Mellen v. Berg
| Decision Date | 01 June 1944 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | JOSEPH MELLEN & another v. A. ALLEN BERG, MODERN PARLOR FRAME CORP., intervener. |
March 3, 1942.
Present: FIELD, C.
J., LUMMUS, QUA DOLAN, RONAN, WILKINS, & SPALDING, JJ.
Sale, Transfer of title. Corporation, Organization. Personal Property Ownership.
In a suit in equity for specific performance of an agreement by the defendant to sell certain machinery to the plaintiffs, an intervening corporation was held entitled to the machinery as against the plaintiffs where it appeared that the corporation had been formed by the plaintiffs and five others, that the five were to and did contribute cash for stock therein, that the plaintiffs were to contribute the machinery for stock and were to be employed by the corporation, and that the corporation had acquired possession of the machinery with the plaintiffs' consent and, by arrangement with them, had paid the defendant the purchase price which they had agreed to pay him; the corporation's right to the machinery was not affected by the facts that it had not received a formal bill of sale thereof, that the plaintiffs, through no fault of the corporation, had not received certificates for their stock, and that the corporation, having employed the plaintiffs for several months, had discharged them for cause.
BILL IN EQUITY filed in the Superior Court on June 24, 1941. Modern Parlor Frame Corp. was allowed to file an intervening petition seeking to establish its title to certain machinery involved in the suit.
The intervener appealed from a final decree in favor of the plaintiffs, entered by order of Dowd, J., upon a master's report.
The case was argued at the bar in March, 1942, before Field, C.J., Donahue, Qua, & Ronan, JJ., and after the retirement of Donahue & Cox, JJ., was submitted on briefs to Lummus, Dolan, Wilkins, & Spalding, JJ.
H. M. Pakulski, for the intervener. M. Michelson, for the plaintiffs.
The defendant is the assignee under an assignment for the benefit of creditors, dated August 29, 1940, whereby a corporation named Massachusetts Frame Corp. conveyed to him all its assets, including machinery for making furniture frames which was subject to mortgages for $1,700. The plaintiffs Mellen and Card, who are brothers-in-law and were formerly interested in that corporation, seek specific performance of an oral agreement of the defendant, made in September, 1940 to sell them the machinery, subject to the mortgages, for $450, which sum the defendant had received before this bill was brought.
The defendant does not deny the contract nor the receipt of the price, and stands ready to convey the machinery to the plaintiffs or to the intervener, as the court may order. The intervener is a corporation named Modern Parlor Frame Corp., which was formed in September, 1940, to carry on the same business on the same premises. No party takes the point that an adequate remedy at law exists. Parkway, Inc. v. United States Fire Ins. Co. 314 Mass. 647 , 651.
The facts appear in a master's report which was confirmed. The machinery is installed, ready for use, on the premises now occupied by the intervener. It cannot readily be replaced in the market. Soon after the defendant agreed to sell it to the plaintiffs, one Langbort and four others, with the two plaintiffs, formed a new corporation named Modern Parlor Frame Corp., which is the intervener. The two plaintiffs were to contribute the machinery, subject to the mortgages, at a valuation of $800, and the five other incorporators were to contribute $400 each. Each of the seven was to have one seventh of the stock. The plaintiffs were also to be employed by the corporation, but no definite term of employment was agreed upon. There is no finding that there were to be contracts of employment in writing.
The others contributed their money, and the new corporation took possession of the machinery and used it with the consent of the defendant Berg and the plaintiffs. The plaintiffs were employed by the new corporation until June, 1941. In November, 1940, Berg's attorney came to the place of business of the new corporation, and in the presence of all the stockholders demanded payment from the plaintiffs of the purchase price of $450. The plaintiffs could not pay. Then it was arranged that the new corporation should advance the money for them in four equal...
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