Thompson v. Thompson

• Decision Date: 30 December 1948
• Docket Number: 16162.
• Citation: 51 S.E.2d 169,214 S.C. 61
• Parties: THOMPSON et al. v. THOMPSON et al.
• Court: South Carolina Supreme Court

51 S.E.2d 169

214 S.C. 61

THOMPSON et al. v. THOMPSON et al.

No. 16162.

Supreme Court of South Carolina

December 30, 1948

Robert McC. Figg, Jr. and Sinkler & Gibbs, all of Charleston, for appellants.

Joseph Fromberg and Paul M. McMillan, both of Charleston, for respondents.

OXNER Justice.

This is an appeal by defendants from (1) an order refusing their motion to require plaintiffs to make the complaint more definite and certain by separately stating the causes of action alleged to have been improperly jumbled, (2) an order overruling a demurrer to the complaint, and (3) a general order of reference.

C. O Thompson, who was engaged in conducting sightseeing tours in the City of Charleston, died intestate on November 19, 1936 leaving as his sole heirs at law a widow, Mable S. Thompson and four children, namely, Cornelius Owen Thompson, Jr. Allen J. Thompson, Catherine Thompson Lait, and Daisy Thompson McDowell. On December 19, 1936, the widow was appointed administratrix of the estate. She soon discovered that the equipment used in the business of the intestate was heavily mortgaged and the estate was hopelessly insolvent. Shortly thereafter Cornelius Owen Thompson, for the benefit of himself and the other heirs, took over the operation of the business formerly conducted by his father and later purchased most of the assets of the estate. Subsequently these assets were sold and transferred to a corporation known as Gray Line Tours, Inc. which was organized by the widow and Cornelius Owen Thompson. Beginning in April, 1937, the sight-seeing business was carried on by this corporation for the benefit of the widow and children. On September 6, 1938, the parties, being desirous of making a family settlement defining and setting forth their respective rights, entered into a written agreement under which the capital stock of the Gray Line Tours, Inc., consisting of thirty shares, was to be divided by issuing six shares to Cornelius Owen Thompson and five shares, each, to the other three children and the widow, leaving unissued four shares which were to be held as treasury stock. No stock certificates were to be issued, however, unless the parties entered into an agreement whereby any stockholder desiring to sell his stock would first offer it to the other stockholders 'at the same price which has been offered to him.' It was further agreed that Cornelius Owen Thompson should receive a weekly salary to be fixed by the board of directors and that the net earnings of the corporation should be 'distributed annually as follows: One-fourth (1/4) to each Mabel S. Thompson, Catherine C. Lait, Daisy Thompson and Allen Thompson.' It was stipulated, however, that there should be no distribution 'from the net earnings until the capital surplus fund shall amount to $1000.00 in cash, nor shall there be any distribution in any year unless this fund shall have $1000.00 in cash.' Apparently a yacht and speed boat formerly owned by the intestate were not included in the assets sold to this corporation. The agreement provided that the revenues derived from the operation of these boats should be paid to Cornelius Owen Thompson during his lifetime and upon his death the boats were to become the sole and exclusive property of the widow and her children then surviving. It was acknowledged in the agreement that Cornelius Owen Thompson and the widow had properly accounted to the other heirs for all their 'acts and doings of the affairs of the said C. O. Thompson, deceased or otherwise', and these two parties were released and discharged 'from any further liability thereunto arising.'

This action, which was commenced in May, 1948, is brought by three of the children against their brother, Cornelius Owen Thompson, and the following corporations: Gray Line Tours, Inc., Gray Line of Charleston and Orangeburg Transit Company. The widow is not made a party. After setting forth in full the agreement above referred to, plaintiffs allege that by virtue thereof they became stockholders in the Gray Line Tours, Inc.; that the Gray Line of Charleston and the Orangeburg Transit Company are South Carolina corporations which were 'formed from the assets and profits of Gray Line Tours, Inc.'; and that defendant Thompson has erected and paid for out of the assets and profits of the Gray Line Tours, Inc., a building for the business at a cost of at least $50,000.00, to which he holds title individually. Plaintiffs further allege that during the preceding ten years they received from their brother, Cornelius Owen Thompson, about $800.00 but have been paid no dividends from the Gray Line Tours, Inc., although the earnings of said corporation have annually exceeded the sum of $1000.00.

The remaining paragraphs of the complaint are as follows:

'7. That the Plaintiffs need the income and dividends from the Gray Line Tours, Inc., on which to live, and have demanded from the Defendant, Cornelius Owen Thompson, an accounting and inspection of the books and accounts of Gray Line Tours, Inc., which has been refused, and such accounting and inspection of the books is necessary to determine the exact amount due Plaintiffs, which amount Plaintiffs allege on information and belief is large, which accounting is complicated and difficult covering ten years of transactions, and the amount cannot be ascertained except by the aid of this Honorable Court to require an accounting.

'8. That the Defendant, Cornelius Owen Thompson, as manager and President of Gray Line Tours, Inc., a corporation under the laws of the State of South Carolina, and as President of the other Defendant corporations, has been conducting the said business for the benefit of the Plaintiffs herein, and of Mabel S. Thompson; and they are entitled to all profits from the operation of the said business, including the profits and assets which were invested by the said Cornelius Owen Thompson in the building; and while the legal title to the said properties and assets may be in Cornelius Owen Thompson, he holds the same only as Trustee for these Plaintiffs and Mabel S. Thompson, and the Plaintiffs have no adequate remedy at law to reach said properties and assets, or to collect their claims from the said Cornelius Owen Thompson, without the aid of this Honorable Court.

'9. That the said Cornelius Owen Thompson has failed and refused to give these Plaintiffs any accounting of his actings and doings as their Trustee for the properties of these Plaintiffs, and the Plaintiffs cannot accurately determine the amounts due them, except by the aid of this Honorable Court for an accounting.'

The prayer is '(1) For an accounting of the affairs of Gray Line Tours, Inc., and for all investments made from the assets and profits of the said corporation; (2) For an accounting of the actings and doings of the Defendant, Cornelius Owen Thompson, as Trustee for these Plaintiffs; (3) For a judgment for such amounts as this Court finds due to these Plaintiffs by Defendants; (4) For such other and further relief as to this Court seems just and proper.'

Plaintiffs contend, and the court below held, that the complaint states only one cause of action which is for an accounting against Cornelius Owen Thompson. They assert in their brief that the action is against their brother 'for their interests in the estate of their father as provided for in the agreement'; that 'there is no cause of action alleged against the said corporations' which 'were made parties to put them on notice that the plaintiffs claimed an interest in their assets'; that the action 'is not for dividends, nor for any distribution of...