6. PARENT AND CHILD (§ 8*) — ContracT BY PARENT-AUTHORITY.

A father had no authority as such to bind an infant son by a settlement with attorneys who recovered a judgment for the infant. [Ed. Note. For other cases, see Parent and Child, Cent. Dig. §§ 100-110; Dec. Dig. § 8.*] 7. INFANTS (§ 84*)-NEXT FRIEND-AUTHORA next friend of an infant plaintiff could not bind the infant by an agreement with counsel as to the amount of the counsel fees, and accept a part of the recovery in full settlement with the counsel.

ITY.

was received to the use of the plaintiff. In this case it appears that the amount of the execution running in favor of the plaintiff was received by the defendants. They had a lien upon the money for their fees and disbursements, R. L. c. 165, § 48, and to that extent perhaps may be said to have received it in trust for themselves. But they had no lien for counsel fees. Getchell v. Clark, 5 Mass. 309; Baker v. Cook, 11 Mass. 236; R. L. c. 165, § 48; Ocean Ins. Co. v. Rider, 22

Pick. 210. The balance over and above the amount of the fees and disbursements was therefore received to the plaintiff's use. Upon this balance the defendants had no lien. Their counsel fees for services were merely a

personal claim of which they might avail themselves in this suit as in the nature of

a reduction or set-off. See Dale v. Sollett, 4 Barrows, 2133, and cases cited in notes

John J. O'Connor, for plaintiff. Walter B. and the same case in 1 Ames' Cases on Grant, for defendants:

HAMMOND, J. This is an action for money had and received, brought by a minor, through his mother as next friend, against the defendants who are attorneys at law. The answer, in addition to a general denial, sets up payment and release.

Trusts, 8. But they could have held enough money to pay their claim not upon the ground that it was received originally to their use, but upon the ground that though originally received to the plaintiff's use it ought to go to pay their claim. It is clear that at least as to so much of the proceeds of the execution as was not needed to satisfy the lien of the defendants for fees and disbursements, the only right of the defendants to retain it was by way of set-off for a debt due from the plaintiff to the defendants. And the burden was upon the defendants to show the nature and extent of that debt. It appears that the defendants held back much more than sufficient to satisfy their lien, and for this balance less the amount already paid they were answerable unless they showed to the satisfaction of the jury that their claim for counsel fees was at least equal to it. If the defendants' claim was equal to or exceeded this balance, then there should have been a verdict for the defendants; if otherwise, then for the plaintiff. And this question of the amount of the claim was for the jury. The ruling that as matter of law the damages should be limited to $1 was wrong.

It appeared that the plaintiff brought a suit by his father as his next friend against one Dana, to recover for damages for injuries received by the plaintiff. The father also brought suit in his own name for the loss of services of the plaintiff by reason of the injuries. Both suits were tried together and both plaintiffs recovered judgment-the plaintiff for $7,000 and costs and the father for $1,000 and costs. Executions were is sued, and the defendants as the attorneys of the plaintiff and his father received thereon a total of $8,353.62, of which $7,049 damages and $172.81 costs were collected upon the execution which ran in the name of the plaintiff. There was a dispute between the father and the defendants as to the amount to be retained by the latter for their services and expenditures, but finally the father agreed to take $5,158.05 in full settlement. The defendants paid that amount to him and he gave a release in full both in his individual capacity and as the plaintiff's next friend. The plaintiff being dissatisfied with this settlement, this suit is brought to recover a balance claimed to be due from the de-ly the verdict should have been for the defendants. At the trial before a jury the presiding justice at the close of the plaintiff's evidence ruled that the release was not binding on the plaintiff, and having so ruled ordered a verdict for the plaintiff for $1. The case is before us upon the plaintiff's exceptions to the order directing a verdict for $1. [1-4] Undoubtedly the burden was upon the plaintiff to show not only that the money was received by the defendants, but also that it

[5] It is argued, however, by the defendants that the ruling that the release was not binding upon the plaintiff was wrong; that on the contrary the release was a perfect bar to the action and that according

fendants on the question of liability and therefore the plaintiff was not harmed by the ruling on the question of damages, and hence that his exceptions should be overruled.

Although the record discloses no exception to this ruling as to the release, yet in view of these contentions of the defendant and of the probability that the question as to its soundness may arise at the next trial, it is deemed advisable to consider it.

