Village Mortgage Co. v. Garbus

Citations

• 201 Conn. App. 845

Syllabus

The plaintiff, M Co., a mortgage company, sought a declaratory judgment to determine whether the defendants were lawful owners of shares of stock in M Co. In 1998, the defendants purchased 300 shares of stock in M Co. but, thereafter, they returned the certificate of stock and M Co. reimbursed the defendants their investment. M Co. alleged that in 2011, the stock certificate was returned to the defendants by V, the cofounder of M Co., and that the defendants' stock was improperly reissued or returned to them, without proper corporate authorization and for less than the fair value of the stock. The trial court determined that the defendants were not lawful shareholders of M Co. because, although they were listed as original shareholders, their ownership inter- est was relinquished soon thereafter, and V had no actual or apparent authority to issue shares in M Co. to the defendants. On appeal, the defendants claimed that M Co. alleged a claim of tortious financial misconduct and, therefore, the trial court improperly concluded that the declaratory judgment action was not barred by the applicable statute of limitations (§ 52-577). Held that the trial court correctly determined that no statute of limitations applied to bar M Co.'s declaratory judgment action, rather, that the special defense of laches applied and that the defendants failed to prove that special defense: the trial court correctly interpreted that the allegations in M Co.'s complaint were not predicated on a note or agreement and that, despite the defendants' claim to the contrary, M Co. did not plead the elements of fraud, statutory theft, or conspiracy, and the defendants failed to identify those allegations in the complaint, M Co. did not seek damages but, rather, a judicial determi- nation as to whether the defendants were legally shareholders, and the determination of who had the superior claim was inherently an equitable one, particularly where there was no claim or finding that any of the parties e