Arnold v. Maxwell

• Decision Date: 31 May 1918
• Citation: 230 Mass. 441,119 N.E. 776
• Parties: ARNOLD v. MAXWELL et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

230 Mass. 441

119 N.E. 776

ARNOLD

v.MAXWELL et al.

Supreme Judicial Court of Massachusetts, Suffolk.

May 31, 1918.

Report from Supreme Judicial Court, Suffolk County.

Suit in equity by William B. Arnold against George H. Maxwell and the North American Chemical Company. The cause was heard by a single justice of the Supreme Judicial Court on a master's report and defendants' motion to recommit the report, and was reserved and reported to the full court, which dismissed the bill as to defendant company, and recommitted the cause to the master, the terms of the decree to be settled before a single justice. The case came on before the justice on the master's report and plaintiff's and defendant's exceptions thereto, plaintiff's exceptions were overruled, and defendant's exception was sustained, and the case reported to the full court. Report of the master affirmed, and decree ordered for plaintiff for the amount determined in the report and the facts stated in the report of the single justice, with interest.

Dunbar, Nutter & McClennen, of Boston (J. Butler Studley, of Boston, of counsel), for plaintiff.

Whipple, Sears & Ogden, of Boston (Sherman L. Whipple and Alexander Lincoln, both of Boston, of counsel), for defendants.

CARROLL, J.

In the former decision in Arnold v. Maxwell, 223 Mass. 47, 111 N. E. 687, the case was recommitted to the master, who by an interlocutory decree was directed ‘to ascertain the value of the Spalding stocks as of January 20, 1908.’ The master admitted evidence of the earnings of the North American Chemical Company for three years succeeding January 20, 1908 (to which ruling the defendant objected), and found that the value of stock in this company at that time was $125 a share. The defendant excepted ‘because the master found and ruled * * * that the value of the stock of the North American Chemical Company as of January 20, 1908, was $125 a share, following the theory that he was entitled to consider all the facts reported to him, considering subsequent events so far as so far only as they served to indicate the true worth of elements of value actually existing on January 20, 1908.’ No written objection to the report was delivered to the master, as required by equity rule 31.

The single justice before whom the case was heard was of opinion that the defendant's exception should be sustained, and reported for the determination of the full court, his ruling on this question and also whether interest is to be computed ‘from the date of settlement to the date of the decree, or from the date of the settlement to the date of filing the bill, with a rest as of the date of filing the bill and interest thereafter on the principal so ascertained.’

The defendant's exception is not before us; he objected when the evidence was admitted showing the earnings of the corporation for the three years succeeding January 20, 1908, but failed to comply with equity rule 31-to file a written objection with the master. The objection taken by the defendant cannot be relied on to maintain an exception to a master's report, without an objection in writing to the report itself. Hillier v. Farrell, 185 Mass. 434, 70 N. E. 424;Smedley v. Johnson, 196 Mass. 316, 82 N. E. 21;Murphy v. Moore, 228 Mass. 565, 117 N. E. 918.

It may not be improper to say that we do not think the defendant was harmed by the ruling of the master. He was directed to find the value of certain shares of stock in a partnership accounting, ‘on the basis of the agreement of equality.’ The stock had no market value as fixed by actual sales, and it was not quoted on any exchange. Even if a market might be created for it, the price which a third person not connected with the enterprise would pay was not a fair measure of the value of the stock which the defendant should be called upon to pay his partner; nor was the true value in an accounting between partners what the stock was worth to the defendant, without considering its importance to him as a means of controlling the corporation management. In determining the value of the stock at $125 per share the master found what it was worth to the defendant who sought the direction and control of a successful business and it was proper to take into account all the elements which made the stock...