Opinion
No. 30537.
April 24, 1933. Suggestion of Error Overruled May 8, 1933.
APPEAL AND ERROR.
Findings of fact by chancellor, if supported by evidence, cannot be disturbed on appeal.
APPEAL from Chancery Court of Adams County.
Kennedy Geisenberger and W.A. Logan, all of Natchez, for appellant.
Under section 4148 of the Code of 1930, it is provided that stock in a corporation must be actually paid for.
Stock cannot be issued in consideration of future services or for past services.
5 Fletcher on Corporations, page 5814.
The written contract cannot be varied by parol.
Upon the dissolution of a firm the general rule is that each partner is entitled to the amount of capital which he contributed, this being regarded as a debt of the firm. Where no partner contributed any capital, none can claim return of capital on an accounting. A partner contributing only services is ordinarily entitled to no share of capital on dissolution.
47 C.J. 1172-3.
Where the legal effect of a contract is to bind certain persons as principals, such persons cannot by parol divert the effect of such contract by showing that some other person was to be bound thereby.
22 C.J. 1234.
The defendant banks did not make disclosure of the amount of the deposit by their answers, and exceptions were filed thereto, and the lower court held that they were not liable to make disclosure. This holding was based upon section 3829 of the Code of 1930.
In this case, the complainant is not an adverse claimant, but is seeking the dissolution of a partnership. In addition thereto, process was served on the bank, and therefore the statute was satisfied. The intent of the statute was to exempt the banks from the effects of merely personal notice without any proceedings in court or process.
Greek L. Rice, of Jackson, for appellees.
A finding on the facts by a chancellor will not be reversed by the Supreme Court unless manifestly wrong.
While the finding of the chancellor may not be satisfactory to the appellant, yet this court will not reverse the case, even though this court might be able to say that it would have found differently.
Leavenworth v. Hunter, 150 Miss. 750; Steede v. Ferrer, 150 Miss. 711; Sellers Motor Co. v. Champion Spark Plug Co., 150 Miss. 473; Critchton v. Hallieburton Moore, 154 Miss. 265; Clark v. Dorsett, 157 Miss. 365.
It is appellees' contention that there was an agreement to form a partnership and that the partnership was formed immediately following the agreement. The facts in the record show that the contract was made and that the partnership was formed at once and without delay.
Godfrey v. White, 43 Mich. 171; Shropshire v. Adams, 89 S.W. 448.
Engle Laub, of Natchez, for appellee, City Bank Trust Company, and C.F. Byrnes, of Natchez, for appellee, Britton Koontz National Bank.
The chancery court entered the proper decree so far as the two banks were concerned, that is to the effect that they need not answer further. This is particularly true in view of the fact of the finding of the court on the main issue, and it would also be true even though the court had rendered judgment against the main appellees here, that is Chamberlain-Rice Hospital and Chamberlain-Rice Clinic.
Section 3829, Code of 1930.
For the reason that the statute was not complied with in this case, and further, for the reason that it is against the policy of the state to disclose deposits on hand, we respectfully submit that so far as the two appellee banks are concerned the judgment of the lower court should be sustained.
Argued orally by L.C. Kennedy, for appellant, and Greek L. Rice, for appellees.
