Yreka United, Inc. v. Harrison
| Citation | 510 P.2d 775,95 Idaho 430 |
| Decision Date | 15 May 1973 |
| Docket Number | No. 11057,11057 |
| Parties | YREKA UNITED, INC., Plaintiff-Appellant, v. Phyllis W. HARRISON, Executrix of the Estate of Grace G. Harrison, Deceased, and Richard G. Magnuson, Administrator of the Estate of Lester S. Harrison, Deceased, Defendants-Respondents. |
| Court | United States State Supreme Court of Idaho |
Hull, Hull & Wheeler, Wallace, for plaintiff-appellant.
Brown, Peacock, Keane & Boyd, Kellogg, for defendants-respondents.
Yreka United, Inc., the plaintiff-appellant, instituted this action seeking return of 400,000 shares of its stock issued to Phyllis W. Harrison, 1 as the administratrix of the estate of Lester S. Harrison, deceased. The defendants-respondents generally denied the allegations of appellant's amended complaint. In the alternative, they counterclaimed, alleging that if the stock be ordered returned the appellant was indebted to the respondents on a series of five promissory notes, for principal and interest, a reasonable sum for attorney fees provided in said notes, and other sums paid towards the stock. Appellants generally denied the allegations of the counterclaim and, as an affirmative defense to the counterclaim asserted misrepresentation in the issuance of the promissory notes.
The cause was tried to the court sitting without a jury. The trial court made findings of fact, conclusions of law and entered judgment. The judgment ordered that the 400,000 shares of stock be returned by respondents to the appellant. The court also entered judgment in favor of respondents on the promissory notes for the principal balance of $44,492.26, accrued interest in the amount of $35,062.28 to date of judgment, $8,000 as attorney fees, and $6,135.22 without interest, which latter sum represented part of the consideration paid for the 400,000 shares of stock.
Appellant filed its motion to amend the findings, conclusions of law and judgment or in the alternative for a new trial, which motion was denied. Appellant has appealed from the judgment, and from the order denying its motion to amend or for new trial. For the reasons hereinafter expressed, this Court affirms the judgment and order of the trial court denying the motion to amend or for new trial.
Lester S. Harrison, during his lifetime, was an attorney at law, practicing at Kellogg. He engaged in an extensive practice involving a number of mining corporations, and he was instrumental in arranging the merger in 1957 of a number of mining corporations into Yreka United, Inc., the appellant herein. He also managed Equity Metals, Inc., a corporation which provided office space and transfer offices for various corporations, handled their stock transfers and performed bookkeeping and general office work for them.
In 1956 Lester S. Harrison was a director and officer of appellant and served as its president and director from 1959 until his death on April 15, 1966. Following his death, Phyllis W. Harrison, the daughter of Lester S. Harrison, served as president and director, and Grace G. Harrison, the widow of Lester S. Harrison served as a director.
The question of remuneration to Lester S. Harrison for his legal services in effecting the mergers of the other corporations with appellant was considered by appellant's board of directors on various occasions during the period of 1957 to 1964. On May 27, 1957, appellant's board of directors, at a special meeting considered the question of remuneration to Harrison for the services he had performed in effecting the merger of the companies. Under a tentative arrangement Harrison received 50,000 shares of appellant's stock with the understanding that a committee of the directors would investigate into the work Harrison had performed, and then later settle on the amount he was to be paid. It was understood that Harrison would return the 50,000 shares of stock when the final agreement was reached.
On July 8, 1957, the directors, at another special meeting again considered the question of Harrison's compensation. The pertinent parts of these minutes disclose the following action being taken:
'* * * As stated in the prior minutes, Mr. Harrison did not feel that this was adequate compensation, and a reservation had been made that he could return for cancellation the said 50,000 shares of stock if a more suitable arrangement could be worked out. Mr. Harrison now suggested that he be allowed a straight cash fee for $50,000; that he was aware of the fact that the corporation was unable to retire the obligation at this time and stated that he did not desire the entire amount paid during any one year, but that the same could be retired over a period of years * * *. That he would like to have the obligation placed in the form of promissory notes with interest not to exceed 6% and that he be given the privilege of returning to the treasury the 50,000 shares of stock formerly tendered him. After consideration and a review of everything that Mr. Harrison had done, and that he was receiving no promotion stock in any manner for his services performed, it was believed that he was justly entitled to receive the $50,000 cash fee in the form of corporation notes as suggested * * *. Whereupon the following resolution was introduced, to-wit:
'RESOLUTION
BE IT RESOLVED that Mr. Lester S. Harrison, Attorney at Law, of Kellogg, Idaho, be allowed a fee of $50,000 in cash for his services in perfecting this corporation and creating and bringing about a merger of the several properties in the Wardner area; that the payment thereof be deferred and promissory notes be given and issued him such as he may require, and that he be permitted to return to the treasury the 50,000 shares of stock formerly tendered him.
