Taber v. Breck
| Decision Date | 20 June 1906 |
| Citation | 192 Mass. 355,78 N.E. 472 |
| Parties | TABER v. BRECK et al. (two cases). |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Jesse C. Ivy, for plaintiff.
John Lowell and James A. Lowell, for defendant Breck.
These cases were referred to a master under decretal orders which did not require a report of the evidence, but only such facts and questions of law as either party might request. Under this form of reference he declined to report the testimony in detail, and as the report is full and sets forth the facts on which his rulings of law were based, he was not obliged to submit the evidence on which these conclusions were reached. Parker v. Nickerson, 137 Mass. 487, 493; Sawyer v. Com., 185 Mass. 356, 359, 70 N.E. 438. In all the plaintiff alleged 141 exceptions to the original and supplementary reports, and although his brief presents many of them in groups, and others by single instances, yet generally they may be correctly classified as relating either to the rights of the parties under the agreements, and the declaration of trust as modified, or to adverse findings of fact made upon conflicting evidence. Upon a full consideration of these exceptions no reversible error is found except in one particular to which full reference later will be made. The partnership of which the plaintiff and decedents comprised all of the members, was a joint-stock company with transferable shares, organized under a declaration of trust. Originally it was provided that the death of a member should not work a dissolution of the firm, but those who then became lawfully entitled as owners should succeed to all the rights in the certificate held by the deceased member. At the expiration by limitation of the first partnership, it was extended for a further period, which had not expired at the time of the testator's death. This agreement of extension or renewal essentially modified the declaration of trust by proving that upon the death of either of the trustees, who then were Adams and Barney, at the election of any stockholder the partnership should be terminated, and the assets distributed among the beneficiaries in proportion to their holdings. If the form of the association was intended to give to the partnership the attributes of a corporation without taking organized corporate form while the liability to creditors for partnership debts would not be changed, as between themselves any right to contribution would be ascertained according to the shares held by each, and upon death distributees or legatees would succeed to the title and interest of the deceased partner, in such share or shares the value of which might be ascertained by an appraisal, but there would be no division or distribution of the assets as such for the firm would continue as before. Tyrrell v Washburn, 6 Allen, 466; Gleason v. McKay, 134 Mass. 419, 425; Phillips v. Blatchford, 137 Mass 510, 515; Breck v. Barney, 183 Mass. 133, 66 N.E. 643; 2 Lindley on Part. (2d Am. Ed.) 762. A bill in equity, however, would lie by the plaintiff if necessary to compel an accounting and the payment of dividends, if the trustee in the exercise of a sound discretion had refused or failed to divide accrued net profits. Phillips v. Blatchford, ubi supra; Howe v. Morse, 174 Mass. 491, 55 N.E. 213. And whatever the plaintiff's rights as a partner may have been on the death of Adams to demand an adjustment on the basis of a dissolution and final distribution according to the proprietary interest of the members, he has not chosen to exercise this option, but seeks by the first bill specific performance of the several contracts, and by the second, that an account of profits may be taken for the purpose of establishing the value of his services, which he alleges were rendered, not only under the written agreements, but also under certain additional oral contracts made with Adams, and after his death, with Barney, who as associate trustee, had succeeded to the authority of the principal trustee with a corresponding right to make such contracts in behalf of the firm. But this evidence not being reported, the master's finding that none of these oral contracts were proved is final. Freeland v. Wright, 154 Mass. 492, 28 N.E. 678; Joslin v. Goddard, 187 Mass. 165, 72 N.E. 948. In the beginning, the defendant's testator was the owner of a controlling interest in the company, and so continued until his death, when out of the entire capital of 3,000 shares he possessed 1,750, and of the remaining 1,250 the plaintiff owned 500 shares, while Barney, the third partner, held 750 shares. Breck v. Barney, ubi supra. This preponderating interest permitted him as principal trustee under the terms of the trust substantially to manage the affairs of the company as he deemed expedient, and all of the stock owned by the plaintiff had been sold to him from time to time by Adams according to the terms of the agreements. The plaintiff's right to specific performance and to an accounting is thus left on these agreements, and the first question of importance is when within the meaning of the contracts did he leave the employment of the firm, as that date determines the time when his shares were to be valued, and his right to salary ended. They each contain a clause that the plaintiff should be considered as the absolute owner 'subject only as between the parties to the agreements hereinafter mentioned.' An important distinction is to be remembered that they are not executed by the company, but only by Adams, whose obligation to repurchase the shares was his personal undertaking. For the purposes of determining the excess in price beyond the par value a full examination of the books of the partnership was required, as well as for the purpose of ascertaining the amount of unpaid dividends, or dividends which had accrued, but had not been declared, and a possible embarrassment is removed by the master's finding that the surplus shown by the partnership books is to be treated as 'accrued dividends which have not been declared'; from which it follows that the shares never have exceeded in value for each year the maximum price at which they were to be repurchased. In his bill for specific performance the plaintiff alleges that he left the employment of the firm 'after January 1, 1901,' without naming any definite time, but the master finds that on May 16, 1901, in compliance with the agreements he gave a notice in writing to the executor that as this employment had ceased he was ready to transfer the shares, and demanded a settlement. While it is manifest...
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