168 Mass. 53 | Mass. | 1897
If we assume in favor of the plaintiff, without deciding, that he has alleged such facts in the conduct of the corporation and its directors as would enable him as a stockholder to obtain relief if it appeared that the acts complained of were illegal, we come to the substance of the charges of illegality. See Dunphy v. Traveller Newspaper Association, 146 Mass. 495.
The corporation was established under St. 1877, c. 98, “ for
We are of opinion that this objection is not well founded. The corporation is expressly authorized to hold real estate consisting in part of a wharf, hotel, and other public buildings. The right to hold such property includes the right to lease it so as to make it produce income. Pub. Sts. c. 105, § 6. Dupee v. Boston Water Power Co. 114 Mass. 37, 43. It would be too strict a construction of the statute to decide that a corporation which may lease real estate for profit can lease it only to be used in those kinds of business which it is authorized by its
The only other ground of objection to the lease is that it was fraudulent. But in this part of the case there are no fraudulent acts charged. It is not charged that the price to be paid was inadequate, or that the directors or corporation acted otherwise than as they deemed for the best interest of the stockholders. The lessees assumed all risks, and agreed to give the corporation one half of the net income. The effect of the lease upon the corporation property not included in the lease was to be considered, as well as other questions of policy. That the plaintiff is prevented from receiving a portion of the surplus earnings and actual profits of the company does not show fraud. It may well be for its pecuniary benefit, and that of every stockholder in the corporation, that a portion of the earnings will be used by the lessees in accordance with the terms of the lease. A general charge of fraud, without stating facts in which the fraud consists, is not enough. Nichols v. Rogers, 139 Mass. 146. Other v. Smurthwaite, L. R. 5 Eq. 437, 441. That the lease runs to persons who are directors of the corporation is a suspicious circumstance, which calls for careful scrutiny, but of itself alone it does not necessarily render the transaction void. Union Pacific Railroad v. Credit Mobilier, 135 Mass. 367, 376. Kelley v. Newburyport & Amesbury Horse Railroad, 141 Mass. 496,499, and cases cited. Such a lease may be made in good faith for the best interests of the corporation. It may be avoided or may be ratified by the corporation. Although there is constructive fraud in a contract made by all the acting directors of a corporation with themselves as individuals which renders the contract voidable, there is no such fraud in a stockholder’s voting upon a transaction between the corporation and himself. Northwest Transportation Co. v. Beatty, 12 App. Cas. 589. Gamble v. The Queen’s County Water Co. 123 N. Y. 91. Bjorngaard v. Goodhue County Bank, 49 Minn. 483. See also Twin-Lick Oil Co. v. Marbury, 91 U. S. 587; Pneumatic Gas Co. v. Berry,
In the present case the substance of all the charges is that the making of the lease was an evasion of the charter, and, it being established that such a lease might lawfully be made under the charter, no valid objection to the transaction is stated. It is not charged in the bill nor contended in argument that the directors in making the lease intended to obtain a pecuniary advantage for themselves, to the detriment of the other stockholders.
Bill dismissed.