Holland v. Cheshire Ry. Co.

• Decision Date: 27 February 1890
• Citation: 151 Mass. 231,24 N.E. 206
• Parties: HOLLAND v. CHESHIRE RY. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

151 Mass. 231

24 N.E. 206

HOLLAND

v.CHESHIRE RY. CO.

Supreme Judicial Court of Massachusetts, Suffolk.

Feb. 27, 1890.

Report from superior court of Suffolk county; PITMAN, Judge.

The facts were agreed, being substantially as follows: A special meeting of the stockholders of the Cheshire Railroad Company was held December 10, 1851, in pursuance of a call issued by authority of the board of directors, and stating that it was for the purpose of considering “the subject of preferred stock, for the purpose of paying off the floating debt and the bonds of the company becoming due July 1, 1852, and also any other modes of procuring means of paying said debt and bonds, and to act in relation to the above as may be thought proper.” At the said meeting the following resolutions were passed: “Voted, that the directors of the Cheshire Railroad Company be authorized to create and issue to stockholders five thousand five hundred shares of new stock, at par, of one hundred dollars per share, on the following terms and conditions, viz.: First. Every shareholder shall be entitled to subscribe for and take one new share for every three old shares which he may hold, or in that proportion for a less number, and all subscribers, as aforesaid, shall be entitled to a dividend of three dollars per share for every three old shares to one new share subscribed for, on payment of twenty per cent. on said new shares, with interest, after the first day of January next, or before the first day of February next; and on payment of said twenty per cent. the certificate of such old shares shall be surrendered, and a new certificate be issued for every three old and one new share, to be designated ‘Preferred Stock,’ and the said three old shares, and the twenty per cent. paid on the new share, shall be credited as eighty per cent. paid on four shares of preferred stock. The remaining twenty per cent. on the preferred stock shall be payable on the fifteenth day of June next, and the company shall have the same rights and remedies in the collection of said twenty per cent., and such assessments shall be regarded and treated, to all intents and purposes, as an original assessment within the original par value of said stock. ***Fourth. Every shareholder subscribing for his proportion of new stock at any time after the first day of February next shall be entitled to have his stock preferred in like manner as the above, and be entitled to all dividends declared after his subscription, adding interest from the date of the last dividend to the date of payment for said new shares.” Under these resolutions the company received old stock and cash in exchange for new until February 28, 1855, when all the new stock had been issued, and most of the old surrendered. On July 7, 1870, by vote of the directors, a committee was appointed to confer with certain holders of unpreferred stock, with authority “to arrange the same by purchase or otherwise, and to use preferred stock in so doing if they shall think best.” Under this authority confirmed by other votes of the directors the committee took up of T.M. Edwards 82 shares of common stock, giving him in exchange therefor 50 shares of preferred stock which the company had previously bought in, and held in its treasury as part of its assets. In April, 1888, the plaintiff, Henry W. Holland, who owned some of the common stock, made a tender of three shares and $100 in cash to the company, offering to pay in addition whatever sum might be due as interest under the resolutions of 1851, less dividends and interest as provided therein, and demanded in exchange therefor four shares of preferred stock, which tender and demand was refused by the company. The plaintiff then brought this action in tort, and contract for the same cause of action, for damages against the defendant company for not delivering said preferred stock to him. The case was heard by the court, without a jury, upon the pleadings and the agreed statement of facts. The finding was for the defendant, from which the plaintiff appeals.

Henry W. Holland, for plaintiff.

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