Opinion
No. 39056.
May 3, 1954.
1. Corporations — attachment in chancery — discovery — evidence — sustained decree against manager for excess salary.
In suit by Hotel Corporation begun as an attachment in chancery for an accounting and for discovery and recovery of all amounts due Corporation, including overpayments of salary, which defendant as manager of Corporation paid herself out of corporate funds, covering period of about six years, evidence supported decree against defendant for excess salary and impressing a lien on assets in hands of defendant garnishee to satisfy same.
Headnote as approved by Hall, J.
APPEAL from the chancery court of Hinds County; L. ARNOLD, PYLE, Chancellor.
Allan T. Edwards, Jackson, for appellant.
I. Cited and discussed the following authorities: Anderson, Clayton Co. v. Rayborn (Miss.), 192 So. 28; Burnett Lumber Supply Co. v. Commercial Credit Corp., 211 Miss. 53, 51 So.2d 54; Carpenter v. Edwards, 64 Miss. 595, 1 So. 764; Carter v. Eastman Gardner Co., 95 Miss. 651, 48 So. 615; Darden v. American Bank Tr. Co., 158 Miss. 742, 130 So. 507; Fant v. Fant, 173 Miss. 472, 162 So. 159; Hunt v. Sherrill, 195 Miss. 688, 15 So.2d 426; Jones v. City of Columbus, Miss., 134 F.2d 464; Landstreet v. Meyer, 201 Miss. 826, 29 So.2d 653; Masonite Corp. v. Hill, 170 Miss. 158, 154 So. 295; Orgill Bros. v. Perry, 157 Miss. 543, 128 So. 755; Ross v. Biggs, 206 Miss. 542, 40 So.2d 293; Ryals v. Douglas, 205 Miss. 695, 39 So.2d 311; Saffold v. Horne, 71 Miss. 766, 15 So. 639; Snell v. Fewell, 64 Miss. 655, 1 So. 908; Stewart v. Coleman Co., 120 Miss. 29, 81 So. 653; Toulme v. Clarke, 64 Miss. 471, 1 So. 624; Truckers' Exchange Bank v. Conroy, 190 Miss. 242, 199 So. 301; Wherry v. Latimer, 103 Miss. 524, 60 So. 642; Wilkie v. Collins, 48 Miss. 496; Wilson v. Blanton, 130 Miss. 390, 94 So. 214, 216; Secs. 1292, 1294, Code 1942; Regulation 111 (Internal Revenue), Sec. 29.22(a)-3; Vol. I, C.C.H., Gross Income, Par. 53.055 — .060; Encyclopedeae of Evidence, Impeachment of Witnesses, p. 249, et seq.; Griffith's Miss. Chancery Practice, Secs. 364, 569, 570; Heiss, 36 B.T.A., 833 Dec. 9801; Reynard Corp., 30 B.T.A., 451 Dec. 8522.
Johnson White, Lexington, for appellee.
I. The master did not err in making his report nor did he err in disallowing appellant's exceptions and objections to his report. The Court below did not err in disallowing and overruling the renewal of appellant's exceptions and objections and in confirming the report of the master. Moreover, the lower court did not err in rendering its decree in favor of the appellee instead of finding for the appellant. The aforesaid actions of the master and of the Court were supported by a sufficiency of competent evidence and were not contrary to the weight of the evidence. Nash Miss. Valley Motor Co. v. Childress, 156 Miss. 157, 125 So. 708; 13 Am. Jur., Corporations, Sec. 1027 p. 975; 14A C.J., Corporations, Secs. 1866, 1908, 1922, 1929 pp. 99, 143, 149, 152; 31 C.J.S., Evidence, Sec. 381(c) p. 1172; 32 C.J.S., Evidence, Sec. 633(b) p. 485; 37 C.J.S., Fraud, Sec. 95 p. 401.
