Hussey v. Arnold

• Decision Date: 26 February 1904
• Citation: 185 Mass. 202,70 N.E. 87
• Parties: HUSSEY v. ARNOLD et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

185 Mass. 202

70 N.E. 87

HUSSEY v. ARNOLD et al.

Supreme Judicial Court of Massachusetts, Suffolk.

February 26, 1904

COUNSEL

G. W. Anderson, for W. B. Emery and others.

Geo Royal Pulsifer, for receivers.

OPINION

KNOWLTON, C.J.

Some of the defendants entered into an agreement establishing an association called 'The Boston Associates,' and appointing three trustees to conduct the business of the association, which was to be the investment, management, and use of property in real estate, in shares, in trusts and corporations, in bonds secured by mortgage upon real estate and in other similar securities, with a view to obtain income and profit for the owners. These trustees were to hold the title to all the property that was paid in or acquired, and to manage it, subject to the provisions of the agreement, as they should see fit. Either of the trustees could be removed and a successor could be appointed by three-fourths in value of the shareholders, and, if not removed, they could fill vacancies in their board caused by death or resignation or otherwise. The trust could be terminated by a writing signed by three-fourths in value of the shareholders; but, if not so terminated, it was to continue for the term of 20 years after the death of the last subscriber to the agreement. Shares of $100 each, taken by the subscribers, and represented by certificates, could be transferred, and the transferee would thereby acquire the rights and be subject to all the obligations of the original owner. Each shareholder was to be liable for the amount subscribed by him, but he was not to be liable to any third person, nor for any amount in excess of his subscription. This association became insolvent, and a suit in equity was brought, and receivers were appointed to wind up its affairs. William B. Emery and Heber E. Emery, co-partners under the name of W. H. & S. L. Emery, furnished coal to the trustees for the use of the association, for which they were not paid, and more than four months before the commencement of the suit in equity they brought an action at law against the trustees in their individual names, describing them as 'Trustees of the Boston Associates,' and attached on the writ all their right, title, and interest in and to any real estate in the county of Suffolk. At that time these trustees held in their names as trustees the title to certain real estate in Boston, which was acquired and held for the associates under this agreement. The plaintiffs in the action at law were enjoined in the suit in equity from proceeding to enforce the collection of their claim against the real estate under their attachment. They subsequently brought a petition in the suit in equity for a dissolution of the injunction, or for a decree establishing a lien in their favor upon the real estate. From an order of the superior court denying and dismissing their petition they appealed to this court.

The agreement creating the trust has peculiar provisions. The object of it, apparently, was to obtain for the associates most of the advantages belonging to corporations, without the authority of any legislative act, and with freedom from the restrictions and regulations imposed by law upon corporations. Article 12 of the agreement is as follows 'All contracts and engagements entered into by the trustees shall be in their names as trustees, and shall provide against any...