Weber v. Nonpareil Baking Co.

• Decision Date: 28 January 1929
• Docket Number: 12241.
• Citation: 274 P. 932,85 Colo. 232
• Parties: WEBER et al. v. NONPAREIL BAKING CO.
• Court: Colorado Supreme Court

274 P. 932

85 Colo. 232

WEBER et al. v. NONPAREIL BAKING CO.

No. 12241.

Supreme Court of Colorado

January 28, 1929

Department 2.

Error to District Court, Pueblo County; James A. Park, Judge.

Action by the Nonpareil Baking Company against John Weber and others. Judgment for plaintiff, and defendants bring error. On application for supersedeas.

Affirmed.

H. P. Vories and V. N. Stinson, both of Pueblo and W. D. Wright, Jr., of Denver, for plaintiffs in error.

L. E Langdon and V. G. Seavy, both of Pueblo, for defendant in error.

BURKE J.

These parties appeared in reverse order in the trial court, and are hereinafter so referred to.

Plaintiff secured an injunction against defendants prohibiting them from violating a contract by which John Weber had agreed not to engage in the retail bakery business. To review that judgment this writ is prosecuted. The cause is now before us on application for supersedeas, and both parties request that our judgment thereon be final.

John Weber was engaged in the retail bakery business in Pueblo. He sold to plaintiff's assignor under contract not to re-enter said business in that county. Thereafter his wife and his son and daughter organized the Weber Bakery Corporation. It and they were joined with John Weber as defendants herein. Before the new company could get under way this action was instituted. The complaint charges, and the court found, that said company was in fact John Weber, who was resorting to this scheme of a family owned corporation to enable him to evade his contract, and permanently enjoined all of them.

Defendants say: (1) Their demurrers to the complaint, for want of facts should have been sustained; (2) their motion to dismiss for failure of plaintiff's assignor, a corporation, to file its annual report in 1927 and 1928, should have been sustained; (3) the judgment is not supported by the evidence; (4) the injunction issued is too sweeping in its provisions.

1. The contention of an insufficient plea of facts rests upon the assumption that the complaint is limited to the expression of a fear that John Weber will, if not restrained, breach his contract. There is no such limitation. The complaint specifically charges the perfecting of all the details of the plan, and the manufacture of all the requisite machinery, for such a breach.

2. Defendants admit their position concerning the failure of the corporation to file its report is contrary to Smith et al. v. Highland Mary M. M. & P. Co., 82 Colo. 288-292, 259 P. 1025, but say that the authority is bad law. We see no reason to modify or overrule it.

3. Defendants contend that the evidence of probable breach of the contract likewise went no further than suspicion. Aside from the palpable fiction of this family corporation organized to take over the business of the head of the family and operate it in his presence and under his management there is evidence that its only actual capital was $200, half of which was put up by Weber, Jr., and the other half borrowed; that all of its equipment was procured from John Weber for $100 cash, plus certain mortgages assumed, plus an agreement to pay John Weber the balance of $3,400.19 in monthly installments of $50 each; that John Weber was to work for the corporation 'and all have equal rights'; that Weber said he had entered into a contract with the Piggly-Wiggly Grimes Company (which is the contract here alleged to be the contract of the Weber Corporation); that he was moving his business up on Main street (the location of the business of the Weber Corporation); and that nobody could stop him from going into the bakery business. We think this evidence is ample to support the judgment, if the plaintiff was held to the strict rule of proof by preponderance ordinarily applicable. But it should be borne in mind that the very facts and circumstances here disclosed make necessary the rule of evidence applied in cases of transfer of property between near relatives where the transfer results in the defeat of creditors, and can only be upheld on a showing of good faith and adequate consideration. This transaction was so questionable on its face that plaintiff was required to do nothing more than lay before the court its bald outlines, whereupon the burden devolved upon defendants to clearly establish its bona fides. That burden they have not...