Stillinovich v. Ottilia Villa Inc.

• Decision Date: 14 May 1963
• Docket Number: No. 9812,9812
• Citation: 14 Utah 2d 222,381 P.2d 210
• Parties: d 222 Millie STILLINOVICH et al., Plaintiffs and Appellants, v. OTTILIA VILLA, INC., et al., Defendants and Respondents.
• Court: Utah Supreme Court

Page 210

381 P.2d 210

14 Utah 2d 222

Millie STILLINOVICH et al., Plaintiffs and Appellants, v. OTTILIA VILLA, INC., et al., Defendants and Respondents.

No. 9812.

Supreme Court of Utah.

May 14, 1963.

Quentin L. R. Alston, Louis M. Haynie, Salt Lake City, for appellants.

Jensen, Jensen & Bradford, Salt Lake City, George S. Ballif, Provo, for respondents.

HENRIOD, Chief Justice.

Appeal from a summary judgment dismissing plaintiffs' complaint. Affirmed with costs to defendants.

A Las Vegas motel was acquired by defendant, Ottilia Villa, Inc., the plaintiffs receiving stock therein as an exchange for their equitable interest in the motel which was being purchased under an installment contract. Late in 1958 the corporation became hard-pressed to meet obligations on what apparently was a losing proposition. At a stockholders' meeting the directors were authorized to ask for a voluntary assessment, or contribution, of 30 cents per share, and a letter was directed to the shareholders to that effect, payable within 10 days, conditioned on a sale to be effected to pay off all existing obligations, if there was not sufficient response by stockholders. The response was negative, including plaintiffs'. Instead, two of the plaintiffs here, the Clingers, brought a class action to enjoin the sale. At a hearing on an order to show cause why the sale should not be enjoined, a stipulation was entered into, which, in effect, stayed the proposed sale for 2 1/2 weeks, with the express provision that plaintiffs, or the corporation, could find a suitable buyer to do at least the same thing as proposed by the Board or better. The stipulation provided that failing all this, the complaint could be dismissed with prejudice, which was done, for lack of a suitable buyer within the prescribed time. Thereafter Ottilia Villa was sold to the Spanish Trail Motel corporation on assumption by the latter of the former's obligations. Two of the defendants here, Young and Weight, who had no previous connection with Ottilia, furnished the consideration and the incorporation of the Spanish Trail corporation, and paid the plaintiffs Stillinovich and Krznovich $4,250 as 'Payment in full for $5,000, 8%, 10-year Debenture Bond issued by Ottilia Villa on September 1, 1957 and due on September 1, 1967, the obligation of which is assumed by Spanish Trail Motel; together with all other interest or claims of the undersigned in either of the above companies.'

Nearly three years later the Clingers, Stillinovich and Krznovich sued Ottilia company, its officers, and Young and Weight, alleging misrepresentation, conspiracy and mismanagement, praying that the motel be restored or alternatively, for damages based on its market value.

Plaintiffs based...