Pope v. Hinckley

• Decision Date: 20 June 1911
• Citation: 209 Mass. 323,95 N.E. 798
• Parties: POPE et al. v. HINCKLEY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

209 Mass. 323

95 N.E. 798

POPE et al. v. HINCKLEY et al.

Supreme Judicial Court of Massachusetts, Norfolk.

June 20, 1911

COUNSEL

Charles E. Gross, for himself and associate trustees.

A. S Hall, for Berea College. W. B. Farr, for Freeman Hinckley and others.

OPINION

MORTON J.

This is a bill for instructions by the executors of the will and codicil of Albert A. Pope. The case was reserved for the full court on the bill, answers, and agreed facts, such decree to be entered as justice and equity may require.

The will was dated June 16, 1905, and the codicil May 28, 1906. The testator died August 10, 1909. At the date of the will he was the owner and holder of 4,968 shares of the first preferred stock of the Pope Manufacturing Company, a New Jersey corporation with its principal office in Jersey City and its general offices in Hartford, Conn., and 16,450 shares of the second preferred stock and 64,024 shares of the common stock. At the date of the codicil his holdings of first and second preferred stock had been somewhat increased. Those of the common stock remained the same. By his will the testator gave numerous legacies of shares of the first preferred stock of that company, 480 shares in all, to various persons and corporations. In August, 1907, after the execution of the codicil an about two years before the testator's death the corporation passed into the hands of receivers under proceedings begun, prosecuted and concluded in New Jersey. In consequence thereof another corporation was organized on or about December 12, 1908, under the laws of Connecticut, to which, after payment by the receivers of all the obligations of the New Jersey corporation and of the expenses of the receivership, the remaining assets were duly conveyed by the receivers pursuant to an order of the New Jersey court authorizing the same, dated November 19, 1908, and a decree dated December 29, 1908, was entered dissolving the corporation, and, in accordance with the statute in New Jersey declaring its charter forfeited and void.

The Connecticut corporation was formed in the interests of the testator and of such other stockholders of the New Jersey corporation as chose to come in for the purpose of acquiring the assets and succeeding to and carrying on the business of the New Jersey corporation. Pending the receivership proceedings and for the purpose of carrying out the plans thus instituted, the testator and other stockholders in the New Jersey corporation deposited their stock with the Central TrustCompany of New York, and that company issued to them negotiable voting trust certificates which were to be exchanged, and which eventually were exchanged, for stock in the new corporation at the rate of 10 shares of first preferred stock of the New Jersey corporation for 7 1/2 shares of the preferred stock and 8 3/10 shares of the common stock of the new corporation, and at the rate of 10 shares of the second preferred stock of the New Jersey corporation for 2 shares of the common stock of the new corporation. The exchange was not made by the testator during his lifetime but was made by his executors shortly after his death, pursuant to the scheme that he and other stockholders of the New Jersey corporation had thus entered into. The number of shares in the new corporation received by the executors was 4,090 1/2 shares of the preferred stock and 6, 458 82/100 shares of the common stock, and they still hold said shares with the exception of the fractions, which have been sold. Trust certificates representing 2,000 shares of the common stock of the new corporation had been sold by the conservator of the testator before his death by order of the probate court of Norfolk county. Subsequent to the decree dissolving the New Jersey corporation a decree was entered on August 3, 1909, that there should be paid to the persons who had not deposited or should not deposit their first preferred stock with the Central Trust Company but elected to take cash therefor, a dividend of $41.277 on each share of the first preferred stock of the New Jersey corporation, which the court found to be the value thereof based on the assets of the corporation after the payment of all its obligations and of the expenses of the receivership. Shortly afterwards, on August 10, 1909, an order was entered discharging the receivers from any further duty or responsibility in respect to their trust as receivers and thus terminating the receivership. The capital stock of the New Jersey corporation was $22,500,000, consisting of $2,500,000 first preferred stock, $10,000,000 of second preferred stock, and $10,000,000 of common stock. The capital stock of the new corporation is $6,500,000, of which $2,500,000 is preferred...