Dobbins v. Peabody

Hammond, J.

This is a bill to establish and enforce a trust in favor of the plaintiffs as stockholders in the Meigs Elevated Railway Company, in the sum of $400,000, that amount being *149alleged to be the proceeds of a transfer of the charter or control of the Boston Elevated Railway Company. The case was referred to a master, and is before us upon an appeal from a decree that the plaintiffs’ exceptions to the master’s report be overruled, that the report be confirmed and that the bill be dismissed with costs.

As stated in their brief, “The substance of the plaintiff’s claim is that they were associated with the incorporator defendants, and more especially with Meigs, Towle, and Howland, in a common undertaking, to wit, to develop, finance, and bring into practical operation the Meigs system of elevated railways, in which the plaintiffs especially had been interested for a long term of years,” and that “ Out of the fact of this association for a common object . . . there springs a fiduciary relationship and a duty of fidelity to one another which requires each one to account for benefits and advantages received in the prosecution of that object.”

There can be no doubt on the facts found by the master that the plaintiffs were interested in the success of the Meigs system and that they, as well as the defendants, worked for its success, but it by no means necessarily follows that the relations between the plaintiffs and the defendants or either of them were of a fiduciary nature. The contention of the plaintiffs that Towle and Howland were employed by certain of the stockholders of the Meigs Elevated Railway Company to obtain the legislation of 1894, by which the charter was granted to the Boston Elevated Railway Company, is negatived by the master, who has found that there was no employment. For the reasons stated by the master we agree with him that the agreement of October 9,1890, did not as matter of law establish the relation of attorney and client between the parties thereto. True it was an agreement looking to the accomplishment of an end desired by all parties thereto, but neither party was to act as the agent of the other and each stood at arm’s length from the other. The finding of the master that no trust relation was created by that agreement or by the acts and statements of Towle and Howland before and after the execution of it, taken in connection with it, is not inconsistent with the other facts and must stand.

Upon the general question whether for any purpose and to *150any extent there was a trust relation between the plaintiffs and any of the defendants, the master has made an exhaustive statement of the facts and circumstances; and without going further into detail it is sufficient to say that for reasons stated by him in his report we are of opinion that his general finding to the effect that no such relation existed is amply warranted by the subsidiary material facts upon which he bases it, and that no error appears in his rulings as to the law. The allegations of the bill as to the existence of a fiduciary relation either as attorney and client or otherwise, are not sustained.

It is urged further by the plaintiffs that within the meaning of Pub. Sts. c. 105, § 9, they were associates of the incorporators, but that position is untenable. The plaintiffs were not named specifically in the act, nor had they subscribed to the stock before the date of the act of incorporation, nor had there been any subscribers to the stock before that date. The persons therein specifically named were therefore, by the plain terms of the statute, (Pub. Sts. c. 105, § 9,) the only persons in whom the franchise rested before the organization of the corporation. Lechmere Bank v. Boynton, 11 Cush. 369. Roosevelt v. Hamblin, ante, 127.

Hence the general finding of the master that “ the incorporators of the Boston Elevated Railway Company who were named as such in said act took and held the charter thereof in their own right, and that the plaintiffs have established no claim thereto or to the proceeds of the transfer of the control thereof,” must stand. As this disposes of the plaintiffs’ case it becomes unnecessary to consider the other grounds of defense; and the exceptions to the master’s report, so far as they relate thereto, become immaterial. The result is that the decree must be affirmed.

Bill dismissed with costs.