Howe v. Chmielinski

• Decision Date: 04 March 1921
• Citation: 130 N.E. 56,237 Mass. 532
• Parties: HOWE v. CHMIELINSKI et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

237 Mass. 532

130 N.E. 56

HOWE

v.CHMIELINSKI et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 4, 1921.

Appeal from Superior Court, Suffolk County; Franklin T. Hammond, Judge.

Bill by J. Murray Howe against Henry H. Chmielinski and others. From a decree dismissing the bill, plaintiff appeals. Decree ordered affirmed.

The bill prayed that a partnership be decreed to exist between plaintiff and Chmielinski in accordance with an agreement dated June 14, 1919; that the title to certain realty be decreed to be held by such defendant in trust for plaintiff and defendant jointly as members of such copartnership; that the partnership be dissolved; that a receiver be appointed; that defendant Chmielinski be enjoined from selling or incumbering the property; that an account be taken; and for other relief.

Charles F. Choate, Jr., and Charles P. Curtis, Jr., both of Boston, for appellant.

J. F., J. E. & D. T. O'Connell, John E. Crowley, and Ernest B. Rowe, all of Boston, for appellees.

BRALEY, J.

The findings of fact of the presiding judge being amply supported by the evidence, we take up the questions of law in the order of presentation. It is contended that, while the plaintiff and his associate shareholders under the provisions of the voluntary trust agreement may have been partners as to third parties, they did not as between themselves sustain this relation, and in the transactions relating to the sale of the property as disclosed by the record he was free to enrich himself at their expense. But as was said in Williams v. Milton, 215 Mass. 1, 6, 102 N. E. 355, 356:

‘Where persons associate themselves together to carry on business for their mutual profit, they are none the less partners because * * * their shares in the partnership are represented by certificates which are transferable and transmissible, and because * * * as a matter of convenience (if not of necessity in case of transferable and transmissible certificates) the legal title to the partnership property is taken in the name of a third person. The person in whose name the partnership property stands in such a case is perhaps in a sense a trustee. But speaking with accuracy he is an agent who for the principal's convenience holds that legal title to the principal's property.’

The eighth and twelfth articles of the trust agreement in question read as follows:

‘At any meeting shareholders may vote by proxy, and three-fourths in value of said shareholders may at any meeting fill any vacancy existing in the number of trustees, may depose any or all of the trustees, and elect others in their places, may direct the sale of the property held by the trustees, or any of it, and may change, alter, or terminate the trust herein set forth, or substitute a new trust in place thereof. A vote or agreement in writing of three-fourths in interest of said shareholders shall be binding on all the shareholders, and on the trustees.’ ‘That a majority in interest, representing three-fourths of the total value of the shares, may, as provided in article eight hereof direct the sale of the trust property, and upon such sale and the distribution among the shareholders of the proceeds of such sale in proportion to their respective interests the trusts hereof shall be deemed to be terminated and the trustees discharged from further liability hereunder.’

The trustees accordingly were managing agents subject to the control of the shareholders, and the judge correctly ruled that instead of a pure trust, a partnership existed for the purpose of carrying on business for their mutual benefit although the legal title to the property stood in the name of the trustees. Frost v. Thompson, 219 Mass. 360, 106 N. E. 1009;Dana v. Treas. & Recvr. Genl., 227 Mass. 562, 566, 567, 568, 116 N. E. 941;Priestly v. Treas. & Recvr. Genl., 230 Mass. 452, 120 N. E. 100;Horgan v. Morgan, 233 Mass. 381, 124 N. E. 32;McMurtrie v. Guiler, 183 Mass. 451, 453, 67 N. E. 358. The defendant and the plaintiff acting independently were in the market seeking to buy the property at the lowest price, when the plaintiff upon being informed of the defendant's efforts entered into an agreement with him whereby it was stipulated that neither would interfere with the other in the...