The appellant, Dr. James G. Logan, filed a bill in the chancery court of Adams county against Dr. James C. Rice, Dr. John F. Chamberlain, Dr. Raymond T. Smith, and Dr. George L. Kyser, and against certain banks in Adams county, seeking to discover from said banks the amount of partnership funds kept therein, and for an accounting of the partnership, alleging that about April 11, 1930, he and said defendants entered into a written agreement, a copy of which was filed as an exhibit to the bill, which reads as follows: "These articles of agreement entered into by Dr. James G. Logan and Dr. George L. Kyser with the Chamberlain-Rice Hospital, Incorporated, and known hereafter as Hospital, and the Chamberlain-Rice Clinic, known hereinafter as Clinic, as follows: 1. In consideration of the sum of Five Thousand Dollars from each Dr. James G. Logan and Dr. George L. Kyser, the Hospital capitalized at Fifty Thousand Dollars, agreed to sell to each of the aforesaid doctors the sum of fifty shares each of the capital stock at par value of One Hundred Dollars per share. In further consideration of an additional Five Thousand from each of the aforesaid physicians, the Clinic agrees that participation in the profit and losses of both Clinic and Hospital shall be upon the basis of stock held in the Hospital. 2. Both Dr. James G. Logan and Dr. George L. Kyser admit that the Clinic, up to the time of the issuance of above stock was composed of Dr. Charles T. Chamberlain, Dr. John F. Chamberlain, and Dr. James C. Rice, and that, up to that date have been solely responsible for all obligations and responsibilities of the Hospital and Clinic. Upon issuance of above stock the aforesaid physicians acknowledge the following and only shareholders in Clinic and Hospital: Dr. Charles T. Chamberlain, 100 shares; Dr. John F. Chamberlain, 100 shares; Dr. Raymond T. Smith, 100 shares; Dr. James C. Rice, 100 shares; Dr. James G. Logan, 50 shares; Dr. George L. Kyser, 50 shares. Each of these shareholders agree after the issuance of above stock to assume their proportionate share of the obligations and responsibilities of both Clinic and Hospital. 3. Each of above stockholders take notice of the following obligations, now secured by original Clinic and Hospital members: A seventy-five thousand first mortgage bond issue against the property of the hospital; a twenty-five thousand dollar note bearing interest at six per cent payable semi-annually and held by J.M. Jones, Port Gibson, Mississippi. A note of nine thousand five hundred dollars bearing seven per cent interest held by City Bank Trust Co., Natchez, Miss. Life Insurance premium on Policy for fifty thousand dollars on life of James C. Rice, premium on twenty-five thousand policy on life of J.M. Jones. This insurance carried for protection of bondholders. Premiums payable annually with one premium now represented by promissory note and held by Union Central Life Ins. Co. This 11th day of April, 1930."
The appellant, Dr. Logan, alleged, in effect, that he executed the agreement under the belief that Dr. Charles T. Chamberlain was a stockholder in the corporation, and that said Dr. Charles T. Chamberlain was a solvent person of professional eminence, and that the funds paid under the contract would go to the treasurer of said corporation and there be among the assets of the corporation, the hospital. This corporation had a capital stock of fifty thousand dollars of which twenty thousand dollars was owned by J.M. Jones, he having furnished that amounts for the erection of the hospital, and having indorsed or underwritten certain bonds issued by it, amounting at the time of the issuance to seventy-five thousand dollars. It was understood that he would receive a six per cent. dividend on his stock, and that the other incorporators had the right to reacquire the stock issued to him on payment of the twenty thousand dollars paid by J.M. Jones when the stock was issued to him. Dr. Logan, the appellant, alleged that he thought the stock he was buying was treasury stock, and not the stock owned or held by J.M. Jones. He further alleged that the stock issued to Charles T. Chamberlain was held by John F. Chamberlain, and not Charles T. Chamberlain.
There is a sharp conflict in the testimony of Dr. Logan and that of Dr. Rice, and certain other defendants. Dr. Rice testified that the appellant, Dr. Logan, fully understood the exact situation when he purchased the stock and signed the agreement, and that the stock was issued to Dr. Charles T. Chamberlain, but was kept in Natchez in the custody of Dr. John F. Chamberlain, so that it could be conveniently voted at stockholders' meetings.
J.M. Jones contradicted Dr. Logan as to the understanding when he bought the stock, and stated that at the time he transferred the stock to Dr. Logan he made certain congratulatory remarks about so young a physician as Dr. Logan getting such a desirable connection for such a small consideration. J.M. Jones was corroborated in his testimony by Dr. Smith, who was present.
The testimony was sufficient to warrant the chancellor in rejecting the theory of appellant and accepting that of the appellees.
As we view it, the question presented turns upon the facts in the record, and the finding of fact by the chancellor being supported by the evidence cannot be disturbed here.
In other words, we think the evidence is sufficient to warrant the chancellor in finding that the appellant in this case bought with a full understanding of the facts, and that he continued to participate in the earnings of the clinic under his agreement until the order impounding the earnings thereof to be applied in satisfaction of its obligations evidenced by the agreement hereinbefore set forth.
The judgment of the court below will, therefore, be affirmed.
Affirmed.