Stonebraker v. Littleton
| Citation | 86 A. 150,119 Md. 173 |
| Parties | STONEBRAKER v. LITTLETON. |
| Decision Date | 07 December 1912 |
| Court | Maryland Court of Appeals |
Appeal from Circuit Court, Washington County.
Action by J. Ellsworth Stonebraker against William B. Littleton. From a judgment for defendant, plaintiff appeals. Affirmed.
Argued before BOYD, C.J., and BRISCOE, PEARCE, BURKE, THOMAS PATTISON, and STOCKBRIDGE, JJ.
H. H Keedy and Frank G. Wagaman, both of Hagerstown, for appellant.
J. A Mason, of Hagerstown, for appellee.
John W Stonebraker, of Washington county, owned and operated a paper mill located in that county, and traded under the name of the Antietam Paper Company. The appellee on this record, William B. Littleton, was at that time in his employ. On the 4th day of March, 1905, Stonebraker, Littleton, and certain other persons formed a corporation under the name of the Antietam Paper Company of Washington County, and on the same day this corporation purchased and took over the paper mill and business of Stonebraker. The record does not show what valuation was placed upon the mill and its business; but it states that the entire capital stock was contributed by Stonebraker. The appellee was anxious to own 20 shares of the capital stock of the corporation, and Stonebraker also desired that he should own that number of shares; but the appellee was not able to pay cash for the stock, and accordingly he and Stonebraker entered into a contract under seal, dated the 4th day of March, 1905, providing for the sale of 20 shares of stock to the appellee, and fixing the method of payment therefor. The contract recited the formation of the corporation, and the contribution of the entire capital stock by Stonebraker; and, in consideration of the matters and things to be done by Littleton, Stonebraker agreed that he, Littleton, should have and receive 20 shares of capital stock of the corporation of the par value of $1,000 per share, and for which there should be issued to him certificates therefor. The contract then recited that the appellee desired to secure Stonebraker in the payment of $20,000 "the estimated value and worth to the said William B. Littleton of his said interest in the said company."
The material provisions of said agreement are here transcribed:
(1) That the said William B. Littleton shall have and receive 20 shares of stock in the said Antietam Paper Company of Washington County, and that certificates therefor shall be issued to him.
(2) That the said William B. Littleton hereby acknowledges himself to be indebted unto the said John W. Stonebraker in the sum of $20,000 by reason of the ownership by him of said stock, which he promises and agrees to pay to the said John W. Stonebraker, from and out of the dividends which may from time to time be declared to him on said stock, he agreeing that at least one-half of the dividends declared to him thereon in each and every year shall be paid to the said John W. Stonebraker, and that the president of said company shall draw the check of the company therefor and make the same payable to the said John W. Stonebraker, and the amount thereof shall be charged against the dividends declared to the said William B. Littleton.
(3) That the stock of the said the Antietam Paper Company and the certificates therefor to be issued to the said William B. Littleton, as aforesaid, shall be transferred and delivered by the said William B. Littleton to the said John W. Stonebraker as collateral security for the payment of the aforesaid sum of $20,000, and shall so remain and be held by the said John W. Stonebraker until the payment by the said William B. Littleton of said sum to the said John W. Stonebraker, and thereupon the said stock shall be reassigned to the said William B. Littleton.
(3A) That the said John W. Stonebraker shall allow to the said William B. Littleton interest at the rate of 4 per cent. per annum on all payments made by him on said indebtedness, which allowance of interest shall be credited and allowed to him as payment in the reduction of his said indebtedness.
(4) That the said William B. Littleton shall have the right to make payments in such sums and in such manner as he may desire in payment of his said indebtedness to the said John W. Stonebraker in addition to the payment herein agreed by him to be made.
(5) Should the said John W. Stonebraker die before the said William B. Littleton shall have paid his said indebtedness to the said John W. Stonebraker, the right is hereby expressly given to the said William B. Littleton to continue his payments as hereinbefore set out to the executors or administrators of the said John W. Stonebraker, and no demand shall be made by said executors or administrators for payment otherwise than as set forth in the second paragraph hereof.
The stock was issued to the appellee, as provided in the third item of the contract, and was placed in the hands of Stonebraker as collateral security. Dividends on the stock have been declared as follows:
| July 7, 1906, | 5 per cent. amounting to | $1,000. |
| March 9, 1907, | 5 per cent. amounting to | $1,000. |
| June 8, 1908, | 5 per cent. amounting to | $1,000. |
| July 15, 1909, | 4 per cent. amounting to | $800. |
| March 7, 1910, | 5 per cent. amounting to | $1,000. |
| March 6, |
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