Mellen v. Modern Parlor Frame Corp.

• Decision Date: 28 May 1947
• Citation: 321 Mass. 305,73 N.E.2d 247
• Parties: MELLEN et al. v. MODERN PARLOR FRAME CORPORATION et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

321 Mass. 305

73 N.E.2d 247

MELLEN et al.

v.MODERN PARLOR FRAME CORPORATION et al.

Supreme Judicial Court of Massachusetts, Suffolk.

May 28, 1947.

Exceptions from Superior Court, Suffolk County; Collins, Judge.

Proceeding by Joseph Mellen and another for a writ of mandamus to compel the Modern Parlor Frame Corporation and others to permit petitioners to inspect named respondent's books and records. Petition dismissed, and petitioners bring exceptions.

Exceptions sustained.

M. Michelson, of Boston, for plaintiffs.

H. M. Pakulski, of Boston, for defendants.

Before FIELD, C. J., and QUA, RONAN, WILKINS, and SPALDING, JJ.

RONAN, Justice.

This is a petition for a writ of mandamus to compel the respondents to permit the petitioners to inspect the stock book and various other books and records of the corporate respondent. The petitioners excepted to the refusal of the judge to grant certain requests for rulings, and to his order dismissing the petition.

No oral evidence was introduced at the hearing upon the petition, but instead the parties submitted a written statement of facts agreed upon, which they stipulated should be considered ‘not as a case stated but in the place of evidence,’ and to which was appended a copy of the record in a previous suit to be ‘used as evidence.’ This was not a statement of all the material facts leaving open only the application of the correct principles of law to the facts stated, but the statement was a recital of evidence from which the judge was to find the facts and apply the governing principles of law. The agreement of the parties was not as to the facts but rather as to what should be introduced as evidence. Frati v. Jannini, 226 Mass. 430, 115 N.E. 746;Pequod Realty Corp. v. Jeffries, 314 Mass. 713, 51 N.E.2d 308;King Features Syndicate, Inc., v. Cape Cod Broadcasting Co. Inc., 317 Mass. 652, 59 N.E.2d 481.

There is nothing in the record indicating that the decision resulted from any discretionary action of the judge. He denied certain requests of the petitioners for rulings, and as a consequence dismissed the petition as matter of law. We inquire whether there was error of law in the denial of these requests; if there was, then the decision must be reversed. Ransom v. City of Boston, 193 Mass. 537, 79 N.E. 823;Duffey v. School Committee of Town of Hopkinton, 236 Mass. 5, 127 N.E. 540;Peckham v. Mayor of Fall River, 253 Mass. 590, 149 N.E. 622;Shawmut Mills v. Board of Assessors of City of Fall River, 271 Mass. 358, 171 N.E. 434;Elmer v. Commissioner of Insurance, 304 Mass. 194, 23 N.E.2d 95.

The principal contention of the petitioners is that there was error in denying their second request for a ruling that they were stockholders, and they say that their status as such was adjudicated in Mellen v. Berg, 316 Mass. 252, 55 N.E.2d 463. If the petitioners were not stockholders, then they would have no standing to maintain the petition. The refusal to grant this request went to the heart of the petitioners' case. We must examine the record in the previous case, which was a suit in equity to determine the ownership of certain machines, in order to determine whether the status of the present petitioners was necessarily there involved and decided. It appears from the record in that suit that they were the principal stockholders and had been employed as managers by a corporation which made an assignment to one Berg for the benefit of its creditors in August, 1940; that the petitioners soon thereafter, together with four employees and another, organized the respondent corporation; that each of these latter five persons agreed to contribute and did contribute $400 to the capital for which they were to receive one seventh of the stock; and that the petitioners were each to receive a like share of the stock in exchange for the machinery used by the former corporation, which was difficult to replace and was evaluated (for the purpose of issuing the stock) at $800 as then located and set up in the premises but for which they agreed to pay Berg $450, and in addition they were to be employed by the respondent corporation. Berg in November, 1940, demanded payment for the machinery, but the petitioners were unable to pay and it was arranged that the corporation should advance the money for them, which it did by paying $450 to Berg. No shares of stock have been issued to the petitioners, and they have not paid the corporation any part of the $450. The petitioners, upon leaving their employment in June, 1941, brought that bill in equity against Berg, alleging that they had made an oral agreement with him to purchase the machinery for $450, which amount had been paid to Berg, and praying that Berg be ordered to perform that agreement. The respondent corporation intervened and filed a petition alleging that shares of ‘stock issued or to be issued’ to the petitioners were to be paid for by them by the transfer to the corporation of the machinery. The ownership of the machinery as between these petitioners and the respondent corporation was the issue presented for decision in that suit. The money paid to Berg came from an advancement or loan made by the corporation to these petitioners, and the legal title acquired from Berg and the equitable title which they had by virtue of their agreement with Berg were transferred to the respondent corporation as their contribution to the capital. If, as they contended in that suit, they had not been paid anything for their contribution, the title to this machinery, which could not be readily purchased in the open market, could upon the payment of the loss be ordered transferred to them. Failure of consideration thus became one of the material...