Ferdinand Lustwerk v. Lytron

The question, to be submitted to the voters at a State election, of adopting a constitutional amendment authorizing the Legislature to impose a ""graduated"" income tax, potentially more burdensome than the existing income tax, would be a question ""materially affecting . . . the property, business or assets of"" Massachusetts business corporations within G. L. c. 55, § 7, as amended through St. 1946, c. 537, § 10, so that expenditures by them for the purpose of influencing the voters to vote against the amendment would not be prohibited by § 7. Lustwerk, the holder of 392 of the 2,364 shares of the common stock of Lytron, Inc. (Lytron), and one of its directors, seeks to enjoin Lytron and its other directors (the holders of 1,832 common shares) from expending $500 for advertising, printing, mailing, and contributing ""to any committees formed . . . for the purpose of influencing the voters to vote against the so-called graduated income tax amendment 1 to the Massachusetts Constitution . . . in the tate election in November, 1962."" Lustwerk asserts that such an expenditure would be illegal under G. L. c. 55, § 7. 2 Lytron is a Massachusetts business corporation doing business in Cambridge. The record does not disclose the nature of its business. On March 9, 1962, Lytron's directors voted three to one (Lustwerk voting in the negative) to make a $500 contribution toward expenses in opposing the amendment.