When that time expired, the case of Cobb v. Savings Bank [106 Me. 178, 76 Atl. 667, 20 Ann. Cas. 547], had not been decided. Their legal rights were then undetermined. If their defense was sustained, they would have no claims to prove. It is clearly within the power of a court in equity, in its discretion, to extend the time for proving claims. It may receive proofs, even after the time fixed for barring claims not proved, so long as the fund remains undisturbed and no new rights have accrued to others." [2] The defendant calls attention to R. S. c. 48, § 47, which provides that "all claims not presented to the commissioners within the time fixed by the court * are for ever barred." This, however, admits of no such narrow construction as would confine it to the time first fixed by the court. It means such time as during the proceedings the court under the varying conditions may ultimately fix as the final date, within which all claims may be presented, heard, and determined. [3] 2. The receivers attack the finding of the commissioners allowing the claim of the Batchelder & Snyder Company upon the law and the evidence. But it is our opinion that their finding should not be disturbed. The report of the commissioners in this proceeding is like that of a master in chancery, and a master's report, like the verdict of a jury, is not to be set aside unless clearly wrong. Paul v. Frye, 80 Me. 26, 12 Atl. 544; Lynn Shoe Co. v. Auburn Lynn Shoe Co., 103 Me. 334, 69 Atl. 569. A review of the evidence simply confirms the opinion of this court previously announced in Batchelder & Snyder Co. v. Saco Savings Bank, 108 Me. 89, 79 Atl. 15, where the validity of the plaintiff's claim was considered, and the action ordered to stand for trial. The trial has taken place and the claim established. Exceptions overruled. (108 Me. 570) STAFFORD v. BURNS. PER CURIAM. This is an action of assumpsit to recover the sum of $325, balance of commissions alleged to be due on the sale of a lot of timber land owned by the defendant. The lot was situated in Hartland, near the home of the plaintiff, while the defendant lived in Bangor. The original agreement between the parties was as follows: "Bangor, Maine, Feb. 17, 1910. "I hereby agree to give Mr. R. W. Stafford $250 commission if he sells timber lot in Hartland for $8,000. John A. Burns." It is admitted that, immediately after this agreement was signed, it was orally modified, so that the plaintiff was to receive whatever might be obtained in excess of $8,000, and that later on there was another oral modification, by which such excess should be shared equally. In an action brought by the plaintiff to recover his commission under the modified agreement, when the sale was made for $8,500, to parties who first applied to the defendant and by him were given an option of purchase at that figure, and then were sent by him to the plaintiff to show the lot, the jury having found a verdict for the plaintiff for $325 and interest. Upon defendant's motion to set aside the verdict as against the evidence it is held: 1. That the modified agreement was never canceled, but was in full force at the time of the sale. 2. That, while the evidence was somewhat conflicting, it is the opinion of the court that the jury were warranted in finding, from the personal interviews, the correspondence, and the course of dealings between the parties from the beginning of their business transactions to the end, that the plaintiff did in (Supreme Judicial Court of Maine. April 9, this instance all that he was expected to do 1912.) BROKERS (8 71*)-COMMISSION-AMOUNT. Immediately after execution of a written agreement by defendant to pay plaintiff $250 commission if he should sell a timber lot for $8,000, it was orally agreed that plaintiff should receive whatever he obtained in excess of $8,000, which oral agreement was subsequently modified, so as to entitle the parties to share equally in such excess. Held that, on a sale for $8.500, plaintiff was entitled to $250 and one-half of the excess over $8,000, making a total of $500. [Ed. Note. For other cases, see Brokers, Cent. Dig. § 56; Dec. Dig. § 71.*] in promoting a sale and that he fulfilled his obligation under the agreement. 3. That the plaintiff was entitled to the sum of $250 and one-half of the excess over $8,000, or $250 more, making a total of $500, and, having received $175, the verdict for $325 and interest should stand. Motion overruled. (76 N. H. 351) BOWDITCH et al. v. JACKSON CO. et al. (Supreme Court of New Hampshire. borough. March 5, 1912.) Hills On Motion from Supreme Judicial Court, 1. CORPORATIONS (§ 1*)-NATURE OF EXISTSomerset County. Action by Richard W. Stafford against John A. Burns. Verdict for plaintiff, and defendant moves to set it aside. Motion overruled, ENCE. The fiction that a corporation is a being independent of its stockholders is not favored in New Hampshire. [Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 1, 3-6; Dec. Dig. § 1.*] 2. CORPORATIONS (§ 180*) — DISSOLUTION POWER. cably bound for one year to vote for a sale of all the corporation's property to another comThe authority of the majority stockhold-pany, was not invalid, where there was no gain ers to dissolve the corporation depends solely to them at the expense of the corporation and upon the agreement between the incorporators, no wrong to the other stockholders. and not upon any powers granted by the stat- [Ed. Note.