Appeal, No. 234, March T., 1958, from order of Court of Common Pleas of Allegheny County, Oct. T., 1957, No. 2, in case of Burling E. Christopher, individually and as executor of estate of C. W. Christopher, deceased, et al. v. Joseph A. Richardson, Jr. et al. Order reversed.
Allen E. Brunwasser, for appellant.
William A. Blair, with him David F. Tuthill, and Griggs, Moreland, Blair & Douglass, for appellees.
Before Jones, C.j., Bell, Musmanno, Jones and Cohen, JJ.
OPINION BY MR. JUSTICE BELL.
This is an appeal from an order dismissing plaintiff's demurrer to defendants' answer which the lower court treated as a motion for judgment on the pleadings.
Plaintiff brought this equitable action seeking, (1) a retransfer of assets, an accounting and other equitable relief from an agreement dated July 20, 1951, and (2) to invalidate a voting trust agreement dated July 20, 1951 - which was executed pursuant to the above mentioned agreement - made by the principal shareholders of defendant, William Penn Memorial Corporation, a domestic cemetery company. In 1951 the cemetery corporation was in financial difficulties and heavily
indebted to its shareholders, and it had very little, if any, prospects of paying any substantial portion of the aggregate corporate indebtedness. Plaintiff and a number of the defendants owned stock in the cemetery company, and also owned some lots in the cemetery, and also were creditors of the corporation. As a result of, and in an attempt to solve, the financial problems of the corporation, the principal shareholders on July 20, 1951, entered into the two above mentioned agreements. The validity of the voting trust agreement is the only issue which is raised in this appeal.
Plaintiff, who signed both agreements, seeks to void the voting trust agreement on two grounds - (1) that it does not expressly limit the life of the voting trust to ten years as required by the Act of May 5, 1933, P.L. 364, § 511, 15 PS § 2852-511; and (2) that a party who was an alleged claimant of stock and of lots held by plaintiff as trustee and who was named in the trust agreement as a party thereto, did not sign the agreement.
The Act of May 5, 1933, supra, provides: "Two or more shareholders of any business corporation may by agreement in writing, transfer their shares to any corporation or person for the purpose of vesting in the transferee or transferees all voting or other rights pertaining to such shares for a period not exceeding ten years, and upon the terms and conditions stated in the agreement." Defendants contend that this Act invalidates only those voting trusts which by their terms expressly run for a period of more than ten years.
This voting trust agreement specifically provides: "This agreement shall remain in full force and effect until all percentage payments*fn* due under the aforesaid ...