Stone v. Holly Hill Fruit Products, 6254.
| Decision Date | 09 March 1932 |
| Docket Number | No. 6254.,6254. |
| Citation | 56 F.2d 553 |
| Parties | STONE et al. v. HOLLY HILL FRUIT PRODUCTS, Inc., et al. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Robert R. Milam, of Jacksonville, Fla., for appellants.
A. G. Turner, of Tampa, Fla., R. B. Huffaker and M. H. Edwards, both of Bartow, Fla., and Ellis F. Davis, of Kissimmee, Fla., for appellees.
Before BRYAN, SIBLEY, and HUTCHESON, Circuit Judges.
The amended stockholders' bill of Edith L. Stone and four others owning altogether about 2 per cent. of the capital stock of Holly Hill Fruit Products, Inc., which was brought against the corporation and certain officers accused of misconduct and prayed for injunction, a receiver and general relief, was dismissed on motion of the corporation, and complainants appeal.
One ground of the motion was that the bill complains of corporate mismanagement and does not show that the complaining stockholders had exhausted their remedies within the corporation. The bill, filed a few days after the annual stockholders' meeting, alleges that in that meeting the officers had made no sufficient statement of the current corporate affairs and had, with the purpose of concealing their mismanagement, refused reasonable information asked by and for the complainants; that the directors had since re-elected an improper person as president, who with another director and a relative of the president as treasurer had been and still were an operating committee to whom the business was intrusted, and that the president was virtually in sole control; that excessive salaries were paid the president, treasurer, and others, while debts due by the corporation to customers for their fruit went unpaid, and debts due to the corporation by the president and his relatives and by companies controlled by him went uncollected; that the business was at a low ebb and the corporation about to become insolvent. These are grievances not peculiar to the complainants but affect alike all stockholders, and being primarily wrongs done to the corporation injure the complainants only indirectly as stockholders. The remedy for them lies in the first instance with the directors chosen by the stockholders to manage the corporate affairs. All the matters complained of existed and were known at the stockholders' meeting. The complainants should have appeared before the seven directors then chosen and urged their objection to the re-election of the president and treasurer; and should have informed them of the mismanagement by the operating committee, of the nonpayment to customers, of the excessiveness of the salaries paid to officers, and asked such further information about the business as they desired and were entitled to. The president was the only director drawing a salary. Only one other director was on the operating committee. No sufficient reason is alleged why the other five could not have been expected to act with fairness and honesty. That some resided at a...
To continue reading
Request your trial
-
Schein v. Chasen
...1968); Conlee Construction Co. v. Cay Construction Co., 221 So.2d 792 (Fla.App.4, 1969). See also, Stone, et al. v. Holly Hill Fruit Products, Inc., et al., 56 F.2d 553 (5 C.C.A., 1932), Duchaine, et al. v. Grosco Realty, Inc., 121 So.2d 679 (Fla.App.2, 1960). We note with interest that the......
-
Schein v. Chasen
...1968); Conlee Construction Co. v. Cay Construction Co., 221 So.2d 792 (Fla.App.4, 1969). See also, Stone et al. v. Holly Hill Fruit Products, Inc. et al., 56 F.2d 553 (C.C.A.5, 1932); Duchaine et al. v. Grosco Realty, Inc., 121 So.2d 679 (Fla.App.2, 1960). We note with interest that the Sec......
-
Glazer v. Glazer
...express statutory provisions or contemplate oppression against minority shareholders of a Florida corporation. See Stone v. Holly Hill Fruit Products, 5 Cir. 1932, 56 F.2d 553; Fla.Jur. § 196 The short of the enforceability issue is this: Although the validity of the agreement may be doubtf......
-
Levitan v. Stout
...disputes unless the ordinary corporate procedures are for some reason frustrated. As was said in Stone v. Holly Hill Fruit Products, Inc., 5 Cir., 56 F.2d 553, 554 — "* * * A stockholder, in taking stock in the ordinary corporation, submits, within the charter limits, to a guidance of the c......