-For other cases, see Corporaute. tions, Cent. Dig. 88 767-776; Dec. Dig. 198.*] [Ed. Note.-For other cases, see Corporations, Cent. Dig. §§ 665-673; Dec. Dig. 8 180.*] 3. CORPORATIONS (§ 180*) MAJORITY OF STOCKHOlders. DISSOLUTION A majority in interest in a corporation are, by their contract of association, given discretionary power, with which in the absence of abuse the courts will not interfere, to close out the affairs of the company to make greater gains, as well as when it can no longer make a reasonable profit. 10. CORPORATIONS (§ 198*) — STOCKHOLDERS' MEETING-PROXIES. In view of a provision of the charter of a corporation, providing that absent members might be represented at its meetings by an agent duly authorized in writing, signed by such members, and Laws 1901, c. 68, providing that a proxy may represent more than one stockholder and one stockholder can be proxy for another, regardless of whether the charter or the general law applied, it was not unlaw[Ed. Note.-For other cases, see Corpora- ful for stockholders to be represented by other tions, Cent. Dig. 88 665-673; Dec. Dig. stockholders having the proper written author180.*] ity to so represent them. 4. PARTNERSHIP (§ 2591⁄2*) — DISSOLUTION POWER. One partner may compel a winding up of the partnership business from mere whim, in the absence of an agreement to continue the business for a fixed period of time. [Ed. Note.-For other cases, see Partnership, Dec. Dig. § 2592.*] 5. CORPORATIONS (§ 180*)-MAJORITY STOCKHOLDERS-POWERS-SALE OF PROPERTY. The action of a majority of the stockholders of a corporation, whereby, as a part of the process of winding up and dissolving the corporation, they voted to sell all its property to another company at an adequate price, under an arrangement fair, equitable, and free from fraud, was within the power impliedly given them when the corporation was formed. [Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 665-673; Dec. Dig. § 180.*] Private property cannot be taken without 12. CORPORATIONS ( 439*)-PowERS-SALE [Ed. Note.-For other cases, see Corporations, Cent. Dig. § 1774; Dec. Dig. § 439.*] CORPORATIONS (§ 180*) DISSOLUTIONSALE OF PROPERTY-AUCTION. [Ed. Note.-For other cases, see Corporations, Cent. Dig. 88 665-673; Dec. Dig. § 180.*] 7. CORPORATIONS (§ 377*)-POWERS-SALE OF CORPORATION PROPERTY. Such sale arrangement was not ultra vires and voidable as a purchase of one corporation's stock by another corporation, but the transaction in substance was an agreement whereby each stockholder of a dissolving corporation was given his option of receiving money or stock in another corporation in payment for his share of the corporate assets. [Ed. Note.-For other cases, see Corporations, Cent. Dig. §§ 1531-1534; Dec. Dig. § 377.*] poration were not entitled as a matter of right Minority stockholders of a dissolving corto have the assets of the corporation sold at public auction, instead of at private sale, as was voted by the majority stockholders. [Ed. Note. For other cases, see Corporations, Cent. Dig. 88 665-673; Dec. Dig. § 180.*] 14. CORPORATIONS (§ 621*) LIQUIDATIONRECEIVER-GROUNDS FOR APPOINTMENT. The mere fact that the affairs of the corporation were being liquidated by a majority of the stockholders did not, in the absence of a showing of cause, authorize the court, at the instance of minority stockholders, to interfere and appoint a receiver. [Ed. Note.-For other cases, see Corporations, Cent. Dig. §§ 2461-2469, 2471; Dec. Dig. § 621.*] 15. CORPORATIONS (§ 180*) DISSOLUTIONSALE OF PROPERTY-INADEQUACY OF PRICEBURDEN Of Proof. Where the minority stockholders attacked a sale of all the property of a corporation, made by the majority in the process of winding up, upon the ground that the price was inadequate, the burden was upon them to prove such inadequacy, and not upon the majority stockholders to justify their action. [Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 665-673; Dec. Dig. § 180.*] Transferred from Superior Court, Hillsborough County; Wallace, Judge. For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep'r Indexes Bill in equity by Charles P. Bowditch and | holders at $650 a share. The price to be paid others against the Jackson Company and oth- to the Jackson Company stockholders is aders to enjoin a sale of the assets of the Jack-equate, and the proposed exchange of stock son Company. Case discharged. is equitable. The officers, directors, trustees, and attorneys who were engaged in promoting the sale have acted in good faith and for the best interests of both companies, according to the best of their judgment. All the terms of the proposed transaction are fair and equitable. for defendants. PEASLEE, J. 1. The main question in this case is whether a going business corporation can be closed out and dissolved upon the motion of the majority of its stockhold The plaintiffs are stockholders of the Jack son Company, and allege in their bill that, through control exercised by common directors, the defendants were about to execute a conspiracy to sell the assets of the Jackson Company to the Nashua Company, for an inadequate price, payable in Nashua Company Tyler & Young, Remick & Hollis, Alexanstock; that in