Cook v. Gray
| Decision Date | 26 June 1882 |
| Citation | 133 Mass. 106 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | Rufus Cook v. James Gray & others |
Argued March 9, 1881
Suffolk. Contract upon an account annexed for work and labor. Trial in the Superior Court, without a jury, before Dewey, J., who found for the plaintiff, and reported the case for the consideration of this court; such judgment to be entered as the court might determine. The facts appear in the opinion.
The case was argued at the bar in March 1881, and was afterwards submitted on briefs to all the judges.
Judgment affirmed.
J. H Bradley, I. S. Morse, A. Cottrell, J. F. Colby, C. Q. Tirrell & T. H. Wakefield, for the several defendants.
G. W Park, for the plaintiff.
The trustees were authorized by the articles contained in the deed of trust to bind the shareholders by contracts like these entered into with the plaintiff. It appears that a considerable number of persons associated themselves together for the purchase of several tracts of upland and flats situated on the sea-shore, for the purpose of improvement and subsequent sales, and took a deed of the premises running to three of their number as trustees, and containing a detailed statement, in fifteen articles, of the trusts upon which the premises should be held. In these articles, the names of the purchasers and their respective interests were mentioned; it was then provided that the "trustees shall and may pay all lawful taxes and assessments thereon; represent the parties interested in all suits and legal proceedings relating to the premises in any court, and commence the same when necessary; . . . . make and execute all necessary agreements relating to said granted premises; employ counsel, and do all acts and things, and pay out all sums of money necessary and proper in the due execution and management of said property; . . . . and in particular may provide for proper drainage, and may determine all questions relative to the proper laying out of streets and ways, or building-lots, subject to the instruction hereinafter provided for." A subsequent article provided that the interest of the purchasers should be divided into sixty thousand transferable shares, of the nominal value of twenty dollars each, and that the beneficiaries should be styled "The Boston Land and Wharf Improvement Company." Article 13 provided that, in case the trustees should find it necessary to raise and expend money before they should receive sufficient funds from sales, they should have authority to collect all necessary sums by assessment upon the shareholders of not more than two dollars per share; with authority to make sales of shares for non-payment of assessments. Article 15 was as follows: "Said trustees shall not, on behalf of the shareholders, incur liabilities which will not be covered by said assessment of two dollars per share, and receipts from sale of company property."
It thus appears that it was contemplated that the trustees should and must incur and pay certain expenses, not only for taxes and counsel fees, but in "the due execution and management of said property;" that in particular they might provide for proper drainage, and determine as to the proper laying out of streets, &c. Sales of the premises in parcels were obviously contemplated. Article 15, by a direct implication authorizes the trustees, on behalf of the shareholders, to incur liabilities which would be covered by an assessment of two dollars per share upon all of the shares, and by the receipts from sales of the company's property. These assessments would amount in all to the sum of $ 120,000. There is no way in which it could be determined in advance how much money would be received from sales, and therefore the articles do not furnish the means by which any one could tell beforehand the exact extent of the authority intended to be conferred upon the trustees in this particular. There is no provision in the articles to the effect that the shareholders shall not be liable to creditors, who may in good faith have given credit to the company upon contracts made by the trustees, for an amount even in excess of the above-mentioned limitation upon their authority; and in view of the fact that the limitation of what will be covered by receipts from sale of company property is in its nature not capable of definite ascertainment at the time when it is contemplated that the liabilities will be incurred, there is room for the argument, at least, that Article 15 is to be considered as merely a direction to the...
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