Hellier v. Achorn

• Citation: 151 N.E. 305,255 Mass. 273
• Parties: HELLIER v. ACHORN et al. (two cases).
• Decision Date: 31 March 1926
• Court: United States State Supreme Judicial Court of Massachusetts

255 Mass. 273

151 N.E. 305

HELLIER

v.ACHORN et al. (two cases).

Supreme Judicial Court of Massachusetts, Suffolk.

March 31, 1926.

Exceptions from Superior Court, Suffolk County; Wait, Judge.

Separate actions by Charles E. Hellier against Edgar O. Achorn and others, executors of the will of Robert M. Morse. Verdicts were directed for defendants in each case, and plaintiff excepts. Exceptions overruled.

A. Berenson and T. W. Morris, both of Boston, for plaintiff.

E. F. McClennen, of Boston, for defendants.

SANDERSON, J.

The first of these actions, with a declaration in eight counts, is brought against the executors of the will of Robert M. Morse for breach of contract; the second is in tort for conversion of a certificate or certificates for twenty-nine hundred shares of stock of the Elkhorn Coal & Coke Company, a Maine corporation, and a certificate or certificates for eleven hundred and twenty-five shares of common stock of the Big Sandy Company, a Maine corporation. The answer to the first action, after making a general denial, alleges, among other things, that the contract is against public policy and void, that the agreement was within the statute of frauds and is not in writing, that if any contract was made it has been performed, and that the plaintiff expressly or by conduct has excused further performance.

The plaintiff, as a law student, entered Mr. Morse's office in 1888, and for many years continued to be associated with him under an arrangement by which Mr. Morse was to pay him a fixed sum annually for general assistance rendered in legal matters, and additional compensation for special work. The plaintiff also had the right to practice law on his own account.

In 1894, a certificate for fifteen thousand shares of stock in the Elkhorn Coal & Coke Company, a corporation organized under the laws of Virginia, was issued to Mr. Morse. Five hundred of these shares were disposed of, and at a later time, upon a reduction in the capital stock of the corporation, Mr. Morse's holding was represented by a certificate for twenty-nine hundred shares. A Maine corporation called the Elkhorn Coal & Coke Corporation was organized to take over the assets of the Virginia company, and a certificate for twenty-nine hundred shares in the new corporation was issued to Mr. Morse as the equivalent for his stock in the Virginia company.

In 1904, a certificate for eleven hundred and twenty-five shares of the capital stock of the Big Sandy Company, a corporation organized under the laws of Virginia, was issued to Mr. Morse. A Maine corporation (the Big Sandy Corporation) was organized to take over the assets of this Virginia company, and Mr. Morse, at the time of his death, either had a certificate for the shares in the Virginia corporation or had exchanged it for the same number of shares in the Big Sandy Corporation. The Elkhorn Company of Virginia sold its landed property to the Big Sandy Company of Virginia and took in payment stock of the latter company, and this stock became its only asset. In 1905, after stock of the Big Sandy Company was exchanged, share for share, for stock in the Big Sandy Corporation of Maine, the Elkhorn Corporation of Maine held fourteen thousand two hundred and fifty-seven shares of stock in the Big Sandy Corporation of Maine. This latter corporation had a capital of $5,000,000 but the ten thousand first preferred shares were without voting rights. The ten thousand second preferred shares and the outstanding common shares were entitled to vote. The right to vote the Big Sandy Company stock held by the Elkhorn Coal & Coke Corporation was given the attorney for the Welds, and the plaintiff, jointly, in 1909. The auditor found that, although there were forty thousand shares of second preferred and common stock of the company at this time, many of these shares were in the treasury, and that the shares owned by the Elkhorn Coal & Coke Corporation controlled the Big Sandy Corporation.

The case was tried to a jury upon the auditor's report and other evidence. At the close of the evidence the defendants filed a motion for directed verdicts, which was at first denied, and certain questions were submitted to be answered. Before the jury had reported answers to the questions they were recalled and by direction of the trial judge returned a verdict for the defendant in each case. The plaintiff's exception to the right of the judge to order a verdict after questions had been submitted to the jury is without merit.

