Findley v. Garrett, 109 Cal. App. 2d 166 (1952)

Citation: Findley v. Garrett, 109 Cal. App. 2d 166 (1952)
Parent Document: Findley v. Garrett, 109 Cal. App. 2d 166 (1952)
Jurisdiction: California (state)
Effective Date: 1952-02-08
Original Source: https://www.courtlistener.com/opinion/1138834/findley-v-garrett/ ↗

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From May, 1936, to October, 1939, the Garrett Corporation (referred to as Garrett) was promoted and organized in furtherance of a fraudulent scheme and conspiracy entered into by defendants J. C. Garrett, Northrop, Jay, Elliott, Bertrandias, Raymond, Doak, Darner and Conant, and by Mr. Wetzel and Mr. Cover, all of whom were officers, directors or executives of Douglas and of its subsidiary, Northrop Corporation. Defendants Deigh, Smith and Barlow, who were friends of some of said last-mentioned defendants, were associated with them in promoting Garrett and they had knowledge, from 1936 to the date of filing the amended complaint, of the fiduciary obligations of all said directors or executives of Douglas. Said conspiracy was made effective in the following manner: defendant organizers of Garrett have had control of Garrett from 1936 to date by reason of their ownership of a majority of its stock; seven of said defendants (organizers) continued as directors of Douglas; four of said defendants (organizers) discontinued as directors of Douglas and became directors of Garrett; and all those eleven defendants (organizers) joined with three other defendants (not directors of Douglas) who became directors of Garrett. The net total profits received by said individual defendants as dividends and by increase in value of Garrett stock is in excess of $7,500,000. The purpose of the conspiracy was to *169

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