East Tennessee Land Co. v. Leeson

Decision Date26 February 1903
Citation66 N.E. 427,183 Mass. 37
PartiesEAST TENNESSEE LAND CO. SAME v. LEESON. SAME v. HOPEWELL.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court
COUNSEL

Wm.

H. Russell and Lewis G. Farmer, for plaintiff.

I. R Clark, for defendants.

OPINION

BRALEY J.

After the former decision in this case (Hayward v Leeson, 176 Mass. 310, 57 N.E. 656, 49 L. R. A. 725) the opinion in which is made, by agreement of parties, a part of the record, the bill was amended by substituting the East Tennessee Land Company as plaintiff in place of John K. Hayward, receiver, and the plaintiff then filed its election to proceed against each defendant for damages suffered in consequence of his acts as alleged in the bill of complaint. Thereupon the case was sent to a master to assess the damages and make report to the court, together with such facts and questions of law as either party might request. On the coming in of the master's report the defendant filed exceptions thereto upon the ground that his findings were not warranted by the testimony before him, and were contrary to and against the weight of the evidence. These exceptions were severally overruled by the superior court, and a final decree entered confirming the report, and awarding the plaintiff damages as found by the master, and from this decree the defendants appealed to this court.

The evidence taken before the master was not reported, and the findings of fact made by him must be taken as true for the purposes of this case, and cannot be reviewed or revised on the exceptions taken by the defendants. Freeland v. Wright, 154 Mass. 492, 28 N.E. 678. Under the rule issued in this case the report of the entire evidence was unnecessary and uncalled for, and the master was only required, at the request of the defendants, to report evidence so far as might be material to clearly bring before the court any question of law raised before him at the hearing. Parker v. Nickerson, 137 Mass. 487-493. The master has followed this course in his report, and the defendants do not now claim that any matters are open under the exceptions but the two questions presented at the agreement. By the former opinion it was determined that each defendant held 250 shares of the capital stock of the plaintiff, issued July 3, 1889, for the value of which, under the election made as to money damages, each must account to the plaintiff; and as the shares of the plaintiff corporation at the time when the defendants took their stock had no market value because of the fact that, though the corporation had been organized, it had not begun to do business, and its stock had not been placed on the market, 'the date at which damages must be assessed must be carried forward to the date when the value of the stock was fixed.' Upon the evidence before him the master has found and fixed this date as August 1, 1890, and the value of the stock at $45 a share, to which findings the defendants except upon the ground that they are not warranted by the facts found and set out in his report.

It appears from the report that when the company was organized its total capital was placed at $2,000,000, and the par value of the shares at $100 each, and of this amount $800,000 in value of its capital stock was issued to the Phoenix Land Company, or persons whom it designated. Subsequently the par value of the stock was changed to $50 a share, and the remaining $1,200,000 of capital stock was then disposed of by the company, and issued at par, less discounts and commissions, to a large number of persons, who became stockholders, some as investors, others upon the solicitation of the secretary of the company or its agents; but the exact amount subscribed for under either of these methods was uncertain. The first issue of stock was made some time in November, 1889, and the last September 30, 1891, and all but 552 1/4 shares--the par value of which was $27,612.50--were issued before January 1, 1891. Of the shares representing this $1,200,000 of capital more than one-half was sold by the company before March 18, 1890, and the great majority of such shares prior to August 1, 1890. Sales of the stock thereafter, as found by the master, were made some at public auction in April, May, and June of the year 1890, at prices ranging from $40 to $45 a share, and in November, 1890, and January, February, March, June, July, August, and September of 1891, at prices...

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