ENDURING EQUITY IN THE CLOSE CORPORATION

Authors

Lyman Johnson, Washington and Lee University School of Law

Abstract

This commemorative reflection on Wilkes v. Springside Nursing Home,, Inc. develops the theme of change/sameness in connection with equity—the source of the fiduciary duties which stood, as they often do in close corporations, as the centerpiece in Wilkes. Equity’s role in the Western legal tradition began, of course, long before Wilkes, and it endures today in the law of close corporations precisely because, ironically, it is so adaptable. Parts I, II, and III of this Article sketch the larger milieu of the Wilkes case, where details about place, industry, and company are rich in their historic particulars but where too endless change is at work in the perennial quest for survival. Part I describes the city, Pittsfield, Massachusetts, where the focal point of litigation—Springside Nursing Home, Inc. (Springside)—was located. Part II tells a bit about the key industry in the case, nursing homes, from the early 1950s to the mid-1970s—the period spanning the company’s origins to the Supreme Court decision in Wilkes. Part III highlights a few noteworthy, but little noted, facts about Springside itself. Part IV hones in on the dispute between Stanley Wilkes and his fellow shareholders in Wilkes v. Springside Nursing Home, Inc., and on how the Massachusetts Supreme Judicial Court, in resolving that dispute, re-fashioned the equitable concerns animating thelandmark Donahue v. Rodd Electrotype Company decision. Part IV also places the Wilkes decision in a broader legal context— where it is seen as no aberration—and elaborates on how and why, in 2011, equity endures, by taking account of the inevitable flux in business relations in a way which static law does not. Equity endures even as it continually eludes law’s attempted subduing by rules, with the result that equity itself must still be endured by those involved in close corporations.

Recommended Citation

Lyman Johnson, Washington and Lee University School of Law, ENDURING EQUITY IN THE CLOSE CORPORATION, 33 W. New Eng. L. Rev. 313 (2011), https://digitalcommons.law.wne.edu/lawreview/vol33/iss2/4