William J. Taylor, Lawrence I. Washor, Morgan, Lewis & Bockius, Philadelphia, for appellant.
A. Richard Caputo, Charles A. Shea, III, Shea, Shea & Caputo, Wilkes Barre, for appellees.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy and Manderino, JJ. Nix, J., did not participate in the consideration or decision of this case.
At issue in this appeal is ownership of the Wagner Realty Corporation and its sole asset, a parcel of real estate located on Pierce Street in Kingston, Pennsylvania. Appellant claims that ownership is exclusively his, whereas the individual appellees, appellant's five children, claim that ownership is in them in equal shares by way of gift from their father. In a suit by the father charging that the corporation had been wrongfully taken from him by his children when he was ill, and seeking a return to him of all indicia of ownership, the chancellor found for the children. We are satisfied that this result is supported by the facts and the law, and will affirm.*fn1
The events giving rise to the dispute occurred in the fall of 1970, when H. Eugene Wagner directed his lawyer to form a corporation to hold and manage real estate. The lawyer, Albert A. Aston, Esq., did so (a certificate of incorporation issuing from the Secretary of the Commonwealth on November 20, 1970), and delivered all corporate papers and records to Mr. Wagner, including an assignment by Aston, as sole incorporator and subscriber to shares of the new company's stock, of his stock
subscription.*fn2 Mr. Wagner then purchased for the sum of $102,000*fn3 a certain parcel of real estate on Pierce St. from one William J. Brennan and his wife, directing the conveyance from the Brennans to be made to Wagner Realty Corp. This was accomplished by a deed dated December 7, 1970 and duly recorded. So far as the record shows, this real estate is the sole asset of Wagner Realty Corp.*fn4
In the meantime, on November 27, 1970, Eugene Wagner, Jr., Marjorie Hunter and Marilynne Wagner, three of appellant's children, purporting to act as all of the shareholders and directors of Wagner Realty Corp., directed that 100 shares of stock issue to each of them at a purchase price of $2.00 per share, an amount which they determined to be good and sufficient consideration (the stated par value was 10 cents per share). Several months later, in March of 1971, the same three children as sole shareholders directed the issuance of 100 shares at $2.00 per share to each of their siblings, Corey E. Wagner and Martha Wagner Ostrowski. This capitalization of the company has continued unchanged.
It is evident that two transfers of property are involved in this case: that of the stock of Wagner Realty,
and that of the Pierce St. property. While ownership of all the stock of a corporation normally carries with it effective, if indirect, ownership of the corporate assets, Mr. Wagner contends that the corporation's apparent ownership of Pierce St. was spurious in that no gift of the real estate was made by him to the corporation. We ...