Marshall v. Landau

• Decision Date: 29 January 1941
• Citation: 308 Mass. 239,31 N.E.2d 540
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: DAVID A. MARSHALL, receiver, v. SAMUEL LANDAU & another.

308 Mass. 239

31 N.E.2d 540

DAVID A. MARSHALL, receiver, v. SAMUEL LANDAU & another.

Supreme Judicial Court of Massachusetts, Suffolk.

January 29, 1941

January 8, 1941.

Present: FIELD, C.

J., DONAHUE LUMMUS, COX, & RONAN, JJ.

Contract, Parties.

An agreement between purported owners of all the capital stock of a corporation and a purchaser of such stock that the purchaser would pay debts of the corporation could not be enforced by a receiver of the corporation afterwards appointed although such purchaser had taken and temporarily held possession of the corporation's business under such agreement.

BILL IN EQUITY filed in the Superior Court on December 15, 1939, against Samuel Landau, hereinafter called the defendant, and S. &amp M. Sales Co., Inc., hereinafter called the corporate defendant.

After a hearing by Swift, J., a final decree was entered by order of Brogna, J.

C. W. Spencer, (P.

D. Turner with him,) for the defendant Landau.

I. N. Samuels, (D.

A. Marshall with him,) for the plaintiff.

RONAN, J. The plaintiff, who was appointed receiver on July 25, 1939, of Guthro & Harding, Inc., a corporation which had been conducting a restaurant and a tavern in Boston, brings this bill to establish an indebtedness against the defendant Landau who, it is alleged, had entered into an agreement with Guthro & Harding, Inc. (hereafter referred to as the corporation) in June, 1939, to purchase the assets of the corporation upon the payment of $925 and assumption and payment of the debts of the corporation; it is also alleged that Landau (herein referred to as the defendant) took possession of the assets of the corporation and has neglected to pay its creditors with the exception of a single creditor -- its lessor. The bill further seeks to reach and apply in satisfaction of the indebtedness of the defendant his shares of stock in the corporate defendant.

The defendant appealed from a final decree ordering him to pay $3,233.92 with costs to the plaintiff.

The corporation since its organization in 1934, had conducted a restaurant and tavern in Boston, but, its business having become unprofitable, the directors on May 1, 1939, authorized its treasurer, Frank Lang, to procure a purchaser for its restaurant and tavern. Lang and one Miraglia (an attorney who represented Lang and other stockholders and had also acted as attorney for the corporation) met the defendant and others at various times in reference to a sale of the capital stock of the corporation, which consisted of ten shares pledged with the mortgagee of the personal property of the corporation. As a result of these conferences one Mitchell, who was an attorney for the corporate defendant, all the stock in which with the exception of two qualifying shares was owned by the defendant, drafted an agreement by which Lang, one Gray and one Abrams, who purported to be the owners of all the stock of the corporation, agreed to sell the ten outstanding shares of stock or their interest in them to one Stevenson -- the nominee of the defendant -- for the sum of $925, and to procure a lease for Stevenson. The latter was to assume and pay all the indebtedness of the corporation up to $4,500, and the sellers were to assume and pay any in excess of this last mentioned amount. The down payment of $925 was to be turned over to Miraglia who was to hold $500 of it until certain conditions were complied with, including the securing of a new lease for Stevenson. The defendant, Mitchell, one Weiner and Mitchell's brother, an accountant, came to the restaurant on the evening of July 1, 1939, and met Lang and Miraglia. Lang was dissatisfied with the provision in the agreement limiting the assumption of debts to $4,500, but he signed the agreement which already had been signed by Stevenson. Miraglia was to procure the signatures of Gray and Abrams. Lang, however, took the written agreement and retained it until he turned it over to the plaintiff in September, 1939. Mitchell drew a check on the corporate defendant payable to Miraglia in the sum of $925 and gave it to him. But Lang was unwilling to sell the stock unless the defendant agreed to assume all the indebtedness of the corporation, and there was evidence that on that same night the defendant agreed to pay all the indebtedness except what was owed by the corporation for attorney's fees and taxes. Mitchell's brother took account of stock, Weiner tended the bar, and the premises were turned over at midnight to the defendant, who had a new lock put upon the door. Within a few days the old lease which ran to Lang was cancelled and a new one was...