II. The decree for discovery and accounting was not error for the reasons that appellant's sworn separate answer was no direct, positive and candid discovery, and said answer was overturned not only by six of the witnesses who testified for appellant and an abundance of corroborating circumstances, but was also overturned by appellant's own deposition, her several admissions in her sworn answer in Cause No. 7877 in the Chancery Court of Holmes County, her own contentions in her exceptions and objections to master's report and in her renewal of exceptions and objections to master's report, and by the position which she is now taking in her brief before this Court. Nash Miss. Valley Motor Co. v. Childress, supra; 14A C.J., Corporations, Sec. 1874 p. 109; Griffith's Miss. Chancery Practice (2d ed.), Secs. 427-8, 570.
III. As there was no error in the proceedings to and including the rendition of the final decree ordering a money judgment for appellee, and ordering a production of the records together with an accounting thereon, the decree of the lower court should be affirmed. Burnett Lbr. Supply Co. v. Commercial Credit Co., 211 Miss. 53, 51 So.2d 54; Fant v. Fant, 173 Miss. 472, 162 So. 159; Landstreet v. Meyer, 201 Miss. 826, 29 So.2d 653; Pennington v. Acker, 30 Miss. 161; Ryals v. Douglas, 205 Miss. 695, 39 So.2d 311; 13 Am. Jur., Corporations, Sec. 1027 p. 975; 14A C.J., Corporations, Sec. 1929 p. 152; 27 C.J.S., Discovery, Secs. 18(a), 18(b) pp. 29, 33.
This suit was begun by attachment in chancery by appellee corporation against appellant seeking an accounting and discovery and also seeking a recovery of all amounts due the corporation by appellant as reflected by such accounting and discovery and including specifically overpayments of salary which appellant had paid to herself out of the funds of the corporation. The bill alleged that appellant had taken away practically all the records and books of the company. The answer denied this and made no discovery and rendered no accounting.
Appellee owns and operates Hotel Durant, at Durant, Mississippi. Appellant's father was originally the principal stockholder and operated the hotel. His health was failing and in December 1941 an agreement was made with all the stockholders and directors of the corporation whereby she would take over the management at a salary of $150.00 per month plus room and meals beginning in January 1942. At that time she and three of her brothers owned a part of the stock. Later her father died and thereafter appellant and her said brothers became the owners of all the corporate stock in equal share. Appellant continued as manager of the hotel until March 1948 when all of the stock was sold to Bert R. Arbogast. When he assumed the management of the hotel appellant's employment ended. She removed all of the books and records of the hotel except the minute book and had them stored. They were later removed under her direction from the storage place where they had been put. She left Mississippi and the books and records have never been located. She testified by deposition and said that she did not remove the books and records from the hotel and denied knowledge of there whereabouts, but it was established conclusively by the evidence that she did remove them. It was also established that no authorized change was ever made in her salary from the time she took over until the time she relinquished her position as manager of the hotel. It was shown by reports to the Collector of Internal Revenue of the salaries paid to employees of the corporation, all of which reports were signed by appellant, that beginning in 1944 and continuing to March 1948 she withdrew in her salary $6,346.19 more than had been authorized. The chancellor gave appellee a decree against her for this amount plus interest and impressed a lien on the assets in the hands of the garnishee to satisfy the same. From that decree she appeals.
(Hn 1) It is contended that the decree is contrary to the great weight of the evidence. Without detailing the contents of the voluminous record in this case, we think the evidence abundantly supports the decree. It overwhelmingly refutes much of the evidence which appellant gave by deposition and justifies the decree in the mind of any fair minded person.
It is next contended that since the original bill of complaint did not waive answer under oath, the sworn answer of defendant could not be overturned except by two witnesses or by one witness and corroborating circumstances. The decree does not rest on the testimony of one witness alone. It is sustained not only by the record which appellant made of the payments of salary which she drew from the corporation, but also by numerous other facts and circumstances shown by oral testimony and other documentary evidence. It follows that the decree should be affirmed.
Affirmed.
Roberds, P.J., and Lee, Arrington and Ethridge, JJ., concur.