Snow v. Boston Blank-book Mfg. Co.

• Decision Date: 03 March 1893
• Citation: 33 N.E. 588,158 Mass. 325
• Parties: SNOW et al. v. BOSTON BLANK-BOOK MANUF'G CO. et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

158 Mass. 325

33 N.E. 588

SNOW et al. v. BOSTON BLANK-BOOK MANUF'G CO. et al.

Supreme Judicial Court of Massachusetts, Middlesex.

March 3, 1893

The facts were reported as follows by the presiding justice: "In the above-entitled cause the material facts found are hereby reported, at the request of the plaintiffs (appellants.) The court found that the defendants Luther B Lyman and Charles A. White were directors and officers of the defendant corporation; that said Lyman and White were copartners, and as such copartners sold to the defendant corporation the property and business theretofore owned and conducted by the copartners; that subsequently said corporation, having insufficient capital to successfully conduct said business, sold the property then remaining to said Lyman and White as copartners; that, both in the sale to and the purchase from said copartners, said Lyman and White both acted as directors and otherwise in behalf of said corporation in relation thereto, and under circumstances which, in the absence of laches, would give to the plaintiffs right to relief and to an account. The court did not rule as matter of law upon the pleadings that there was laches on the part of any of the plaintiffs, but found as fact upon the evidence that there was such laches as to all the plaintiffs. The court found that no actual fraud on the part of any of the defendants was shown."

Afterwards the following supplemental report was made: "In the above-entitled cause it is further reported that the cause was heard at the equity session in Suffolk. Neither party requested a report of the evidence under rule thirty-five nor was such report directed by the justice. It appeared that the defendant corporation was organized to conduct the business theretofore owned and conducted by the defendants Lyman and White, and the purchase made from Lyman and White was intended from the outset and known to all concerned; that Frank H. Little, one of the plaintiffs, was the active promoter of the said corporation, prominent in its management, and conversant with the details of its transactions with Lyman and White; that the number of stockholders was small, and their relations to each other such that the business of the corporation was in a general way known to all; that the action of Lyman and White in behalf of the corporation in the formalities connected with the original sale to and the final purchase from the corporation was open and unconcealed. All the particulars of the record were accessible to all the plaintiffs who chose to examine it. No stockholder made objection to the participation of Lyman and White in formal action for the corporation in transactions with themselves until after innocent third parties had acquired rights in the property in question, and Lyman and White had incurred new obligations with reference thereto, and a long time had elapsed thereafter, when the plaintiffs, having come to believe that Lyman and White had been guilty of fraud in the sale to and in the purchase from said corporation, instituted this action. The evidence and the contention of parties related mainly to the alleged fraud, although the plaintiffs incidentally contended that, if fraud were not...