Reilly v. Korholz, 17857

• Citation: 320 P.2d 756,137 Colo. 20
• Decision Date: 20 January 1958
• Docket Number: No. 17857,17857
• Parties: Anthony E. REILLY and Margaret Regan Reilly, Plaintiffs in Error, v. Herbert F. KORHOLZ, Clarence O. Dimmock, Jr., Rock Wool Insulating Company, a corporation, Reconstruction Finance Corporation, a corporation, Clayton A. Becker, Oliver Gould, X Y Z Corporation, First Doe and Second Doe, Defendants in Error.
• Court: Colorado Supreme Court

Page 756

320 P.2d 756

137 Colo. 20

Anthony E. REILLY and Margaret Regan Reilly, Plaintiffs in Error, v. Herbert F. KORHOLZ, Clarence O. Dimmock, Jr., Rock Wool

Insulating Company, a corporation, Reconstruction Finance

Corporation, a corporation, Clayton A. Becker, Oliver Gould,

X Y Z Corporation, First Doe and Second Doe, Defendants in Error.

No. 17857.

Supreme Court of Colorado, En Banc.

Jan. 20, 1958.

Rehearing Denied Feb. 10, 1958.

James L. Tilly, Darrell J. Skelton, Alfred P. Davis, Denver, William L. Walker, Earl Ludlam, Lincoln, Neb., Thomas J. Gibson, for plaintiffs in error.

Petersen & Evensen, Seavy & Seavy, Pueblo, for defendants in error.

HALL, Justice.

The parties appear herein in the same order as in the trial court, and we shall refer to them as plaintiffs and defendants, or by name, and shall refer to the defendant Reconstruction Finance Corporation as RFC.

Plaintiffs, on January 16, 1952, filed their complaint in the District Court at Pueblo, and charged the defendants generally with unlawfully conspiring, during the summer of 1951, to secure from plaintiffs all of their stock in the Rock Wool Insulating Company and claims for money due them from said company and to take possession and control of said company; that defendants did by such unlawful means cause the plaintiffs to sign documents labeled Exhibit 'O', dated at New York August 3, 1951, and Exhibits '2' and '3' dated at Pueblo, Colorado, September 26, 1951, whereby Korholz obtained in his own name as owner 833 1/3 shares, of a total of 2500 shares issued and outstanding, of the stock of said Rock Wool Insulating Company and obtained in his name as trustee 507 1/6 shares of said stock, the property of plaintiffs, and also obtained an assignment from plaintiffs of their alleged claims against the corporation for monies due them from the corporation in the amount of $43,000, evidenced by a promissory note given by Rock Wool Insulating Company to plaintiff Anthony E. Reilly; that he procured plaintiffs' resignations as officers and directors of said company. All of which, it is alleged, was accomplished without consideration by means of fraud, duress, threats, intimidation and force, and at a time when Anthony E. Reilly was ill and suffering from influenza.

Plaintiffs pray that the stock transfers, assignments of claims and resignations be set aside, and that they be restored to their previous positions as owners of said stock and claims and as officers and directors, or, in the alternative, that they recover compensatory damages of $650,000, exemplary damages of $500,000, and have body executions against the defendants Korholz, Becker and Gould.

From the record it appears that the defendant RFC at the time the suit was filed held 1340.5 shares of the stock of the Rock Wool Insulating Company, which stock had been issued to and was then owned by plaintiffs, and which had been put up by plaintiffs as additional collateral with the RFC for certain loans made by it to the Rock Wool Insulating Company; that prior to the trial it had relinquished all claims to said stock and had deposited the certificates representing said stock with the clerk of the court to be by him held pending final disposition of the case. Thereupon, without objection, the case was dismissed as to the RFC. No service was ever had on defendants Clarence O. Dimmock, Jr., X Y Z Corporation, or First Doe and Second Doe, and the case as to these defendants was dismissed without prejudice and without objection. None of these defendants appears herein and each is improperly designated as a party to this proceeding.

The defendants Korholz, Becker, Gould and Rock Wool Insulating Company answered and denied all allegations of fraud, duress, etc., and set forth in detail events leading up to the execution of the documents providing for the transfers of stock and claims and resignations of the plaintiffs, and set forth the alleged considerations for the transfers and resignations.

