Opinion
06-04-1928
HEWSON v. CHARLES P. GILLEN & CO., Inc., et al.
Frank B. Bradner, of Newark, for exceptant. Jerome T. Congleton and Maximilian M. Stallman, both of Newark, for defendants.
(Syllabus by the Court.)
Suit by George P. Hewson against Charles P. Gillen & Company, Inc., and others. On exceptions to a master's report. Sustained in part, and overruled in part.
Frank B. Bradner, of Newark, for exceptant.
Jerome T. Congleton and Maximilian M. Stallman, both of Newark, for defendants.
BACKES, Vice Chancellor. The defendant company is dissolved and the bill was filed for an accounting of its estate. The master to whom the accounting was referred has reported and the complainant has excepted. The corporation was formed in 1017 by the complainant and Charles P. Gillen and John J. Gillen, each holding a third of the capital stock, to carry on the real estate and insurance business. The company quit business January i, 1921, and was dissolved April 25th following.
The master charged the complainant:
| With liability as found by the accountant. | $4,722 07 | |
| And allowed him additional credits: One-third commission on lease, Broad and Central avenue | $ 309 33 | |
| One-third commission on sale of Yankee Baseball Field | 2,075 00 | 2,334 33 |
| Charging him with a net indebtedness to the company | 2,337 74 |
The exceptant excepts to these figures and wants a greater allowance.
First Exception. The incorporators were city officials of Newark and gave as much attention to the corporation's affairs as they could spare from official duty. For these services they agreed upon a salary of $6,000 per year each. The complainant, the manager of the company, lost his job in the latter part of 1919, and during the year 1920 devoted all his time to the company's business. He had previously been drawing $25 a week as manager and this was continued during 1920. The master refused to make any additional allowance. I feel that he is entitled to compensation, and so would his associates have felt had harmony continued. It had been a matter of discussion between him and them, and he had suggested the amount of his city salary, and they were not unfavorable; but because no corporate action had been taken they are now opposing it. That is not a fair attitude. The complainant's city job carried a salary of $3,000, and the company having accepted and taken the benefit of his full-time service, it is fair assumption that they had in mind full-time pay. I am allowing him that sum because he earned it This is inclusive of the weekly drawing of $25. The annual "salary" of $6,000 to each of the directors was a misnomer for dividend. Exception sustained.
Second Exception. When the company ceased business, January 1, 1921, the complainant and the Gillens, as Giilen Company, became rivals, and each carried away as much of the old trade as they could muster. The company had had in its employ one Sweet, who had conducted negotiations for the sale of the Astor estates Yankee Baseball Field in New York. The negotiations came to an end and the salesman was dismissed from the services of the company by the complainant. Later he reopened negotiations with the Astor estates and was engaged by Giilen Company and the deal was closed. The commission was $13,750. Sweet reported and turned over to Giilen Company $12,250 as the true amount; Giilen Company gave him his one-half share. The master allowed the complainant one-third of the balance, $2,075. Now the complainant claims one-third of the $1,500 concealed and purloined by Sweet, and excepts to its disallowance by the master. The master should have disallowed him any share of the commission. The defendant company was no longer in business. Its relation with the Astor estate and the ball park deal had previously come to an end. The Giilen Company took up the matter anew through Sweet. It was not a closing out of old business of the company, but a new engagement by Giilen Company, and they are entitled to the fee. That no injustice be done permission will be given defendants to file an exception, and it is sustained.
Third Exception. The check for $12,250 commission came to the hands of the two Gillens, then trustees of the defendant company, in dissolution. Sweet at that time was indebted to the company $1,348.90, for moneys advanced. The trustees had the opportunity and it was their duty to collect the debt, and they are chargeable for their neglect. The complainant is entitled to a credit of the one-third, $449.63. The exception is sustained.
Fourth Exception. The defendant company and one Katz undertook with the federal government to put up a building at Passaic, for a post office, and to that end bought options on the proposed site; the company contributing $500. The government called a halt and invited new proposals. The complainant declined to have any part in the affair, saying to the Gillens that it was their "baby." The company in the meantime had been dissolved, and Charles P. Giilen undertook to meet the new conditions and succeededand built the post office, having formed the New Pass Development Company through which to carry out the operation. The complainant now claims that the defendant company has an equitable interest in the undertaking and has joined the New Pass Development Company as defendant for an accounting. Title to the site had been taken by Eatz and he had withdrawn and conveyed to Giilen upon payment of his outlay. He had paid all the purchase price except the $500 which Giilen repaid to the company. There is no resulting trust. The option and title having been taken for a specific purpose and the project having been abandoned by the company, it, at most, is only entitled to the return of its share of the purchase price. If profits be claimed from Giilen as a trustee of the defendant company, on the option and title to the land conveyed to the New Pass Development Company, the proof is that the company was fortunate to be reimbursed. There were no profits. The exception is overruled, and the bill will be dismissed as against the New Pass Development Company.
The account then stands:
| Dr. | |
| As found by the master | $2,337 74 |
| Allowance by master of one-third Astor sale commission | 2,075 00 |
| $4,412 74 |
| Cr. | |||
| By compensation as manager for the year 1920 | $3,000 00 | ||
| Deducting salary of $25 per week | 1,300 00 | $1,700 00 | |
| One-third of $1,348 90 due from Sweet | 449 63 | 2,149 63 | |
| A decree may be entered against the complaint for | |||
| $2,263 11 |
Other exceptions taken by the complainant are not urged in the brief, and they are regarded as abandoned.