For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep'r Indexes

simple to the lozenge-shaped tract; and that the petitioner is not entitled to register as appurtenant to his remaining land any right over the parcel in question except said rights of ingress and egress.

and railroad purposes only. Reserving to the | served for the benefit of the grantor's adgrantor, her heirs and assigns, the use of joining land, this deed passed title in fee said granted premises for ingress and egress to and from her land adjoining.' Then followed the usual habendum clause, 'to said railroad company, their assigns, to their own use and behoof forever.' Shortly after this deed was given the railroad company made material changes in the grade of its roadbed, blocking up an old road which had run along the river bank and building a new one through the tract so conveyed, and building partly within the limits of the land described in said deed, and partly within the limits of its adjoining railroad location, a depot. This depot was maintained until within a short time before this action was brought, when it burned down, and a new station has been erected on land a short distance to the southeast, taken from the petitioner for station purposes in January, 1910, under the provisions of chapter 463 of the Acts of 1906."

The petitioner contends that said deed conveyed to the grantee only a use "for a public road and depot and railroad purposes" and reserved a resulting use to the grantor; and that the language of the deed and the intention of the parties require such construction. We are of opinion that the judge was right in ruling that by the deed in question title to the land therein described passed to the railroad company in fee simple. The deed evidently was prepared by a person skilled in conveyancing. The granting clause and the habendum were in the usual and proper terms to transfer a fee, and the general warranty carefully reserved from its operation only "the use of said granted premises for ingress and egress to and from her lands adjoining." If it was the grantor's purpose to have the title of the land she was selling revert to her unless the use of the property for railroad purposes should be perpetual, she naturally would have inserted in the deed a technical common law condition and not a mere statement which at most is a covenant or agreement. Rawson v. Inhabitants of Uxbridge, 7 Allen, 125, 83 Am. Dec. 670; Barker v. Barrows, 138 Mass. 578; French v. Inhabitants of Quincy, 3 Allen, 9.

So far as the surrounding circumstances throw light upon the fair meaning of the instrument, they indicate that the parties intended a conveyance of the fee and not of a mere easement or restricted use. Presumably the grantor was paid full value for the land, and the grantee's purpose in buying it was to make changes in grade, construct a new public road and build a railroad station, all of a permanent character. And although the present station stands on other land it is approached from the highway over the locus.

The land court was right in ruling that, subject to rights of ingress and egress re

[2] 2. The petitioner's mother, the whole of whose title he now has, by deed dated October 14, 1864, conveyed to one Welch, the predecessor in title of the respondent Defren, two pieces of land together with that half of the fee in a town way which adjoined one of them. Following the description in the deed is this clause: "The said Battelle reserving to herself and her heirs and assigns all right to the aforesaid town road opposite the last named lot of land, in case the said road be discontinued, allowing the said Welch to pass and repass to and from his land."

The judge of the land court found that this town way was discontinued in or about 1867, and ruled that the title to that part of the fee of the old town way which is referred to by this deed is in the petitioner. He also ruled that it is all subject to a right of passing and repassing appurtenant to such portion of the land now of Defren as was conveyed to Welch by the deed under consideration. The correctness of this latter ruling is now before us.

The narrow question is whether this right of way was personal to Welch. The deed to Welch conveyed to him a title in fee not only in the two lots of land but also in onehalf of the town way which adjoined one of them. Mrs. Battelle did not attempt to retain the fee in the road by excepting it from her grant. In order that such fee might become vested in her in case the road should be discontinued she inserted in her deed a reservation or implied grant, which expressly inured to, "her heirs and assigns." Ashcroft v. Eastern R. Co., 126 Mass. 196, 30 Am. Rep. 672. The right to pass and repass over this road when discontinued was plainly left in Welch, from whose title the reservation to Mrs. Battelle was carved; and this right, together with his title to the two lots, was one that inured to his heirs and assigns by force of the habendum in his deed. This same result was arrived at by the land court by construing the clause in the deed as an agreement for the benefit of the land and as creating a right in perpetuity. Bailey v. Agawam National Bank, 190 Mass. 20, 76 N. E. 449, 3 L. R. A. (N. S.) 98, 112 Am. St. Rep. 296. But we prefer to rest it upon the ground above stated. The court rightly ruled that the title to that part of the fee of the old town way which is referred to by this deed is in the petitioner, but that it is all subject to a right of passing and repassing appurtenant to such portion of the land of Defren as was conveyed to Welch by the

CORPORATIONS (156) - CLASSIFICATION

OF STOCK-RIGHTS OF STOCKHOLDERS. The expediency of issuing common and preferred stock is left wholly to the associates who organize a corporation, and a provision authorizing preferred stock, with enumerated preferences, is a contract between all stockholders and the corporation for the division of profits. and assets.

