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BROWN v. ROSENTHAL (05/24/54)

May 24, 1954

BROWN, APPELLANT,
v.
ROSENTHAL



Appeal, No. 90, March T., 1954, from decree of Court of Common Pleas of Allegheny County, July T., 1948, in Equity, No. 2348, in case of Charles G. Brown v. E. N. Rosenthal et al. Decree affirmed; reargument refused September 15, 1954. Bill in equity. Before O'BRIEN, J. Adjudication filed finding for defendants; exceptions to adjudication dismissed and final decree entered. Plaintiff appealed.

COUNSEL

Sherman T. Rock, d with him William B. Paul and Paul, Lawrence & Rock, for appellant.

Earl F. Reed, with him J. Roland Johnston and Thorp, Reed & Armstrong, for appellees.

Before Stern, C.j., Stearne, Jones, Bell, Musmanno and Arnold, JJ.

Author: Bell

[ 378 Pa. Page 77]

OPINION BY MR. JUSTICE BELL

A bill in equity was filed by Brown praying (a) that Joseph Rosenthal, hereinafter referred to as "JR", assign and deliver to him 2 shares of stock of Jones &

[ 378 Pa. Page 78]

Brown, Inc., which he alleged JR held as trustee for him; (b) that E. N. Rosenthal and/or the other defendants pay Brown all dividends declared on the said 2 shares of stock; (c) the dividends on 97 shares of additional stock of Jones & Brown, Inc.; (d) that E. N. Rosenthal pay the plaintiff a bonus of 4% of the net earnings of Jones & Brown, Inc., which he received for the year 1947; and (e) that certain written agreements which were executed by him be declared fraudulent, null and void.

Because of the charges and countercharges, the record exceeded 1,200 pages. From this record we shall briefly summarize the most important facts.

Jones & Brown, Inc. was incorporated in 1927. At that time Brown and Rosenthal each owned 25% of the outstanding stock of the company, but shortly thereafter purchased the additional 50% of the stock so that each owned 260 shares of the total issued common capital stock of 520 shares. Of these shares 2 qualifying shares were registered in the name of JR which he held under an oral trust, one share for Brown and one share for Rosenthal.

For approximately 10 years Jones & Browns' business was small and Brown and Rosenthal got along well together. In 1935 Jones & Brown, Inc. became interested in "Inselbric", which was a composition wall siding for houses manufactured by Mastic Asphalt Corporation. On December 30, 1936, Jones & Brown, Inc. entered into a written contract with Mastic Asphalt Corporation, under which they became the exclusive distributor of "Inselbric". Primarily as a result of the efforts of Rosenthal the sale of "Inselbric" became an extraordinarily profitable business for Jones & Brown, Inc.

Because of the tremendous growth of Jones & Brown, for which Rosenthal was ...


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