Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

WILEY FAIRCHILD, ET AL. v. JOHN W. KEYES

APRIL 04, 1984

WILEY FAIRCHILD, ET AL.
v.
JOHN W. KEYES



BEFORE PATTERSON, BOWLING AND DAN LEE

DAN LEE, JUSTICE, FOR THE COURT:

This is an appeal from the Chancery Court of Forrest County wherein the appellants, Wiley and Rodney Fairchild, were ordered to specifically perform an agreement to dissolve a closed corporation formed and wholly owned by the appellants and appellee. Feeling aggrieved of that decision the Fairchilds bring this appeal and assign a number of errors. Because our decision on the first assignment is dispositive of this case, we do not address the other issues.

At the outset we wish to note that, though we must reverse, the chancellor should be commended for his patience and efforts in a suit such as this where the

 record is voluminous and the issues complex.

 In March, 1978, the parties to this suit Rodney Fairchild, Wiley Fairchild and John Keyes, formed a closed corporation named F. F. & K. Oil Company, Inc. *fn1 They were the sole shareholders with the distribution of shares as follows:

 Wiley Fairchild, 40%; Rodney Fairchild, 30%; John Keyes, 30%. Keyes served as President, Wiley as chairman of the board, and Rodney as vice president.

 On October 10, 1978, a meeting of the board of directors was held from which Rodney Fairchild was absent. From that meeting came a document entitled "Minutes of a Special Meeting of the Board of Directors." Those minutes reflect that a motion was adopted "That it be the intent of the directors to dissolve the corporation in February, 1979, after the end of the fiscal year, and distribute the assets of the corporation at that time provided it is wise from a tax standpoint."

 Following this meeting there was a second special meeting of the board of directors. At that time Keyes was replaced as president of the corporation by Robert L. Jarvis. At this meeting it was also resolved that the corporation not be dissolved. Keyes voted against this resolution.

 On July 27, 1979, Keyes filed a petition in the Chancery Court of Forrest County seeking specific performance of what he alleged was an agreement to dissolve the corporation and to liquidate its assets. The petition plainly stated that Keyes was suing the Fairchilds "In their individual capacities as well as in their corporate capacity as majority stockholders, officers and directors of the corporation. . ." The Fairchilds responded by filing a demurrer which argued that the suit failed for nonjoinder of a necessary party, i.e., the corporation.

 In a hearing on the demurrer, Keyes took the position that this was an action against the Fairchilds as individuals, not in their corporate capacity. The chancellor then overruled the demurrer and held that in a suit for specific performance of an agreement to dissolve, the corporation need not be named as a party. We reverse.

 Obviously, in order to take the steps necessary to dissolve the corporation, which specific performance would require in this suit, the Fairchilds would have

 to act in their capacity as corporate directors. This is acknowledged by Keyes' bill of complaint which named the Fairchilds as defendants both in their capacity as individuals and as corporate directors, even though he has taken a different position in the hearing on the demurrer and this appeal.

 In 19 Am. Jur. 2d Corporations 1608, the general rule is stated that:

 In an action brought by a minority stockholder to dissolve a corporation all the stockholders must be made parties, and the corporation, of ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.