Lee v. Commonwealth Trust Co.

Citations

• 252 Pa. 291
• 97 A. 448
• 1916 Pa. LEXIS 608

Syllabus

<p>Contracts — Sales of stocJc — Formation of holding company — Insolvency of holding company — Bill in equity for surrender of shares —Estoppel.</p> <p>In a suit in equity to compel the surrender of certain shares of telephone stock, it appeared that the stock had been transferred by plaintiff’s decedent to the promotor of a holding company under an agreement restricting the manner in which it should be transferred by such promoter and providing for the payment therefor in a certain way; that the stock was transferred to the holding company by the promoter in a manner not contemplated by the agreement although with the acquiescence of plaintiff’s decedent, and that payment therefor was made to plaintiff’s decedent in stock of the holding company. The stock so transferred was subsequently mortgaged by the holding company together with other property, and plaintiff’s decedent received two dividends on the stock of the holding company. The holding company became insolvent and its property was sold under, the mortgage; plaintiff contended that he was entitled to a return of the stock because it had been acquired by the holding company in violation of the terms of the agreement between his decedent and the promoter. The lower court dismissed the bill. Held, that as plaintiff’s decedent had acquiesced in the transfer of his stock to the holding company, and had accepted stock in payment therefor, upon which he had received dividends, he had estopped himself from complaining of the violation of the agreement, and the decree was affirmed.</p>