Blue Mountain Forest Ass'n v. Borrowe

• Decision Date: 28 October 1901
• Citation: 51 A. 670,71 N.H. 69
• Parties: BLUE MOUNTAIN FOREST ASS'N v. BORROWE.
• Court: New Hampshire Supreme Court

51 A. 670

71 N.H. 69

BLUE MOUNTAIN FOREST ASS'N

v. BORROWE.

Supreme Court of New Hampshire. Sullivan.

Oct. 28, 1901.

Bill by the Blue Mountain Forest Association against Annie Corbin Borrowe. Case transferred from the supreme court on a finding of fact Case discharged.

The Blue Mountain Forest Association is a corporation organized by the late Austin Corbin, under chapter 152 of the General Laws, for the purpose of enabling him to conveniently manage the park owned by him, consisting of about 25,000 acres of land, including Croydon and Grantham mountains, all fenced and stocked with wild animals, located in the towns of Newport, Cornish, Croydon, and Grantham, in establishing and maintaining which he expended in the vicinity of $500,000. The capital stock of the association was fixed at $6,000, which was paid in by Corbin, and $5,500 was immediately repaid to him as the nominal consideration for his conveyance to the association of the park and all its appurtenances and animals; and the 60 shares of stock were then allotted as follows: One-sixth, or ten shares, to Austin Corbin; an equal amount to his wife, Hannah M. Corbin; and an equal amount to each of his four children, namely, Mary C. Champollion, isabella C. Edgell, Annie Corbin (the present defendant), and Austin Corbin, Jr.; and said sixths were accepted by said wife and children as donations, for which no consideration has ever been paid by them. Corbin died June 4, 1896, having paid the expenses of establishing the park and maintaining it up to the time of his death. Since his death the income of the park has been insufficient to pay the expense of maintenance. The plaintiffs apportioned the deficiency among the various six Interests, and asked each holder of one-sixth to pay to the association one-sixth of the deficiency, in accordance with the by-laws of the association, article 12 of which is as follows: "Assessments. In case the annual cash receipts from the property are insufficient to meet the annual disbursements for taxes and maintenance, or on any other account such deficiency shall be met by an annual assessment upon the stock; and if any assessment shall not be paid, it shall be a charge against the delinquent interest, and shall draw interest at the rate of 6 per cent.; and so long as such interest shall be delinquent no one representing such delinquent shares shall have any rights to vote at meetings or upon the property of the corporation, and shall be excluded therefrom by the president, unless a majority of the other interests shall, by vote, decide to the contrary." At a stockholders' meeting held September 13, 1897, the defendant being present, a vote was passed as follows: "Voted: That in order to pay the existing deficiency caused by the insufficient receipts to meet disbursements on account of the property and business of the Blue Mountain Forest Association, an assessment shall be and is hereby levied upon each of the shares of the stock of the association of $250, making the total sum of $15,000; this assessment to be payable to the treasurer within 30 days after notice to each stockholder; with the results in case of nonpayment specified in article 12 of the by-laws of the association." On September 19, 1898, and on September 11, 1899, at stockholders' meetings duly held, on account of existing deficiencies similar votes were passed, calling, respectively, for $175 and $135 on each share of stock. All the stockholders have paid said sums, as above called for, upon all the shares held by them, except the defendant; and she, being duly notified, has omitted and refused to make any payment whatever. The plaintiffs admitted that they did not claim that the defendant by her presence at the first meeting, or by anything done or omitted by her at that time, was estopped to question the validity of the assessments or her liability therefor. Article 13 of the by-laws is as follows: "The property to be conveyed to this association is to be conveyed by Austin Corbin for a nominal consideration, and is divided between six members of his family in the following manner, to wit: Austin Corbin, Sr., one-sixth; H. M. Corbin, one-sixth; M. C. Champollion, one-sixth; Isabella C. Edgell, one-sixth; Annie Corbin, one-sixth; Austin Corbin, Jr., one-sixth. And as it has been so divided and stock delivered to each one of the holders for a nominal consideration, it is understood and agreed that every certificate is taken, and the several interests are held, subject to the following conditions as to sale and transfer: First. Stock shall never be offered for sale, except in a block representing one-sixth interest in the entire property, except with the consent of at least two-thirds of the shareholders of the association. Second. It shall never be offered or sold to any outside party until after it has been first offered to the association. The price to be paid by the association for it shall not exceed, for any block of one-sixth of the whole, the sum of twenty thousand dollars ($20,000), unless by a vote of at least two-thirds of the shareholders it shall be deemed just to pay more. And any holder of this one-sixth interest, desiring to sell at and for that price, must offer it to the association for that sum, unless two-thirds of the shareholders shall consent to pay more, as above provided. No interest shall be calculated upon it. The interest is to be sold for an even twenty thousand dollars ($20,000) to the association, if the association decides to take it and refuses to pay more, as above provided. If the association shall decline to take it, then the interest must be offered to other shareholders; and if no one or more decide to purchase at the twenty thousand dollars ($20,000), it may be sold to any person or persons who may choose to buy it, and at any price the holder of the interest chooses to sell it at. If the holder of any interest shall desire to sell, at least three months' notice shall be given in writing to the president of the association, with copies to all shareholders, of the desire of such party to sell, and no sale of such interest shall be made, except to the association, until after the expiration of ninety days after the serving of such notice. If the association declines to buy, it must then be offered in writing to all the shareholders for thirty days before it shall be offered to any other person. Every certificate of stock shall refer on its face to the provisions of the by-laws, and shall be taken by the purchaser subject to all the by-laws, and especially this latter provision relating to sale, with the understanding that the conditions therein contained are to be enforced rigidly, and in no manner to be construed liberally, it being the intention, in the organization of this association, that the property shall be held so long as possible in the members of the family of Austin Corbin and their heirs." The defendant's certificate of stock stated that it was subject "to the terms of the original subscription, and transferable only in accordance with the by-laws of the association." No evidence was offered in support of the allegations of the bill as to an alleged contract between Austin Corbin and the several shareholders, except the by-laws of the corporation and the stock certificates. The plaintiffs claimed such contract was, as matter of law, extablished by this evidence; and that the defendant, having stock in the corporation, was estopped to deny its existence. If the record and certificate as matter of law establish the contract alleged in the bill between Austin Corbin and his wife and children, or if the defendant is estopped to assert the contrary, the allegation is found to be sustained; otherwise not. The prayer of the bill is as follows: (1) That the said several sums of $2,500, and $1,750, and $1,350, with interest thereon, be adjudged to be a charge upon the aforesaid 10 shares of stock in said Blue Mountain Forest Association, standing upon the books of the association in the name of the defendant. (2) That a date may be fixed on or before which the defendant shall pay such sums to the plaintiffs with interest thereon. (3) That in case of default of payment of said sums, on or before such date as may be fixed, appropriate relief may be granted to the plaintiffs by a decree transferring the ownership of the aforesaid 10 shares of stock from the defendant to the plaintiffs at and for the price of $20,000, as fixed in the contract aforesaid, or that such other relief may be granted as may be just.

William El Chandler, Hosea W. Parker, and Albert S. Wait, for plaintiff.

Ira Colby & Son, for defendant.

WALKER, J. One purpose of the founder of the park was to set aside a large tract of uncultivated land for the propagation of wild animals; and it is apparent that he deemed it essential that some degree of permanency and continuity should be given to the enterprise. He did not expend a half million dollars, as well as much valuable time and investigation, to establish and develop the park, with the expectation that upon his decease it would cease to exist and be divided in severalty among his heirs. He did not seek to provide for his personal pleasure...