Ireland v. Ireland Advertising Agency

Citations

• 232 Pa. 605
• 81 A. 716
• 1911 Pa. LEXIS 771

Syllabus

<p>Trusts and trustees — Construction—Shares of corporation — Intent to defraud — Collusive agreement — Annulment of contract — Equity.</p> <p>1. A decree in equity declaring a trust in favor of the plaintiff with respect to certain shares of stock held in his wife’s name and annulling a contract entered into between the latter and another defendant by which the latter was to receive a certain amount of capital stock in addition to salary for services to be rendered the corporation, will be sustained where the court has found, on sufficient evidence, that the plaintiff, on account of ill health, was indisposed to give personal attention to the business he had established; that contemplating a period of rest in travel, he executed a bill of sale of the business to his wife to invest her with legal title, for the sole purpose of enabling her, in his absence, to transfer it to a corporation thereafter to be created; that such corporation was formed with a capital stock of 2,000 shares, which represented nothing of value but the property included in the bill of sale, of which shares the wife received 1,840; that later the wife became president and treasurer, displacing the husband, and that then the wife, asserting her individual ownership of the stock, entered into the contract, with the other defendant, in pursuance of a scheme to exclude the plaintiff from all control over his property, in which scheme both were active participants; there being nothing in the evidence from which an intention to make a gift to the wife could be derived.</p> <p>2. In such a case a clause of the decree authorizing the plaintiff upon notice to call a meeting of the stockholders of the corporation for the purpose of electing officers and the transaction of other corporate business, will be stricken out, as being unnecessary and based on doubtful authority.</p>