At plaintiffs' request, trial was to a jury, and after right days of taking testimony plaintiffs rested and stated that they abandoned their claim for compensatory and exemplary damages and body judgments, and relied entirely upon their equitable rights to the stock, their claims for money owing, and their positions as officers and directors; whereupon the jury was, by agreement, discharged. Testimony in behalf of defendants was taken and also rebuttal testimony.

On September 8, 1955, the trial court entered detailed findings of fact and conclusions of law and entered judgment for defendants.

The court, among other things, found: (a) that the defendants did not conspire to secure plaintiffs' stock and control of the corporation; (b) that no fraud, duress, threats or intimidation was practiced by defendants; (c) that the plaintiffs had voluntarily resigned their positions; (d) had voluntarily executed Exhibits 'O', '2' and '3', whereby the stock in question was agreed to be transferred, and (e), that the defendant Korholz had complied with his agreement to lend financial aid to the Rock Wool Insulating Company, and that the same constituted a good and valuable consideration for the stock transfers and resignations.

The court decreed that defendant Korholz was entitled to have transferred to him as his own 833 1/3 shares of the capital stock of the Rock Wool Insulating Company, then standing in the name of Anthony E. Reilly; that plaintiffs' agreements to assign the balance of their stock, 507 1/6 shares, to Herbert F. Korholz, as trustee, 'are valid and of full force and effect.' The court in its conclusions of law stated:

'The duties of the said defendant Korholz, as trustee, after receiving the stock referred to in paragraph 4 [833 1/3 shares] are not determined herein.'

Plaintiffs urge eight reasons for reversal. Reasons numbered 1, 2 and 8 are to the effect that the court erroneously determined questions of fact on which the evidence was in conflict. Counsel do not contend that the evidence is insufficient to sustain the court's findings, but take the untenable position that the trial court should have believed the testimony of plaintiffs and should have disbelieved the testimony of all the other witnesses, including that of several of plaintiffs' witnesses. At the risk of appearing dreary and trite, we reiterate our uniform pronouncement that findings of fact made by the trier of the facts, court or jury, will not be disturbed if supported by credible testimony. All of the court's findings of fact are amply supported by evidence in the record and will not be disturbed.

Point No. 4, presented and argued, is that:

'The court erred in finding that Plaintiffs' Exhibit 'O' granted an option to buy 833 1/3 shares of stock in Rock Wool Insulating Company and that Exhibit 'O' was capable of being specifically enforced.'

Nowhere in the record do we observe any finding that Korholz had an option to buy any stock; no purchase or sale was contemplated. Reilly agreed to transfer, without cost, 833 1/3 shares of stock to Korholz on condition that Korholz forthwith advance $3,500 to meet a then due payroll of Rock Wool Insulating Company (this sum was advanced), and on the further condition that Korholz

'advance or cause to be made available to said corporation, financing to the extent of one hundred thousand dollars * * *.'

It is noted that no time was fixed within which the specified financing was to be provided, and the trial court properly held that this required it to be furnished within a reasonable time. The evidence supports the court's finding that the financing was furnished within a reasonable time and in compliance with, and in fulfillment of, the contractual obligation of Korholz, who thereupon became the owner of and entitled to the 833 1/3 shares of stock without cost as provided in said contract--Exhibit 'O'.

Why counsel argue that the contract was not capable of being specifically enforced is not clear. The defendants did not seek specific performance; in fact the defendants asked that plaintiffs' complaint be dismissed--nothing more. The court did not grant or undertake to grant specific performance of anything. Certificates for the 833 1/3 shares of stock issued to the Reillys and by them endorsed in blank had been released by the RFC and deposited with the clerk of the court. After the judgment herein and after expiration of the stay of execution, said certificates were, on November 8, 1955, surrendered to the corporation and by it canceled, and on the same day the corporation issued and delivered to Korholz a new certificate for 833 1/3 shares, and issued and delivered to Korholz, as trustee, an additional certificate for 507 1/6 shares. Specific performance was neither requested nor granted and all argument with reference thereto is foreign to any issue presented by the record.

Point No. 5, presented and argued, is:

'The court...