9 Mass. App. Ct. 865 | Mass. App. Ct. | 1980
The plaintiffs appeal from a summary judgment for the defendants entered pursuant to Mass.R.Civ.P. 56(b), 365 Mass. 824 (1974). We affirm. Out of the twelve claims for relief contained in the plaintiffs’ complaint filed on December 11,1973, only those claims seeking (1) dissolution of Tyngsborough Enterprises, Inc. (TEI), (2) cancellation of a real estate lease between TEI and Yankee Greyhound Racing, Inc. (Yankee), executed on February 22, 1974, and (3) “such other relief as . . . seems meet and proper” remained viable at the time of the judge’s allowance on January 30, 1978, of the defendants’ motion for summary judgment.
1. The plaintiffs’ claim that TEI’s dissolution was required was based on assertions that the corporation lacked a valid existence due to an error in the issuance of its capital stock and that its “surviving incorporators” were deadlocked. Nothing was advanced factually or legally to require a trial on any of those assertions. Community Natl. Bank v. Dawes, 369 Mass. 550, 558-561 (1976). O’Brion, Russell & Co. v. LeMay, 370 Mass. 243, 245 (1976). TEI came into existence when its articles of organization were filed with, and approved by, the State Secretary (G. L. c. 156B, § 12; Priest v. Essex Hat Mfg. Co., 115 Mass. 380, 381 [1874]; Whiting & Sons v. Barton, 204 Mass. 169, 171-172 [1910]; Peairs, Business Corporations § 66 [1971]), and the issuance of stock was not a condition precedent to the valid and continuing existence of the corporation. McGinty v.
2. The short answer to the claim that TEI should have been enjoined from selling or leasing its land to Yankee “unless and until [the] transfer is approved by a majority of the disinterested shareholders” is that the plaintiffs have not shown that the majority shareholder breached his duty of strict good faith to the minority interests by selling his stock to Yankee or by engaging the corporation in the lease, or that he practiced any oppressive act sufficient to invoke the principles and remedies discussed in the Donahue decision, 367 Mass, at 587-589, 592-594, 598-600. His conduct falls within the large range of discretion afforded to the controlling interests in a close corporation to establish legitimate business policy for the corporation. Wilkes v. Springside Nursing Home, Inc., 370 Mass. 842, 850-852 (1976). See also Hill, The Sale of Controlling Shares, 70 Harv. L. Rev. 986,1013-1015 (1957). We do not consider the last paragraph of TEI’s statement of purposes as limiting in any way the broad and general powers otherwise expressly stated in the articles of organization permitting transfer of the corporation’s land. The articles and the provisions of G. L. c. 156B, § 75, conferred express authority for the transfer, and the plaintiffs’ argument that the transfer was an ultra vires transaction was properly rejected. See Calnan v. Guaranty Security Corp., 271 Mass. 533, 544 (1930), and Bennett v. Florence, 346 Mass. 707, 711 (1964) (applying the cognate provisions of G. L. c. 156, § 42).
3. We decline to accept the plaintiffs’ arguments concerning an alleged improper change of corporate purposes and the alleged existence of a re-
Judgment affirmed.