This case is presented to this court on appeal from the court of common pleas of Butler county.
The plaintiff, E.E. Redman, had acquired an option upon certain real estate in Butler county, for which he had paid $1,000, and which was about to expire. *Page 372 His purpose was to organize a corporation which would develop this property for use as a cemetery. In furtherance of this plan, he sought to interest the defendant Asbury, of Hamilton, Ohio, in the project, and was ultimately successful in so doing, but only after it was agreed that the plaintiff should have but 49 per cent. of the common stock of the company and that the control of the corporation should be secured in those locally interested in the project.
The plaintiff, E.E. Redman, through his attorney Moore, caused the corporation to be formed, Asbury and his associates becoming the five directors.
The 1,250 shares of no par common stock were at first subscribed for by and issued to the directors and Moore; 1,245 shares being issued to Moore, who later indorsed the certificate in blank. Moore and the plaintiff claim this stock was held by Moore in trust for the plaintiff, but subsequent events show that such contention is erroneous.
In accordance with the promotion plan 614 shares, a little over 49 per cent. of the common stock, were issued to Asbury in trust for the plaintiff, who, at his own suggestion, signed a trust agreement providing that the stock should be voted for a period of ten years according to the direction of the majority of the board of directors and their successors in office.
It was also understood and agreed by the parties that the plaintiff should only secure the entire and complete interest in such stock upon his completion of the construction and development work of the cemetery.
It is contended by plaintiff that he paid for this stock with the sum of $1,000, paid for the option, and $250 which he advanced to defray the organization expense, a total of $1,250.
The plaintiff was repaid such sum of $1,250 at the rate of $60 per week, and there is no question that he agreed to accept 614 shares of the stock as his *Page 373 share of the distribution, which is considerably less than $1250; the value of the stock having been fixed at $1 per share.
Two of the directors each received 200 shares of the common stock, and other directors received lesser amounts. Some of the common stock was issued to those purchasing preferred stock, 350 shares of which was authorized, at a valuation of $100 per share.
There is evidence that plaintiff authorized transfers of his trust stock by his trustee from time to time, to be transferred to purchasers of preferred stock, leaving a balance of 609 shares to his credit in the hands of Asbury, trustee.
The plaintiff accepted the position of general construction manager and also sales manager of lots. His work as such construction manager was unsatisfactory and he resigned before the development and construction work was completed. His work as sales manager was also unsatisfactory and he was discharged. He now brings this suit, claiming that the voting trust agreement is illegal, null, and void, and asking that the stock be transferred to him, and that the defendants be enjoined from interfering with his enjoyment thereof.
If we were to find the trust agreement invalid, the plaintiff would be entitled to no stock, for only through its terms is he entitled to any interest therein. Obviously, therefore, he cannot affirm the instrument for one purpose and disclaim it for another. The instrument is as follows:
"Voting Trust Agreement. "Hamilton, Ohio, Sept. 18, 1929.
"In consideration of One Dollar and other good and valuable consideration, I hereby deposit in trust with Ralph R. Asbury, Secretary of the Memorial Development Construction Company, an Ohio Corporation of Hamilton, Ohio, Certificate No. 29, representing 614 *Page 374 shares of the no par common stock of the said Memorial Development Construction Company, issued in the name of E.E. Redman, same to be held by the said Ralph R. Asbury as Secretary, and his successors in office, for a period of ten (10) years from date hereof; and
"I further agree for myself, my heirs, administrators, executors and assigns, that the voting power of said stock shall be vested in the Board of Directors of the said Memorial Development Construction Company and their successors in office, while said stock shall be so held in trust; and direct that the voting power of said stock shall be voted as directed by a majority of said Board of Directors upon all questions and matters upon which said stock is entitled to vote; and
"I hereby for myself, my heirs, executors, administrators and assigns do ratify and affirm the acts of said Board of Directors or their successors in office in so voting said 614 shares of stock herewith deposited in trust.
"It is understood that said 614 shares of stock herewith deposited in trust may be released from said trusteeship by mutual consent expressed in writing by the said E.E. Redman, his heirs, executors, administrators or assigns, and by a resolution to that effect adopted by a majority of the Board of Directors of the said Memorial Development Construction Company.
"It is understood that the right of the said E.E. Redman to receive the dividends that shall be declared upon the stock so trusteed herein, shall not be affected or impaired by reason of the deposit of said stock in trust as above set forth. *Page 375
"E.E. Redman.
"Witness: Lula M. Pelley.
"Acceptance by Trustee. September 18, 1929.
"I, Ralph R. Asbury, Secretary of the Memorial Development Construction Company, do hereby accept and acknowledge receipt of Certificate No. 29 representing 614 shares of the no par common stock of the Memorial Development Construction Company issued in the name of E.E. Redman, and agree for myself and my successors in office to hold said certificate of stock in trust subject to the above stipulations and agreements.
"R.R. Asbury, Trustee."
Section 8623-34, General Code, specifically authorizes such agreements for periods not to exceed ten years. Unless the instrument contains provisions against public policy, it is, therefore, valid. We find nothing in it against public policy, in view of the circumstances surrounding its execution and the effect upon those interested or to become interested in the corporation.
The defendants have also prayed for equitable relief against the plaintiff, claiming that he has conducted himself in a manner inimical to the interests of the corporation. We do not find sufficient evidence to warrant issuing an order of injunction against the plaintiff.
A decree may be presented, dissolving the injunction issued by the trial court, and dismissing the petition of plaintiff, and denying the relief prayed for by the defendants.
Decree accordingly.
HAMILTON and CUSHING, JJ., concur. *Page 376