[Ed. Note. For other cases, see Corporations, Cent. Dig. § 581-583, 593-603; Dec. Dig. 156.*]

5. CORPORATIONS (§ 156*) — CLASSIFICATION OF STOCK-RIGHTS OF STOCKHOLDERS.

deed in question, and must be so registered. of the preferred stock have received the value [3] 3. The judge found that the petitioner of their shares, with the accumulated dividends. showed title to the fee under the railroad tions, Cent. Dig. § 124; Dec. Dig. 40.*] [Ed. Note. For other cases, see Corporalocation and under its station location, and ruled that the statute permitted the regis-4. tration of such a fee subject to such easements. The land registration statute provides that "application for registration of title may be made by the person or persons who claim to own the legal estate or easements or rights in land held and possessed in fee simple." R. L. c. 128, § 18, as amended by St. 1905, c. 249, § 2. And see R. L. c. 128, §§ 88, 90. The finding of the land court that the petitioner has an estate in fee is conclusive upon us under this report, and brings the petitioner's title within the express wording of the statute. The rights of the defendant ac-its stock into common and preferred, and quired presumably by eminent domain, whether defined as easements or otherwise, are substantially permanent and practically exclusive so long as its location is used for the purposes of a railroad, and we are not to assume that these rights will be impaired in the final decree for the petitioner. Boston & Maine R. R. v. Hunt, 210 Mass. 128, 96 N. E. 140; Newton v. Perry, 163 Mass. 319, 39 N. E. 1032.

The rulings and decision of the land court are affirmed and a final decree is to be entered accordingly.

So ordered.

(211 Mass. 424)

PAGE et al. v. WHITTENTON MFG. CO. et al.

(Supreme Judicial Court of Massachusetts. Suffolk. March 8, 1912.)

1. APPEAL AND ERROR (§ 694*)-FINDINGSMASTER'S REPORT-REVIEW.

Where the evidence is not reported, the material findings of the master will not be reversed.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. § 2910; Dec. Dig. § 694.*] 2. CORPORATIONS (§ 189*)-SUIT BY MINORI TY STOCKHOLDERS INJUNCTIVE RELIEF TIME TO SUE.

Where the adoption of a plan which will create an unjust discrimination between different classes of stock is reasonably certain, minority stockholders, objecting to the plan, need not await the result of a stockholders' meeting before seeking injunctive relief.

[Ed. Note. For other cases, see Corporations, Cent. Dig. 88 706-722; Dec. Dig. § 189.*] 3. CORPORATIONS ( 40*)-STOCK-CLASSESSTATUTES.

A corporation organized under the general laws, without any classification of its capital stock, may, in accordance with St. 1903, c. 437, 88 40, 41, amend the articles of associa tion, and classify its stock into preferred and common, as authorized by section 27, and give to the preferred stock cumulative dividends before any dividends are payable on the common stock, and postponing the common stock on the distribution of the assets until the holders

Under St. 1903, c. 437, §§ 40, 41, authorizing corporations to increase or reduce their amount of the stock, a corporation classifying capital stock on the vote of a prescribed

giving the holders of the preferred the right to receive the value of their shares, with the accumulated dividends, before the holders of common stock may receive anything in the distribution of assets, may reduce the common stock, and then increase the same for the purpose of procuring assets, and in the distribution of the new shares the holders of both classes of stock may be given the same option of subscription on the number of shares outstanding after the reduction, and minority stockholders may not complain thereof.

[Ed. Note.-For other cases, see Corporations. Cent. Dig. §§ 581-583, 593-603; Dec. Dig. § 156.*]

Appeal from Supreme Judicial Court, Suffolk County.

Suit by Edwin D. Page and others against the Whittenton Manufacturing Company and others. From a final decree for defendants, complainants appeal. Affirmed.

Hemenway, Barnes & Farley and Arthur G. Mitton, for appellants. Wm. Lowell Putnam and Jas. Lowell Putnam, for appellees.

BRALEY, J. The master reports, and the plaintiffs concede, that the vote of the directors to call a meeting of the stockholders to reduce, and then increase, the common capital stock was not in pursuance of a scheme devised by the individual defendants to deprive the plaintiffs who are minority stockholders of their proportionate interest, and to reduce the value of their stock. [1] It also must be held, under the allegations of the bill, that the questions raised by the plaintiffs' exceptions were properly considered by the master as involved in the suit, and the evidence not having been reported, his findings so far

as material should not be reversed. The report leaves no doubt that the financial condition of the company required new capital, or there was danger of liquidation, and that the plan proposed by the directors for submission to the stockholders is not only feasible, but will afford the relief desired. But if the defendants acted in good faith and funds sufficiently ample to pay

corporate debts, and to purchase new machinery were needed, the plaintiffs contend, that the plan inevitably creates an unjust discrimination between the different classes of stock, and gives to the preferred stock an undue advantage at the expense of the common stock. [2] It being averred in the bill, and admitted by the answer, that the individual defendants own a majority of the entire capital stock, the adoption of the plan by the stockholders is reasonably certain, and the plaintiffs were not required to await the result of the meeting before seeking injunctive relief. Rogers v. Nichols, 186 Mass. 440, 71 N. E. 950.

