Sheppard

The brief but tempestuous corporate existence of Crestlawn Memorial Park Association (Crestlawn) has been marred by a bitter struggle between two groups of stockholders seeking to wrest control of the corporation from one another. In a complaint filed on January 20, 1958, plaintiffs’ group sought to recover its controlling interest in the common stock of Crestlawn which was shifted to defendants’ group when the latter, acting as the board of directors, caused the corporation to issue sufficient common stock to itself to divest plaintiffs of voting control. The court below gave judgment for plaintiffs and declared defendants constructive trustees of the improperly issued stock for the benefit of plaintiffs and also enjoined defendants from disposing of such stock or from taking any other action detrimental to plaintiffs with respect thereto. Defendants, including Crestlawn, have appealed from the judgment.

Crestlawn is a corporation engaged in the operation of an endowment care cemetery located in Riverside County. It was originally incorporated on March 20, 1952, and on November 10, 1952, the Corporations Commissioner issued his first permit to the corporation to sell and issue…