the present fair market value of the property of the Caledonia Coal Company so sold and transferred to the Brydon Bros. Coal Company, plus one-third of the value of the remaining assets of the Caledonia Coal Company after the deduction of its liabilities; that, in case the parties could not agree upon the value to be paid for said stock, then its value should be determined by arbitration, all parties agreeing to be bound thereby; that one arbitrator should be appointed by Pattison and one by the Brydons, the two thus appointed to select a third, all of whom should be disinterested parties; that the arbitrators should have full power in ascertaining the fair market value of said stock, and to pass upon and settle any disputed matter between the parties or in connection with their mutual accounts with the Caledonia Coal Company, and, in general, to pass upon and determine all matters bearing upon the value of the assets of said Caledonia Coal Company or the value of the assets sold by it to the Brydon Bros. Coal Corporation, each of the parties agreeing to place in the hands of the arbitrators such of their respective books, papers, correspondence, accounts, vouchers, etc., as said arbitrators may desire or require in ascertaining the correct status of the finances of said Caledonia Coal Company; that Pattison should give to the Brydons, their auditor, or auditors, complete access to all his books, correspondence, and such like, in order that they may satisfy themselves of the correctness of the statement furnished by said Pattison with reference to the sales of coal made by him and shipped by the Caledonia Coal Company, and that the Brydons should forthwith give to Pattison, his auditor, or auditors, complete access to all the books, correspondence, and such like of the Caledonia Coal Company or other companies or individuals with whom it transacted business, provided same are in their possession or under their control, in order to ascertain the correctness of the books and audits of said company; that said Brydons, immediately upon the execution of the agreement, should place in the possession and control of said Pattison all of their stockholdings in the Caledonia Coal Company, being two-thirds, and, as soon as issued, all of the stock or other things of value given by the Brydon Bros. Coal Corporation for the property of the Caledonia Coal Company, the same to be held by the said Pattison as security for the performance by the said Brydons of their contract, said stock so held, upon the consummation of the agreement, to be...