Lydia E. Pinkham Med. Co. v. Gove

• Citation: 25 N.E.2d 332,305 Mass. 213
• Parties: LYDIA E. PINKHAM MEDICINE CO. v. GOVE.
• Decision Date: 12 February 1940
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

305 Mass. 213
25 N.E.2d 332

LYDIA E. PINKHAM MEDICINE CO.
v.
GOVE.

Supreme Judicial Court of Massachusetts, Essex.

Feb. 12, 1940.

Reservation and Report from Supreme Judicial Court, Essex County.

Petition by Lydia E. Pinkham Medicine Company against Aroline P. Gove for writ of mandamus. On reservation and report.

Writ issued.

[25 N.E.2d 333]

J. W. Worthen and E. B. Cook, both of Boston, for petitioner.

J. S. McCann and L. Withington, both of Boston, for respondent.

LUMMUS, Justice.

This petition for a writ of mandamus follows a suit in equity between the same parties, recently ended by the entry of final decree in favor of the petitioner. Lydia E. Pinkham Medicine Co. v. Gove, Mass., 9 N.E.2d 573;Id., Mass., 20 N.E.2d 482. The stock of the petitioner, a Maine corporation, is held equally be the Pinkham interests and the Gove interests, and the directors are equally divided between them in such a way that the death of a director will not affect the equality. Arthur W. Pinkham, chosen by the Pinkhams, is president, and Lydia P. Gove, chosen by the Goves, who was assistant treasurer when the petition was filed, has become treasurer since the death of her mother on May 21, 1939.

The Pinkhams and the Goves have long been unable to agree upon the policy of the corporation in imporant particulars. The deadlock was broken only by the fact that the president, Arthur W. Pinkham, was authorized by vote of the directors, on June 7, 1927, ‘to exercise general supervision and control over the various departments of the Company's business, to hire and discharge all employees therein and to issue such directions as in his judgment are proper from time to time to carry out the votes of the Board of Directors.’

We held (Mass., 9 N.E.2d 573, 579) that the circumstances required a ‘liberal construction’ of that vote, and that ‘the intent of the vote was to give the president general charge of the business as a whole, subject of course to the power of the directors to give specific directions from time to time or to modify or recall the grant.’ It was further held that under that vote the president had authority to bring suit in the name of the corporation to redress wrongs done by the Goves to the corporation. The form of the final decree ordered in the suit in equity appears in Mass., 20 N.E.2d 482. Provisions of the final decree restrain the present respondent from attempting to interfere with the general supervision and control of the corporate business by the president under the vote of June 7, 1927, and from refusing, neglecting or delaying disbursements directed by the president under that vote.

We see no reason for holding, though it is contended by the respondent, that the vote of June 7, 1927, is no longer in effect. No substantial change in the situation has taken place since we gave that vote decisive force in the suit in equity.

The present petition is brought in part to require the respondent by mandamus to pay certain employees at an increased rate of compensation established by the president, in most instances on October 19, 1936. These increases were made without the consent of the Goves, and in the belief that the Goves would not approve them. When the increases were presented to the directors for ratification on March 20, 1939, ratification failed upon a tie vote. But we think that that failure did not affect the validity of the act of the president in making the increases. The Pinkhams and the Goves differ honestly and in good faith as to the propriety and wisdom of these increases in pay.

A corporation may obtain a writ of mandamus to require a corporate officer to perform a ministerial duty owed to the corporation. Proprietors of St. Luke's Church in Chelsea v.

[25 N.E.2d 334]

Slack, 7 Cush. 226, 238, 239.American Railway-Frog Co. v. Haven, 101 Mass. 398, 403-408,3 Am.Rep. 377;J. H. Wentworth Co. v. French, 176 Mass. 442, 57 N.E. 789;Longyear v. Hardman, 219 Mass. 405, 106 N.E. 1012, Ann.Cas.1916D, 1200.Rayburn v. Guntersville Realty Co., 228 Ala. 662, 154 So. 812, 93 A.L.R. 1055, and note. See also Granara v. Italian Catholic Cemetery Association, 218 Mass. 387, 105 N.E. 1073.

The first defence is that the provision of the by-laws (Art VII, Section 7) that ‘The compensation or salaries of all other officers and employees shall be fixed by the board of directors' precluded any increase of pay of employees by the president under the vote of June 7, 1927. That provision appears in the section which begins by providing for equality of compensation as officers and directors between the Pinkhams and the Goves, and for the division among the members of each group by vote of a majority of the group of the compensation awarded to the group. Then follows the sentence in question, and, following that, appears a provision that the aggregate salaries of...