DaPrato v. DaPrato

Final decree affirmed with costs to the defendants. This bill by a minority stockholder of a small Massachusetts corporation seeks to restrain the distribution (pursuant to a stockholders’ vote of March 4,1958) of eighty-eight shares of stock, plus notes and cash, in satisfaction of certain “open account” credits. These had long been shown on the corporate books. Although the credits were accrued in proportion to each recipient’s share holdings at the time, they purported to represent “officers’ salaries” unpaid for the period 1924-1937 and were set out in a certificate of condition as late as 1957. A master’s report was confirmed. The plaintiff appealed from a final decree dismissing the bill. There was sufficient notice of the business concerning the open account credits proposed for consideration at the 1958 meeting. Evans v. Boston Heating Co. 157 Mass. 37, 41. Cf. Bushway Ice Cream Co. v. Fred H. Bean Co. 284 Mass. 239, 243-244. The facts stipulated and the master’s report do not establish that the open account credits were irregular (see Moroni v. Brawders, 317 Mass. 48, 52-53; see also Swartz v. Sher, 344 Mass. 636, 639-640) or that they were not corporate obligations. Even if the open account credits in substance represented dividends, the facts stipulated and found concerning this perhaps informally run corporation (see Samia v. Central Oil Co. of Worcester, 339 Mass. 101, 109) do not show abuse in the creation of the credits or in their satisfaction or injury thereby to the corporation or to the plaintiff.