Tampa Water Works Co. v. Wood

Citation139 So. 800,104 Fla. 306
PartiesTAMPA WATER WORKS CO. v. WOOD.
Decision Date23 February 1932
CourtUnited States State Supreme Court of Florida

Suit by Walter Wood against the Tampa Water Works Company. From a decree in favor of the complainant, the defendant appeals.

Affirmed. Appeal from Circuit Court, Hillsborough County F. M. Robles, judge.

COUNSEL

Knight Thompson & Turner, of Tampa, for appellant.

Mabry Reaves & White, of Tampa, for appellee.

OPINION

ELLIS J.

R. D Wood & Co., a copartnership composed of Walter Wood and Stuart Wood, owned shares of the capital stock of the Tampa Water Works Company, a Florida corporation. In March, 1914, Stuart Wood died, and in 1920 the affairs of the copartnership, being managed by Walter Wood, as survivor, were placed in the hands of a receiver who transferred the stock in the Tampa Water Works Company to Walter Wood.

From 1902 to the date of Stuart Wood's death, 1914, the business of Tampa Water Works Company was managed by Stuart Wood, as a member of the copartnership of R. D. Wood & Co., which had control and management of the corporation. During his administration the corporation acquired several tracts of land nearby the city of Tampa, which were thought to be needed by the corporation in preparing for a water supply for the city as it grew. The title to several of these tracts was taken in the name of Stuart Wood, although acquired by him in his capacity of manager of the corporation and for its use and benefit.

The number of shares of stock in the Tampa Water Works Company transferred to Walter Wood in 1924 was 1,816. Six hundred shares of the stock were held by R. D. Wood & Co. which had originally been issued to Jeter & Boardman and by them assigned to R. D. Wood & Co. as collateral security. R. D. Wood & Co. held also 250 shares in addition.

In 1923, the Tampa Water Works Company was sold to the city of Tampa. The legal representatives of Stuart Wood, who were the Provident Life & Trust Company of Philadelphia and Edward R. Wood, Jr., a nephew of Stuart Wood, managed the affairs of the Tampa Water Works Company until about 1921 when the trust company was discharged as executor, leaving Edward R. Wood, Jr., sole executor in actual control of the Tampa Water Works Company and he has continued in control since.

In June, 1927, Walter Wood, individually and as surviving partner of R. D. Wood & Co., exhibited in the circuit court for Hillsborough county his bill against the Tampa Water Works Company to close up its affairs, distribute its assets among the stockholders; that all officers or stockholders which have defrauded or wronged the corporation or received an undue proportion of its assets be required to account for the same; that a receiver be appointed for the corporation, who shall take charge of all books, accounts, vouchers, money and deeds, papers and assets and that agents and officers of the corporation in possession of such documents and assets be required to deliver them to the receiver and be enjoined from interfering with the receiver in the discharge of his duties, who shall be authorized to prosecute all actions necessary to recover for the corporation the assets thereof dissipated and appropriated by Stuart Wood.

The bill alleges that Jeter and Boardman, who obtained the franchise to operate a waterworks plant in Tampa, procured the charter for the Tampa Water Works Company; that R. D. Wood & Co. acquired and held as collateral security over six hundred of the one thousand shares of the corporation outstanding and Wood & Co. assumed management of it with Stuart Wood, a member of the copartnership, as president and treasurer, and he continued in active management until his death in 1914; R. D. Wood & Co. acquired practically all the stock of the corporation; that Stuart Wood by certain transactions acquired, as more shares of the stock were issued, 2,341 shares, while there appeared in the name of Wood & Co. 1,816 shares of a total of 4,247 shares; that since the death of Stuart Wood his representatives have assumed to manage and control the corporation but in the interest of the estate of Stuart Wood and their own interests and regardless of R. D. Wood & Co. or the objects for which it became interested in the corporation. That Edward R. Wood, a nephew of Stuart Wood, one of the executors of Stuart Wood's will, was left in sole control of the corporation in 1921 and has been in actual control since; that some of the stock acquired by Stuart Wood and taken in his name was acquired with money of the corporation, likewise much of the land acquired and title taken in his name and others was acquired by him for the use of the corporation and with its funds, and such lands were subsequently sold by his executors and the proceeds of such sales applied to their own use and were not accounted for to the corporation; that money of the corporation was used by the executors of Stuart Wood to pay the taxes upon the lands; that some of the expense involved in investigating the lands so purchased was paid for with funds of the corporation which Stuart Wood did not charge to himself, although he did charge himself with the actual cost of the lands and the carrying charges of it; that the representatives of Stuart Wood have sold many of the properties so acquired at great profit amounting to many thousands of dollars which were not accounted for to the corporation, although the property sold was owned by the corporation and held in trust for it by the persons so disposing of it or those in whose names the title had been taken.

Those transactions, it is alleged, constituted mismanagement of the corporation's affairs and amounted to a fraud upon the complainant as a stockholder. The bill alleges that the Tampa Water Works Company has closed its active business, and nothing remains but to distribute its assets, and that the complainant has sought to obtain from the representatives of Stuart Wood, who control the assets of the corporation, a settlement of its affairs and an accounting of its assets, but Edward Wood, Jr., the sole representative of Stuart Wood, continues in possession of such assets as the corporation's nominal head and is dissipating its funds and assets, denies to complainant or R. D. Wood & Co. any right to participation in much of the company's assets or to an accounting therefor, and is squandering its assets under the pretended necessity of continuing the activities of the corporation.

An amendment to the bill alleges that Edward R. Wood, Jr., is not a resident of the state of Florida, but resides in Philadelphia in the state of Pennsylvania, and the Provident Trust Company is a Pennsylvania Corporation with offices in Philadelphia, and there is no person in Florida the service of a subpoena upon whom would bind them; that since the filing of the original bill the Tampa Water Works Company has brought into the jurisdiction of the court and deposited in the Exchange National Bank about $180,000. And as that sum must be disposed of by the court, it is essential to have before the court the representatives of the Stuart Wood estate, and that the 1,816 shares of stock described in the bill as in the name of R. D. Wood & Co. have been transferred to Walter Wood, complainant. A second amendment to the bill alleges that such shares of stock were the equitable property of Walter Wood at the time of the death of Stuart Wood.

The Tampa Water Works Company answered the bill averring the existence of conditions necessitating the continuance of the activities of the corporation which required maintaining an office at Tampa. It denies that R. D. Wood & Co. managed the Tampa Water Works Company, and avers that the activities of Stuart Wood in...

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    ...... . Proceeding. by L. D. McGregor, as receiver of the Tampa Water Works. Company, against the Provident Trust Company of ,. surviving trustee under the will of Stuart Wood, deceased,. and/or executor under the will of or on behalf of Edward R. ......
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