Zottu v. Electronics Heating Corp.
| Decision Date | 19 July 1956 |
| Citation | 135 N.E.2d 920,334 Mass. 442 |
| Parties | Paul D. ZOTTU v. ELECTRONICS HEATING CORP. et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Hugh S. Boyd, Boston, for plaintiff.
Daniel A. Lynch, Boston, David L. Whitney, Melrose, for receivers.
James D. St. Clair, Boston, for defendants Samuels, and others.
Before QUA, C. J., and RONAN, WILKINS, SPALDING and WILLIAMS, JJ.
The plaintiff, the holder of fifty per cent of the common stock and one of the four directors of the Electronic Heating Corp., a Massachusetts corporation, brought this bill in equity under G.L. (Ter.Ed.) c. 155, § 50, as amended, against one Samuels and one Racoosin, the remaining stockholders, each holding twenty-five per cent of the common stock and each being a director of the said corporation (one Heick was the fourth member of the board of directors, who succeeded the plaintiff's wife as a director and voted consistently with the vote of the plaintiff), alleging that the directors and stockholders were equally divided on a question affecting the general management of the corporation and that there seemed to be no way of reaching an agreement or breaking the deadlock, and praying for the appointment of a receiver.
All the stockholders agreed that a receiver should be appointed and Mr. Hall was appointed on January 21, 1955. He filed comprehensive reports fully advising the court of the financial condition of the corporation. In his reports he complained that Zottu was withholding certain property of the corporation. The latter was cited for contempt but purged himself by returning the property. He was also charged with contempt in giving false testimony. He was found guilty and committed to jail. By the end of June, 1955, it appeared to the court that there was no way of breaking the deadlock. The court ordered the corporation dissolved and granted the request of the receiver that he be discharged.
The court on June 30, 1955, appointed Mr. Snow and Mr. Good coreceivers. The fourth paragraph in the decree appointing them read as follows: 'That said receivers be and hereby are authorized and directed as soon as reasonably possible to sell and dispose of all of the assets and property (except cash on hand or deposited in banks) at public or private sale, either as a unit or separately, whichever in their opinion shall be for the best interests of the corporation its creditors and stockholders, such sale or sales to be subject to confirmation by the court.'
Zottu, so far as appears, did not submit a bid but filed a motion on August 9, 1955, alleging that there was doubt as to the authority of the receivers to sell the assets as a unit or separately as expressed by the said fourth paragraph of the decree appointing them, and praying that instructions be given to the receivers. The motion also prayed that the interest, if any, of the corporation in its trade marks be determined. A few days later he sought to amend this motion by seeking a temporary restraining order against the receivers to prevent them from opening bids on August 18, 1955, and making the sale. The motions were both denied.
Zottu contends that since the decree of June 30, 1955, adjudicated the dissolution of the corporation, such a corporation, having thereafter no right to continue its business, thereby lost its good will, and also that it abandoned whatever interest it had in its registered trade marks and so they 'are within the public domain.' There is no claim that the receivers would be able to secure a better offer if the good will and trade marks were not offered for sale with all the other assets except cash and deposits of the corporation. There was no ambiguity in the decree appointing the coreceivers as to what they should sell. The reason for the appointment of the receivers was not that the corporation was insolvent but that there was a deadlock between stockholders who control an equal number of shares. It is strange that one who holds one half of the stock should complain and should desire to have determined the rights of the coreceivers to sell the good will together with the business as a unit. The answer lies in the conduct of Zottu since the appointment of the first receiver on January 21, 1955, in organizing a new corporation which thereafter actively engaged in competition with the...
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Selmark Assocs., Inc. v. Ehrlich
...Ehrlich's desires, “it was a matter of discretion [for the trial judge] to refuse to grant an injunction.” Zottu v. Electronic Heating Corp., 334 Mass. 442, 445, 135 N.E.2d 920 (1956). Here, we see no indication that the trial judge abused his discretion, particularly in light of the fact t......
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...Mass. 560, 564 n. 2, 67 N.E.2d 145 (1946); Lynde v. Vose, 326 Mass. 621, 622-623, 96 N.E.2d 172 (1951); Zottu v. Electronic Heating Corp., 334 Mass. 442, 446, 135 N.E.2d 920 (1956). The plaintiff's position, in other words, is that we should treat the order modifying the preliminary injunct......
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Selmark Assocs., Inc. v. Ehrlich
...Despite Ehrlich's desires, "it was a matter of discretion [for the trial judge] to refuse to grant an injunction." Zottu v. Electronic Heating Corp., 334 Mass. 442, 445 (1956). Here, we see no indication that the trial judge abused his discretion, particularly in light of the fact that he g......