Palmbaum v. Magulsky

14 Citing cases

  1. Hellier v. Achorn

    151 N.E. 305 (Mass. 1926)   Cited 17 times

    Anderson v. Metropolitan Stock Exchange, 191 Mass. 117, 119. An agreement binding a stockholder to a vote which may be inconsistent with the performance of his duty as a stockholder is void. Guernsey v. Cook, 120 Mass. 501. Noyes v. Marsh, 123 Mass. 286. Woodruff v. Wentworth, 133 Mass. 309. Palmbaum v. Magulsky, 217 Mass. 306. It was held in Guernsey v. Cook, supra, page 502, that an agreement to secure to a stockholder an office in a corporation with a fixed salary is void as against public policy and as a fraud on the other members of the corporation.

  2. Schreiber v. Carney

    447 A.2d 17 (Del. Ch. 1982)   Cited 53 times   1 Legal Analyses
    Holding that plaintiff had standing to maintain derivative suit challenging pre-merger acts where the merger was "merely a share for share merger with a newly formed holding company, which retained the old company as a wholly owned subsidiary of the new holding company with the shareholders of the old company owning all the shares of the new holding company" and the "structure of the old and new companies [was] virtually identical"

    Such an agreement will not be enforced, as being against public policy. Teich v. Kaufman, 174 Ill.App. 306; Guernsey v. Cook, 120 Mass. 501; UPalmbaum [Palmbaum] v. Magulsky, 217 Mass. 306 [ 104 N.E. 746]." (emphasis added) 221 Ill.App. at 283.

  3. Weil v. Neary

    278 U.S. 160 (1929)   Cited 217 times
    Holding that local rules have the โ€œforce of lawโ€

    Enforcement of such contracts when actual evil does not follow would destroy the safeguards of the law and lessen the prevention of abuses. Tool Co. v. Norris, 2 Wall. 45; Woodstock Iron Co. v. Richmond Extension Co., 129 U.S. 643; Oscanyan v. Arms Co., 103 U.S. 261; Meguire v. Corwine, 101 U.S. 108; Connors v. Connolly, 86 Conn. 641; Richardson v. Crandall, 48 N.Y. 348; Palmbaum v. Magulsky, 217 Mass. 306, 308. But we must not be understood as implying that no harm resulted to the Thompson estate or its creditors.

  4. Odman v. Oleson

    319 Mass. 24 (Mass. 1946)   Cited 8 times

    Guernsey v. Cook, 120 Mass. 501. Noyes v. Marsh, 123 Mass. 286. Woodruff v. Wentworth, 133 Mass. 309, 313, 314. Palmbaum v. Magulsky, 217 Mass. 306, 308. Hellier v. Achorn, 255 Mass. 273, 280-283, 45 Am. L.R. 788. Notes, 12 Am. L.R. 1070, 71 Am. L.R. 1289.

  5. Clark v. First National Bank

    259 N.W. 211 (Iowa 1935)   Cited 2 times

    That such a contract cannot be made is quite well settled by the authorities. See Creed v. Copps, 103 Vt. 164, 152 A. 369, 71 A.L.R. 1287; Teich v. Kaufman, 174 Ill. App. 306; Woodruff v. Wentworth, 133 Mass. 309; Harris v. Scott, 67 N.H. 437, 32 A. 770; Snow v. Church, 13 App. Div. 108, 42 N.Y.S. 1072; Haldeman v. Haldeman, 176 Ky. 635, 197 S.W. 376; Palmbaum v. Magulsky, 217 Mass. 306, 104 N.E. 746; Ann. Cas. 1915D, 799; 7 R.C.L. (Corporations) par. 331; 2 Cook on Corporations, section 622; 1 Thompson on Corporations (2d Ed.) section 898. Some other questions are discussed, but we think these are the controlling questions in the case, and that the demurrers to each of the petitions of plaintiffs were properly sustained.

