Corcoran v. Ballinadee Farm Co.

Marbury, J., delivered the opinion of the Court. Thomas F. Corcoran in this appeal asks us to reverse an order of the Circuit Court for Montgomery County sustaining a demurrer to his bill of complaint without leave to amend. Appellant sought in his bill filed March 21, 1963 (lj to set aside and cancel a contract between the parties dated July 1, 1954; (2) to require the corporate appellee, The Ballinadee Farm Company, to deliver certain stock to appellant; (3) to require an accounting of the corporation’s transactions since July 1, 1954 and then a decree for the payment of any money found ⁵⁸¹ due him; and (4) to restrain and enjoin the appellee from selling or assigning any interest in any of its property. The chancellor was of the opinion that the bill of complaint did not state a cause of action, but that even if it did the suit was barred by the doctrine of laches.

The essential allegations of the bill, taken as true of course for the purposes of ruling on the demurrer thereto, are as follows. The appellant “took title” to a three hundred twenty-eight and one-half acre farm in Montgomery County in 1946 known as “Ballinadee”. He moved onto the farm and the following year began to conduct a commercial farming operation that included raising crops, purchasing and raising livestock, and the purchase and breeding of thoroughbred horses for sale. Edward J. Flynn, whose name is found throughout the bill, was a practicing attorney in New York, approximately twice Corcoran’s age.

Known to appellant since he was twenty years of age, Flynn had shown a fatherly interest and affection toward him, which feelings were reciprocated, appellant respecting Flynn’s age, superior professional and business astuteness and placing considerable confidence in him. In 1948, at Flynn’s suggestion, the appellee corporation was formed, with one thousand shares of authorized stock, for the purpose of purchasing the farm and operating it commercially. In consideration of conveying the farm and certain personalty to the corporation, Corcoran received two hundred and fifty of the one thousand shares outstanding, $10,000 in cash, and three promissory notes of the corporation in the amount of $10,000 each. The remaining seven hundred fifty shares were divided among Flynn and his three children.

From the inception of the corporation Corcoran was its secretary-treasurer, and he resided on the Ballinadee farm, operating it for the benefit of the corporation and expending several thousand dollars of his own in the corporation’s business. In 1950 the appellant acquired another farm in Montgomery County consisting of about four hundred and twelve acres known as the Jarboe farm. That same year he conveyed this farm to Flynn allegedly without consideration, and the property passed to his widow when Flynn died in 1953. She in turn conveyed it to appellee in 1957. ⁵⁸² The bill further alleges that in 1951 appellant purchased in his own name a herd of livestock.

He subsequently transferred the livestock to the appellee without consideration to be held in trust by it for the benefit and use of the appellant. Then, in July of 1954, on the initiation of one Monroe Goldwater who had been Mr. Flynn’s law partner, who acted as attorney for Flynn’s executor, and who had been well known to appellant for many years, the agreement upon which this litigation centers was entered into between Corcoran and the corporation. It provided for acquisition by the corporation of appellant’s two hundred and fifty shares of its stock and acknowledgment of the payment and acquittance of the indebtedness of $10,000 then owed by the appellee corporation to appellant. The consideration appellant received was certain livestock, which he now alleges already belonged to him.

Subsequent to this 1954 agreement the corporation sold Ballinadee for