Guernsey v. Cook
| Decision Date | 08 September 1876 |
| Parties | George A. Guernsey v. James P. Cook |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Suffolk.
Judgment for the defendant.
J. G Abbott & B. Dean, for the plaintiff.
B. F Butler & J. A. Gillis, for the defendant.
OPINION
The contract declared on has been held to be the personal contract of the defendant. 117 Mass. 548. It provided in substance on the part of the defendant and Mr. Beebe, who together owned a majority of the stock of the India Company that the plaintiff should be made treasurer of that company at a stipulated salary; the plaintiff on his part agreeing to take part of their stock at par, with an agreement that it should be taken back and an allowance made for interest "in case it should be desirable for any reason to dispense with the plaintiff's service as treasurer." The question is whether such a contract is void as being against public policy. Its decision depends upon the construction which must be fairly given to the terms of the contract.
In consideration of the purchase of a part of their stock at a price named, two of the stockholders agree to secure to the purchaser the treasurership of the corporation, of which they are members, and to secure to him also a sum named, as the annual salary of the office. The purchase of the defendant's stock and the agreement relating to the office are incorporated into the contract as part of one transaction; and each agreement is the valuable consideration of the other. The contract, if reasonably susceptible of two meanings, one legal and the other not, must indeed receive an interpretation which will support rather than defeat it, and the presumption is in favor of its legality. But this contract necessarily implies that the defendant intended to derive, and the plaintiff intended to give to him, a private advantage, not shared by the other stockholders, in consideration of his election as treasurer. And there is nothing in the facts disclosed at the trial to show that such was not in fact the result of the transaction, or that the agreement in question was known and consented to by the other members of the corporation.
It was the purpose and effect of the contract to influence the defendant, in the decision of a question affecting the private rights of others, by considerations foreign to those rights. The promisee was placed under direct inducement to disregard his duties to other members of the corporation, who had a right to demand his disinterested action in the selection of suitable officers. He was in a relation of trust and confidence, which required him to look only to the best interest of the whole, uninfluenced by private gain. The contract operated as a fraud upon his associates.
In Fuller v. Dame, 18 Pick. 472, a contract was held to be contrary to public...
To continue reading
Request your trial
-
Jones v. Williams
...sec. 2772; Wiggins Ferry Co. v. Railroad, 128 Mo. 245; Lamar Water Co. v. Lamar, 128 Mo. 188; Hobbs v. McLean, 117 U.S. 567; Guernsey v. Cook, 120 Mass. 501; Lawson Contracts, sec. 389. (4) As the contract of Pulitzer it can not be specifically enforced in a proceeding to which he is not a ......
-
Wiggins Ferry Company, And Respondent v. Chicago & Alton Railroad Company, And Respondent
...must be adopted. Lamar Water Co. v. The City of Lamar, ante, p. 188; Hobbs v. McLean, 117 U.S. 567, 29 L.Ed. 940, 6 S.Ct. 870; Guernsey v. Cook, 120 Mass. 501; Lawson Contracts, sec. 389. The question then arises whether the contract construed as the plaintiff would have us construe it, is ......
-
Glazer v. Glazer
...following Massachusetts and Minnesota cases, neither of which actually holds that all shareholder agreements are void. In Guernsey v. Cook, 1876, 120 Mass. 501, the court recognized that there is nothing inherently invalid in a shareholder's voting contract assented to by all the other hold......
-
National Bank of Commerce of Kansas City v. Flanagan Mills & Elevator Co.
... ... Mo. 245; Jones v. Williams, 139 Mo. 85; ... Boonville v. Stephens, 238 Mo. 354; Hobbs v ... McLean, 117 U.S. 567; Gurnsey v. Cook, 120 ... Mass. 501; Lawson on Contracts, sec. 389. (f) All of the ... foregoing rules of interpretation apply to a contract of ... guaranty, as ... ...