furtherance of this conspiracy, der Murchie, and Robert C. Murchie, for the officers had procured the assent of the plaintiffs. Peabody, Arnold, Batchelder & holders of 460 of the 600 shares of Jackson | Luther, and Streeter, Demond & Woodworth, Company stock to a trust agreement, whereby they were irrevocably bound for one year to vote for the sale; and that a meeting of the stockholders had been called to consider the proposed action. In the superior court, Wallace, C. J., ordered the injunction, but later so far modified it as to permit holders and against the protest of the minority. ing the meeting and passing the votes as to the sale; the same to be effective if the injunction is hereafter dissolved. The hearing on the merits was had before Plummer, J., who reported the facts and transferred the case without ruling, from the May term, 1911, of the superior court. In the fall of 1910 committees of the boards of directors of the two companies were appointed to consider the advisability of the sale and purchase. They reported recommending such sale on the basis of the Nashua Company paying in its own stock at the rate of 11⁄2 shares of $500 par value for each share of Jackson Company stock of $1,000 par value. After this recommendation was made, holders of 466 shares of Jackson Company stock entered into a trust agreement whereby their stock was transferred to certain trustees to hold the same for one year, to vote it for the proposed sale, and to distribute the proceeds of the sale and take necessary steps to wind up the company. Aside from these particulars, the trustees were left free to exercise their judgment in voting the stock, but were to make no substantial change in the business or condition of the corporation, except as above specified. After the injunction was modified, a meeting of Jackson Company stockholders was held, at which it was voted (subject to the injunction proceedings) to make the sale and wind up the company, to sell the stock of the Nashua Company not taken by Jackson Company stockholders, and to distribute the proceeds among them. At this meeting 490 shares were voted in favor of the sale and 104 against it. Of the 490 shares, 446 were voted by the trustees and the balance by individual holders or their proxies. The plaintiffs protested the legality of the action. The market value of the Jackson Company stock has been and is $975 a share, and that of the Nashua Company stock, $650. After the sale was voted, a standing offer was secured from the American Trust Company of Boston to take the Nashua Company The question is a new one in this state, although it has frequently been considered (both in cases where it was necessarily involved and those where it was not) by the courts in other states. The decisions and dicta are conflicting and are quite evenly divided. In the following cases the existence of the power is denied, though in most of them the question was not necessarily involved: Abbot v. Rubber Co., 33 Barb. (N. Y.) 578; People v. Ballard, 134 N. Y. 269, 32 N. E. 54, 17 L. R. A. 737; Kean v. Johnson, 9 N. J. Eq. 401; Forrester v. Mining Co., 21 Mont. 544, 55 Pac. 229, 353. That the power exists is decided or declared in other cases. Treadwell v. Company, 7 Gray (Mass.) 393, 66 Am. Dec. 490; Phillips v. Company, 21 R. I. 302, 43 Atl. 598, 45 L. R. A. 560; Black v. Canal Co., 22 N. J. Eq. 130, 404 (overruling Kean v. Johnson, 9 N. J. Eq. 401); Merchants', etc., Line v. Waganer, 71 Ala. 581; State v. Company, 115 Tenn. 266, 89 S. W. 741, 2 L. R. A. (N. S.) 493, 112 Am. St. Rep. 825; Tanner v. Railway, 180 Mo. 1, 79 S. W. 155, 103 Am. St. Rep. 534; Arents v. Company (C. C.) 101 Fed. 338. The only case in this state having a direct bearing upon the subject is Dow v. Railroad, 67 N. H. 1, 36 Atl. 510. In that case there was an attempt to change the business of the corporation; and while any expression of opinion on the question here involved was carefully avoided, yet the opinion of Chief Justice Doe contains an exhaustive and illuminating discussion of the nature of a corporation and the source of the power of the majority to act for it. The majority have the agency which in a partnership each partner possesses. Do they, in addition thereto, have the power each partner has to compel a dissolution? The corporation being an outgrowth of the law of partnership, it would be reasonable to expect that so important an incident to the joint undertaking as the right to terminate the enterprise would not be lost by the change in the form [1, 2] The fiction that the corporation is a pity was contemplated, because this is what being independent of those who are associat- sound business judgment dictates should be ed as its stockholders is not favored in this done. The difference between these cases state. Dow v. Railroad, supra, 67 N. H. 3, and the present one is of degree only, not of 36 Atl. 510. Decisions based upon the idea kind. The majority are not obliged to wait that there is something sacred in the life of until all possibility that the corporation can an ordinary business corporation, so that ac- go on longer has been negatived. Some of tion looking to its extermination is in the the cases have stated that such is the rule; nature of a fraud upon the state (People v. but the result of this would be to compel the Ballard, 