Kelley v. Biddle

• Decision Date: 26 November 1901
• Citation: 180 Mass. 147,61 N.E. 821
• Parties: KELLEY et al. v. BIDDLE et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

180 Mass. 147

61 N.E. 821

KELLEY et al. v. BIDDLE et al.

Supreme Judicial Court of Massachusetts, Essex.

November 26, 1901

COUNSEL

C. H. Poor and E. B. Fuller, for plaintiffs.

Reddy & Reddy, for defendants.

OPINION

KNOWLTON J.

The decree in this case is in accordance with the master's report, to which no exceptions are taken. The appeal of the defendant Biddle is founded on the denial of his motion to dismiss the bill on the ground that it appears from the pleadings and the master's report that it is 'a bill seeking to enforce an illegal contract or joint undertaking inasmuch as it seeks to enforce the distribution of the alleged profits arising out of the execution of an unlawful undertaking, namely, the entering into partnership of corporations with individuals.' The findings show that the plaintiff, who was one of the creditors of the insolvent company, and the defendants Biddle and Nelson made an agreement to purchase the stock in trade of the insolvent, and to employ one Worthen, who had been general manager of the insolvent, to manage the business of finishing it up and disposing of it; and, in order to raise money to pay for the stock, agreed that each of the three parties should contribute $1,000 in money and give a note for the balance, to be indorsed by the parties. Each of these accordingly contributed this sum, and afterwards the Charles Wing Company, a corporation, which was also a creditor contributed the same sum. A few days later notes were made for use in the business, which were indorsed by all these parties, including the Charles Wing Company. Their undertaking has been completed, and this suit is brought to recover the plaintiffs' share of the balance in the hands of Biddle. The appellant contends that the arrangement was so affected with illegality by reason of the participation in it of the Charles Wing Company that a court of equity will enforce no rights which are founded on it. He relies on the case of Whittenton Mills v. Upton, 10 Gray, 582, 71 Am. Dec. 681, in which it was held that a corporation cannot legally enter into a partnership. It is doubtless true that corporations, under out laws, are not authorized to become members of an ordinary partnership; but in this case there is no ground for a contention that the final arrangement was objectionable otherwise than as being ultra vires on the part of the Charles Wing Company, and we are not prepared to hold that this objection is well founded. There is no doubt that the...