Merchants Discount Co. v. Federal Street Corp.

The plaintiff is a corporation, now in liquidation. In 1930 and earlier it was engaged in lending money on commercial paper, secured and unsecured. The defendant Gavin was president, the defendant Hutton was treasurer, and they with the defendant Hackett were among the directors and stockholders. Gavin and Hutton received substantial salaries, and were in charge of the business. Gavin ceased to be president in April, 1933, and Hutton ceased to be treasurer in December, 1933.

The corporate defendant was organized by Gavin in 1926. He furnished the capital and owned substantially all the capital…