134 N. Y. 269, 32 N. E. 54, 17 L. R. majority to continue a losing business until A. 737), are not authority in a jurisdiction their investment was entirely wiped out. To where a different view of the nature of the avoid so absurd a result, it has been said association is entertained. The question is they could close out when insolvency seemed not one of power granted by the state. It to be approaching. And so various forms of relates solely to the agreement of individuals expression have been used to indicate the with each other. time when the majority could take action. Did the stockholders who united to form the Jackson Company in 1830 understand that the business must be continued perpetually, provided a profit could be made and some stockholder objected to closing it out, or did they understand that the enterprise could be brought to an end at such time as the majority believed to be for the best interest of all concerned? The latter seems the more reasonable and probable conclusion. Much has been said in the cases upholding the right of the minority to prevent a sale and dissolution, concerning the protection of their rights and saving their property from pillage by the majority. Just how the majority, which sells its own property at the same time and for the same price it sells that of the minority, gains an advantage over the latter is not readily apparent. Cases might be supposed, and undoubtedly occur, where the majority do obtain some undue advantage from the sale. No one contends that such a sale is valid. But because the power of the majority may be abused, it does not follow that it does not exist. If such a conclusion were to be drawn, minorities would always rule. The plain common sense of the matter is that this is a business venture, to be carried on as such so long as it appears to be good business judgment to do so. When the time comes that a majority in interest believe that their affairs should be wound up and the proceeds distributed, the rational rule is that this should be done. And since the question here is of a business nature, and the limitations of the power of the majority are fixed by the understanding of the business men who made the original compact, business considerations have more than ordinary weight in determining what the contract was. [3] It is admitted on all sides that the majority may sell out if the corporation is insolvent. And when brought face to face with the question whether they must wait until the stockholders' investment is all lost before taking action, the conclusion has been that if insolvency is imminent action may be taken. And the same is true if it is imprudent to continue. 4 Thomp. Corp. § 4489, and authorities cited. One reason only is given why the power exists in these cases: It is reasonable to suppose that such author All these are fairly summed up in the statement that the majority may close out the affairs of the company when it can no longer make a reasonable profit. It is believed no court would now hold that the rights of the minority were more extensive than this rule implies. If the majority may sell to prevent greater losses, why may they not also sell to make greater gains? Bearing in mind that this is purely a business proposition, with no public rights or duties involved, there seems to be no substantial difference between the two cases, as a matter of principle. In each case the sale is made because it is of advantage to the stockholders. Whether the profit to be made is a reasonable one must be a relative matter. Three per cent. when others make 2 might be reasonable; but 3 per cent. when a sale could be made which would yield the stockholder 10 could hardly be thought an investment a reasonable person would retain. The loss to the stockholder by a failure to sell out on a basis which would yield him 10 per cent. instead of the 3 he is receiving is in fact much greater than it would be if a concern went on neither making nor losing when the investment would earn 4 per cent. elsewhere. It does not seem reasonable that the majority should have power to make a sale in the latter case, and not in the former. In neither case would the sale prevent positive loss, but in each it would result in positive gain. And the question is one of future prospects. Its decision requires the exercise of business judgment, sagacity, and power to forecast coming events. It is not an issue appropriate for trial and decision in courts, but rather one to be settled by the judgment of the men conducting the business in question. In a limited sense, the majority act as trustees for all the stockholders. When their acts are impugned by the minority, it is not the function of the court to set its judgment against theirs in settling the wisdom or policy of proposed action. By the contract of association, all questions of this nature were committed to the majority for final decision. Gamble v. Water Co., 123 N. Y. 91, 99, 25 N. E. 201, 9 L. R. A. 527. [4] The whole difficulty is probably an out [6] 2. It is urged that because the payment for the property of the Jackson Company was to be made in stock of the Nashua Company, therefore the sale was invalid, because the stockholder never agreed to embark in the Nashua Company's business. It is not necessary to examine this question now. Assuming for