Upon the findings of the auditor the contract alleged by the plaintiff was not made and there was no breach of contract; the stock alleged to have been converted was not owned by the plaintiff and there was no conversion. But, in deciding whether the orders directing verdicts for the defendants were right, it must be assumed that the jury would take the view of the evidence most favorable to the plaintiff and follow the auditor's report only in so far as there was no evidence tending to contradict or modify it. Upon the plaintiff's testimony the jury could have found that in 1894 he owned certain shares in the Elkhorn Coal & Coke Company of Virginia, and at the request of Mr. Morse to recoup him from his losses gave him the fourteen thousand five hundred shares of this stock above referred to; that the plaintiff said to Mr. Morse when the request for stock was made:

‘Well, Mr. Morse, I must protect my control of this situation,’

-and that he had said to bondholders that they would get their money back and that they were looking to him to do it and he must be protected in doing it. Mr. Morse said:

‘Of course, Hellier, I will always protect your control so that you can work out this for the interest of the bondholders and for the corporation. * * * As long as you hold your stock, I will hold mine. You shall have my proxy, and I will protect you and do everything I can to aid you in working out this matter and protect you while you are doing it,’

-and the plaintiff told Mr. Morse it might take years to do it; and Mr. Morse said he would hold his stock and the plaintiff would hold his until the property was sold; that they would not sell their stock but sell the property; that the plaintiff told Mr. Morse he would do his best for the corporation, and Mr. Morse said he would protect the plaintiff in doing that as long as he did his best for the corporation, and the plaintiff said to Mr. Morse that he would give him the stock on those conditions.

The jury could further have found that in 1904 the plaintiff owned certain shares of the common stock of the Big Sandy Company, of Virginia, and at Mr. Morse's request gave him without consideration the shares of stock in that company above referred to. Upon the plaintiff's testimony he told Mr. Morse that the Elkhorn Company had control of the Big Sandy and the plaintiff's control of Elkhorn stock through Mr. Morse's proxy carried with it control of Big Sandy; that Mr. Morse said he reiterated and affirmed the conditions and would abide by them; that there was no change in the arrangement or agreement with Mr. Morse with respect to control of the company, or about his holding stock until the plaintiff had opportunity to work the proposition out, at the time when the stock was reduced; that Mr. Morse agreed to hold this stock just the same as the other. Mr. Morse said it was his duty to see that the corporation protected the plaintiff's work for the protection of the corporation, the bondholders, creditors and stockholders; that he would see that the plaintiff had a square deal and do everything he could to see that the plaintiff was properly compensated for his work; that he agreed to give the plaintiff protection in his control; and that giving the right to vote the Elkhorn stock to the attorney for the Welds and the plaintiff jointly would not destroy that control. The plaintiff also testified in substance that the stock in the Maine corporations was held exactly like the stock in the Virginia corporations.

In May, 1919, Mr. Morse wrote the plaintiff that he thought a receiver should be appointed for Big Sandy. In reply the plaintiff wrote that Big Sandy had no debts or guaranties and was not likely to be embarrassed, and that if he could not get the results he would be glad to stand aside and let some one else try. The plaintiff resigned as president about the end of June, 1919. His testimony as to the facts leading up to this resignation is in substance that on June 19, 1919, he received a telegram from Mr. Morse and substantially all the Boston stockholders containing the following statement:

‘We have agreed upon the reorganization of Elkhorn and Big Sandy and request you to return here at once.’

At this time both Mr. Morse and the Weld interests wanted the property sold. The plaintiff next saw Mr. Morse on June 21 at Falmouth and Mr. Morse informed him that one French had procured a customer to purchase the property for $2,000,000 from parties who were unwilling to deal with the plaintiff, and that in order to put the sale through it would be necessary for Mr. Morse to take charge of the property. The plaintiff stated that he was willing to have these other men employed if the directors were willing to have them make the effort to bring about the sale. He was willing that $2,000,000 should be received for the property and if he was a stumbling block in negotiations he would be willing to have the sale go through with somebody else conducting it. He testified that he did not intend to agree to include stock of the Kentland Company owned by the Big Sandy Company in the sale for that price. The plaintiff said he did not believe French had an offer, and Mr. Morse said he was sure he had; and the plaintiff thought Mr. Morse believed it. Mr. Morse told the plaintiff that nothing would be done that did not have the plaintiff's approval. The plaintiff testified that he did not intend to give up his contract or control and there was no...