  6. Crooks's Estate

    175 A. 410 (Pa. 1934)   Cited 4 times

    In Weil v. Neary, 278 U.S. 160, in dealing with the suggestion that the illegal contract of the lawyers had in fact been beneficial, the court said (at pages 173-4): "But this is not a sufficient answer to the charge of illegality. The contract is contrary to public policy โ€” plainly so. What is struck at in the refusal to enforce contracts of this kind is not only actual evil results but their tendency to evil in other cases. . . . . . . Enforcement of such contracts when actual evil does not follow would destroy the safeguards of the law and lessen the prevention of abuses: Tool Co. v. Norris, 2 Wall. 45; Woodstock Iron Co. v. Richmond Extension Co., 129 U.S. 643; Oscanyan v. Arms Co., 103 U.S. 261; Meguire v. Corwine, 101 U.S. 108; Connors v. Connolly, 86 Conn. 641; Richardson v. Crandall, 48 N.Y. 348; Palmbaum v. Magulsky, 217 Mass. 306, 308."

  7. Creed v. Copps

    152 A. 369 (Vt. 1930)   Cited 8 times

    We are not concerned whether any injury has resulted. It is sufficient that this understanding was intended to give the plaintiff an undue advantage over the remaining stockholders and to deny the defendant Copps duties and functions which properly belonged to him and which he should have exercised according to his own understanding. It was a corrupt bargain and unlawful, for it was the duty of Copps to act fairly and in good faith at meetings of the stockholders and he was not justified in entering into any such agreement with the plaintiff, as is shown by the findings in this case, in order that the plaintiff might perpetrate a fraud upon the other stockholders, or gain for himself a position which he did not otherwise control. 7 R.C.L. tit. "Corporation" par. 331; Manson v. Curtis, 223 N.Y. 313, 119 N.E. 559, Ann. Cas. 1918E, 247; Jackson v. Hooper, 76 N.J. Eq. 592, 75 A. 568, 27 L.R.A. (N.S.) 658; Guernsey v. Cook, 120 Mass. 501; Palmbaum v. Magulsky, 217 Mass. 306, 104 N.E. 746, Ann. Cas. 1915D, 799; West v. Camden, 135 U.S. 507, 34 L. ed. 254, 10 Sup. Ct. 838; Hellier v. Achorn, 225 Mass. 273, 151 N.E. 305, 45 A.L.R. 788; Starbuck v. Mercantile Trust Co., 60 Conn. 553, 24 A. 32; Harvey v. Linville Imp. Co., 118 N.C. 693, 24 S.E. 489, 32 L.R.A. 265, 54 A.S.R. 749; Morel v. Hoge, 130 Ga. 625, 61 S.E. 487, 16 L.R.A. (N.S.) 1136, 14 Ann. Cas. 935. In short, the business management of a corporation is confided to its directors and they must act in behalf of the corporation.

  8. Edward G. Acker, Inc. v. Rittenberg

    152 N.E. 87 (Mass. 1926)   Cited 6 times

    The defendant contends that Acker, being a stockholder of the motors company, entered into an illegal contract to induce that company to do something in exchange for a personal benefit to himself. See Woodruff v. Wentworth, 133 Mass. 309; Palmbaum v. Magulsky, 217 Mass. 306. On its face the contract discloses no illegality. There was no agreement on the part of the plaintiff to terminate the lease or to bring about its termination.

  9. Moss v. Copelof

    126 N.E. 474 (Mass. 1920)   Cited 1 times

    The legality of the agreement of December 19, 1916, was not dependant on their consent. Palmbaum v. Magulsky, 217 Mass. 306. Finally the first request was denied rightly.

  10. Moss v. Copelof

    121 N.E. 508 (Mass. 1919)   Cited 2 times

    What is of consequence is that the jury were warranted in finding that this agreement was a dishonest one in spite of this testimony. The payment of $600 out of the funds of the corporation when nothing was due to the plaintiff (if the jury found that to be the fact) would have been a fraud upon the stockholders and the agreement that the $600 should "be applied on account of his indebtedness . . . for unpaid stock subscriptions" would have been in violation of St. 1903, c. 437, ยง 14. If so, the whole contract would have been an illegal one. See, for example, Palmbaum v. Magulsky, 217 Mass. 306. It follows that the notes sued on given pursuant to its provisions would have been illegal also and this is a defence which can be set up in an action between the parties to the notes. We have not found it necessary to consider the true construction of the sixth clause of the agreement, since we are of opinion (for the reasons stated) that the jury were warranted in finding that the agreement was an illegal one quite apart from that provision of the contract.