the purposes of this decision that the position is well taken, its effect is avoided by the provision that a stockholder may have cash instead of Nashua stock. Arrangement having thus been made whereby any stockholder can receive his share of the proceeds of the company's assets in money, his rights are not infringed by a stipulation (in the benefits of which he can share if he so elects) that stockholders may receive Nashua stock instead of money. Koehler v. Brewing Co., 228 Pa. 648, 77 Atl. 1016, 139 Am. St. Rep. 1024. growth of the early idea that a corporation was fraud in the sale and that it was for possessed peculiar attributes of longevity an inadequate price have been disproved. and sanctity. But as pointed out in Dow v. Two others causes of complaint remain to be Railroad, 67 N. H. 1, 8, 26, 36 Atl. 510, no considered. such theory prevails here. The business corporation is brought into being solely for the purpose of more conveniently carrying out the joint undertaking of the part owners. The line of distinction between this form of association and certain partnerships is but a shadowy one. It is not reasonable or natural to expect that when this boundary is passed great changes in the relation of the parties will result. A more radical change than that here claimed could not easily be imagined. In the partnership, one partner may compel a winding up from mere whim. In the absence of an agreement to go on for a fixed period of time, nothing short of a fraudulent purpose will prevent his taking valid action to close out the firm at will. Fletcher v. Reed, 131 Mass. 312; Lind. Part. *570. By the rule here contended for, the change of the association into a corporation has carried the rule to the opposite extreme. The authority to wind up is lost, and the owner of the smallest share may prevent such action, though it is desired by all his associates. The practical reasons against such a proposition are apparent. The probabilities are opposed to the idea that the associates intended to enter into such a compact. The plaintiffs now suggest that the Trust Company option is not a sufficient guaranty that the cash will be paid to them. The defendants say that they procured the option as the best available proof of their good faith in making the offer to pay cash to the dissenting stockholders. Until it was settled that the agreements were to be carried out, it would not be expected that the money to pay for the stock would be paid over, or deposited as security. It is assumed that this will now be done by the defendants, under such an order as to details of the transaction as the superior court may make, or the parties may agree upon. It is urged that the analogy of the partnership right does not apply, because the stockholder can sell his shares and so terminate his connection with a management with which he is dissatisfied. It is true he has this legal right; but it is not true that it is an adequate remedy, when a majority desire [7, 8] The claim is also made that a purto retire from the business. The proposition chase by the Jackson Company of Nashua is a practical one. It is not disposed of by Company stock is ultra vires and voidable. offering to the majority a naked legal right But the substance of this transaction is not the exercise of which will probably deprive a purchase of stock by the Jackson Comthem of a considerable share of their prop- pany. That company is to be dissolved, and erty. Partnerships are sometimes formed in the process of dissolution the proceeds of with transferable shares, but this does not its property are to be divided among its impair the right to compel a dissolution. In shareholders. The Nashua Company pays the case of special or limited partnerships, the rule is that the general law of partnership applies, unless modified by statute or special agreement. Tyrrell v. Washburn, 6 Allen (Mass.) 466. Accordingly, it was held that where shares in the firm were transferable, and additional shares were issued from time to time, a partner who wished to retire could compel a dissolution and winding up of the firm. Ib. The fact that (as in a corporation) the dissatisfied owner could sell his shares was not sufficient to take away his right to other remedies. [5] The action taken by a majority of the stockholders of the Jackson Company whereby, as a part of the process of winding up the company, they voted to sell all its property to the Nashua Company, was within the power impliedly given to them when the com $585,000 for the property. Those who desire to receive payment in stock can do so, and cash will be paid to those who do not wish to invest in the stock. So far as the Jackson Company takes the stock at all, it is merely to transfer it to those who elect to take it, or to sell it for the guaranteed price and pay the proceeds to those who wish to receive money instead of stock. If the form of the agreements and offers, taken as a whole, infringes the rule here invoked, the substance is not open to such objection. In such a case equity ought not to interfere. [9] 3. The legality of the votes passed at the meeting of the Jackson stockholders is questioned on account of the nature of the trust agreement under which the majority of the stock was then held, and because the trustees voted more than one-eighth of the en |