Booma v. Bigelow-Sanford Carpet Co.

• Decision Date: 01 April 1953
• Docket Number: BIGELOW-SANFORD
• Citation: 111 N.E.2d 742,330 Mass. 79
• Parties: BOOMA v.CARPET CO., Inc.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 742

111 N.E.2d 742

330 Mass. 79

BOOMA v. BIGELOW-SANFORD CARPET CO., Inc.

Supreme Judicial Court of Massachusetts, Essex.

Argued Jan. 6, 1953.

Decided April 1, 1953.

Edward R. Butterworth, Lynn, Daniel Santry, Lynn, for plaintiff.

Joseph P. Rooney, Boston, Caleb Loring, Jr., Belmont, for defendant.

Before QUA, C. J., and LUMMUS, RONAN, WILKINS and SPALDING, JJ.

LUMMUS, Justice.

General Laws (Ter.Ed.) c. 156, § 45E, inserted by St.1941, c. 514, § 2, provides as follows: 'A stockholder in any corporation which shall have duly voted to consolidate with another corporation in accordance with section forty-six B or forty-six D, who, at the meeting of stockholders, has voted against such consolidation, if entitled to vote, or, if not entitled to vote, has registered his disapproval in writing with the corporation at or before said meeting, may, within thirty days after the date on which the articles of consolidation were filed, make a written demand upon the consolidated corporation for payment for his stock. If such corporation and the stockholder cannot agree upon the value of the stock at the date of the consolidation, such value shall be ascertained and the stock paid for by and transferred to the consolidated corporation in the manner provided in section forty-six.'

In the Superior Court the judge found the following facts. The defendant, a Delaware corporation, was formed by a consolidation of Bigelow-Sanford Carpet Co., Inc., a Massachusetts corporation, with Bristol Mills, Incorporated. On May 15, 1951, the clerk of the Massachusetts Bigelow-Sanford corporation notified its stockholders of a special meeting of stockholders to be held on June 19, 1951, for the purpose of voting on such consolidation. In accordance with the by-laws of the Massachusetts Bigelow-Sanford corporation, and with the order of its board of directors, the notice stated that the board of directors 'has fixed the close of business May 10, 1951, as the record date for the determination of the stockholders entitled to notice of and to vote at said special meeting.'

On May 10, 1951, the plaintiff owned no shares in the Massachusetts Bigelow-Sanford corporation, but bought 500 shares of common stock, which had voting rights, on June 1, 1951. These were put into his name on June 11, 1951. When he bought them he knew of the purpose of the meeting scheduled for June 19, 1951. On June 14, 1951, the plaintiff wrote to that corporation that he was opposed to the consolidation and registered his disapproval. On June 21, 1951, he wrote to that corporation, demanding payment for his stock. On August 31, 1951, the secretary of the consolidated corporation wrote the plaintiff that his demand for appraisal and payment would not be recognized.

The statute gives a dissenting stockholder the right to appraisal and payment, 'if entitled to vote,' only if he has voted against the consolidation. His stock was entitled to vote, but the plaintiff could not vote it because the board of directors had validly fixed a time before he acquired his stock as the date for the determination of the right to vote. As to stock 'not entitled to vote,' the owner was entitled to appraisal and payment if he registered his disapproval in writing before the meeting, as the plaintiff did. The decisive question therefore is, whether the plaintiff held stock that was 'not entitled to vote.' If those words mean stock of a class not entitled to vote, the plaintiff held no such stock and cannot prevail. If those words mean stock denied a vote because not held on the date fixed by the board of directors, the plaintiff is entitled to prevail.

It was found by the judge that 300 of the shares bought by the plaintiff were voted in favor of the...