[3] To decide the questions presented it becomes material to inquire into the corporate powers and organization of the company, and to ascertain the relative rights of the plaintiffs as holders of the common stock. The master states that the capital consists of 10,000. shares each of the par value of $100, divided into 8,000 shares of common and 2,000 shares of preferred stock. The preferred stock is entitled to 6 per cent. cumulative dividends before any dividend is payable on the common stock, and if more than 6 per cent. on both classes becomes available for dividends, the preferred stock is to share the excess equally with the common stock. If the corporation goes into liquidation, the holders of the common stock are postponed in the distribution of assets, until the holders of the preferred stock have received the value of their shares with all accumulated dividends. Before the enactment of St. 1902, c. 441, preferred stock was unknown to our general laws relating to the organization and powers of manufacturing corporations, although in some instances which are referred to in American Tube Co. v. Boston Machine Co., 139 Mass. 5, 9, 29 N. E. 63, this right had been granted by special charter. See, also, St. 1885, c. 349. Field v. Lamson & Goodnow Mfg. Co., 162 Mass. 388, 38 N. E. 1126, 27 L. R. A. 136. The date of the company's incorporation is not given, but we assume from statements in the report that it was organized under the general laws without any classification of its capital. St. 1851, c. 133; Gen. St. c. 61; St. 1870, c. 224; Pub. St. c. 106; Rev. Laws, c. 110. And that in accordance with the provisions of sections 40 and 41 of St. 1903, c. 437, which by section 95 repealed St. 1902, c. 441, the agreement of association was lawfully amended dividing its stock into the classes and proportions as previously stated. By section 27 of this statute, "every corporation may create two or more classes of stock with such preference, voting powers, restrictions and qualifications thereof as shall be fixed by the agreement of association ** * or in an amendwent to said agreement which may be adopted as hereinafter provided."

sify capital, the expediency of issuing two classes of stock, and the proportions which each class shall bear to the entire capital, and the preference to be given to one class over the other, are left wholly to the associates who organize the corporation, and become parties to the agreement of association in which the extent and character of the preference must be expressed, or to the determination of two-thirds of all its stock at a meeting called for the purpose where the agreement of association is so amended after organization as to provide for such classification. St. 1903, c. 437, §§ 7, 8, 40, 41. It is to be inferred that the preliminary requirements of sections 40 and 41 were followed, and the company, having been empowered to create preferred shares, could give such shares a preference not only as to dividends, but as to repayment of capital, and accumulated dividends in the event of liquidation. The provision thus adopted constituted a contract between all the stockholders and the company for the division of profits and assets. Williston v. Michigan Southern & Northern Indiana R. R., 13 Allen, 400; Roberts v. Roberts Wicks Co., 184 N. Y. 257, 77 N. E. 13, 3 L. R. A. (N. S.) 1034, 112 Am. St. Rep. 607, 6 Ann. Cas. 213; McGregor v. Home Ins. Co., 33 N. J. Eq. 181; Hackett v. Northern Pacific Ry. (C. C.) 140 Fed. 717; In re Bangor & Portmadoc Slate & Slab Co., L. R. 20 Eq. Cas. 59; In re Barrow Hæmatite Steel Co., 39 Ch. Div. 582, 602, L. R. [1900] 2 Ch. 846; In re Quebrada Ry., Land & Copper Co., 40 Ch. Div. 363. And section 26 recognizes this relation by requiring that each original certificate, and all subsequent certificates of preferred stock, and of common stock, shall have plainly written or stamped upon it a sufficient statement of the preference or limitation. By section 40 the power to reduce or increase the capital is authorized upon a majority vote of each class of stock, and under the proposed plan to raise new capital without increasing the authorized capital, it would be necessary to reduce, and then to increase, the capital stock in such proportion as would produce the sum required.

[5] The plan while not so expressed in terms, operates as a partial liquidation which would have to be borne equally by both classes of stock if the preference had been limited only to dividends. Griffiths v. Paget, 6 Ch. Div. 511. But the common stock cannot participate in any distribution of assets until the stipulated priority of the preferred stock as to both dividends and assets has been satisfied. If by the shrinkage of quick assets or of working capital, even if not sufficient to cause general liquidation, new capital must be raised by first reducing the outstanding capital, and then increasing it within the authorized limit, the common stock, which under [] But if authority is cooferied to clas- the contract assumed the burden, must be