BE IT FURTHER RESOLVED that the president and secretary be and they hereby are authorized, ordered and directed to execute said notes for and on the part of this corporation by signing thereto the corporate name and affixing thereto the corporate seal, and that when executed, they deliver the said notes to Mr. Harrison.'
BE IT FURTHER RESOLVED that they accept for cancellation back into the treasury the 50,000 shares of stock formerly tendered to Mr. Harrison.
BE IT FURTHER RESOLVED that said officers be and they hereby are authorized to take other further necessary and proper steps that may be required in the premises to settle this obligation with Mrs. Harrison.'
A motion was then duly made, seconded and carried, that said Resolution be adopted.'
Following this resolution, Harrison returned the stock and the corporate officers issued him five promissory notes worth $10,000 each, due on demand, with 6% interest, and providing for payment of reasonable attorney's fees.
The minutes of the corporation reflect that the directors held a special meeting on May 12, 1964. These minutes reflect that Harrison was granted an option to purchase 400,000 shares of the corporation stock at $.20 per share, and that any unpaid balance of principal and accrued interest on the notes could be credited for the purchase price of the stock under the option. Although the minutes reflect that three of the directors were present, at trial two of the three directors denied any such meeting was ever held. The appellant contends that these minutes were prepared by Harrison, and that there was never any special directors meeting held that day.
On July 15, 1968, over two years after Harrison's death, Mrs. Grace Harrison, the widow, as his administratrix, exercised this option to purchase the 400,000 shares of the stock. The principal and accrued interest on the notes at that time amounted to $73,864.78. That sum was credited against the purchase price, and in addition Mrs. Harrison paid appellant $6,135.22 for the total option price of $80,000.
Four days after exercise of the option, the directors again held a special meeting at which time an investigation into the transfer of the stock under the option was instituted. At this meeting William C. Harrison (the husband of Phyllis W. Harrison and the son-in-law of the late Lester S. Harrison) advised the directors he would bind the estate not to transfer the shares of stock.
The corporation made certain payments on the series of five promissory notes: $900.00 principal on May 28, 1957; $1,606.68 interest and $3,893.32 principal on March 12, 1960; $1,285.58 interest and $712.42 principal on October 3, 1963.
The first issue raised by appellant's assignments of error focuses on the failure of ...
To continue reading
Request your trial
-
Courtright's Estate, Matter of
...but by the same token there is no duty to make findings on issues that are immaterial to the decision." Yreka United, Inc. v. Harrison, 95 Idaho 430, 433, 510 P.2d 775, 778 (1973). Accord, Eschweiler v. Downey, 97 Idaho 299, 543 P.2d 852 (1975); Perry Plumbing Co. v. Schuler, 96 Idaho 494, ......
-
Hinkle v. Winey
...to resolution of the claims. In re Estate of Lewis, 97 Idaho 299, 302, 543 P.2d 852, 855 (1975); Yreka United, Inc. v. Harrison, 95 Idaho 430, 433-34, 510 P.2d 775, 778-79 (1973). The findings of fact by the district court in this case were set forth in a brief opinion and order. After noti......
-
Quiring v. Quiring
...to resolution of the claims. In re Estate of Lewis, 97 Idaho 299, 302, 543 P.2d 852, 855 (1975); Yreka United, Inc. v. Harrison, 95 Idaho 430, 433-34, 510 P.2d 775, 778-79 (1973); Hinkle v. Winey, 126 Idaho 993, 999, 895 P.2d 594, 600 Ron also claims that the following findings were in erro......
-
Belt v. Belt
...to the instant case, which addresses the issuance of stock for a cash amount which was less than par value. See Yreka United, Inc. v. Harrison, 95 Idaho 430, 510 P.2d 775 (1973). There the trial court had determined that an issuance of stock was invalid. The trial court's ruling was affirme......