Cobb v. Fogg , 166 Mass. 466 ( 1896 )

Morton, J.

The only questions reserved by the report are those arising on the motion to dismiss by reason of the death of one of the defendants, and on the motion of the plaintiffs that the report be accepted and a final decree entered, and that of the defendants for a decree on the report as it stands. There were also motions by the defendants to recommit the report, on the ground that they had received copies of it only after it was filed, without opportunity to file objections under Rule 31 in equity proceedings, and that they might be allowed to amend by pleading multifariousness. The presiding justice overruled the motion to recommit, on the ground that the defendants’ rights as stated by them were preserved by the master’s report, and in regard to the motion for leave to amend stated that he should not allow it for the purpose of taking a technical objection at that stage, and that, so far as the defendants’ object was to avail themselves of the defence that the plaintiffs were not entitled to relief in equity, that would be open to them. No appeal from or exception to, the rulings of the presiding justice on these last two motions was taken by the defendants, and we do not see, therefore, how any question arising upon them is before us. We may remark, however, that if his rulings on these matters did not relate to matters addressed to his discretion, and were the subject of exception or appeal, and were properly before us, we see no reason to doubt, on such facts as appear, that he was right in declining to allow the motion to amend at the stage at which it was presented, and in overruling the motion to recommit. A draft report was furnished to defendants’ counsel, and after more than five days a hearing was had and amendments made at their suggestion. No objections appear to have been filed or offered for filing at any time, and the point that the master did not allow the defendants opportunity to file objections was not taken till the hearing before the single justice, several months after the filing of the report, of which the defendants do not contend that they had not notice. If they had any objections to the report, we think that they must be deemed to have waived them. The objection of multifariousness was not set up in the answers, and was not taken till the hearing before the master, several years after the filing of the bill, and after the suits at law had been decided in the defendants’ favor, and when the statute of limitations would have been a bar to a new suit on the note. We think that it clearly came too late. Jones v. Keen, 115 Mass. 170.

We see no ground on which the motion to dismiss should have been granted. The bill was brought to compel Fogg to deliver up the note, and to obtain judgment for the balance due on it against the makers, J. and A. Tirrell and Company. So far as the bill seeks to obtain judgment against the makers, it is obvious that the death of one of the joint contractors did not causé the suit to abate; (Pub. Sts. c. 165, § 12; New Haven & Northampton Co. v. Hayden, 119 Mass. 361; Pingree v. Coffin, 12 Gray, 288, 314, 315;) or operate to deprive the survivors of any defences which they might have to the note which were properly pleaded. " All those were still open to them. So far as the bill seeks to compel Fogg to surrender the note, it is manifest that the decree must run against him alone. And though the firm of Tirrell and Company were properly made parties as makers of the note, (Sears v. Carrier, 4 Allen, 339,) the death of one member of the firm cannot affect the plaintiffs’ right to a decree against Fogg if they are otherwise entitled to it. The case would be entirely different if the bill sought for an accounting in respect of the partnership matters. Towle v. Pierce, 12 Met. 329. Fourth National Bank of New York v. Carrollton Railroad, 11 Wall. 624.

The defendants further contend that the judgment in Cobb v. Tirrell, 141 Mass. 459, is a bar to this suit. Assuming that under the pleadings this defence was open to them, we do not think that it entitles them to a decree. It appears from the master’s report that the facts in regard to the commencement and prosecution of the action of Cobb v. Tirrell were in evidence before him, and that the reports of the case in 137 Mass. 143 and 141 Mass. 459 were read, as well as a copy of the rescript and the certificate of the clerk as to the recovering of judgment and the issuing of execution. .

The opinion of the court in 141 Mass. 459 shows that judgment was not rendered for the defendants on the merits of the case, but on the ground that the plaintiffs did not have possession of the note, and that their right to it as against Fogg could not be tried in that action. It is clear that the issues actually tried and determined in that case were entirely different from those involved in this case; and we think, therefore, that the judgment did not operate as a bar, (Foye v. Patch, 132 Mass. 105, and Watts v. Watts, 160 Mass. 464, 465,) and that the pendency of that action did not operate to abate this.

The defendants also contend that the transaction in regard to the note was a sale by the plaintiffs and a purchase by Fogg, and not a part of a composition settlement between Tirrell and Company and their creditors. They concede that, if it was a part of a composition settlement, the plaintiffs are entitled to the. relief which they seek. The evidence is not reported, and the master does not state expressly whether the note was given up by the plaintiffs as part of a composition ■ settlement; but it is evident that he must- have found so, and that that forms the basis of his finding in favor of the plaintiffs; and without going into the matter in detail, we think that this conclusion was well warranted by the facts reported and found by the master. The agreement between the firm and Fogg, which was executed in the latter part of December, 1879, though dated August 9,1879, expressly provides, amongst other things, that “ Whereas the said party of the first part (Fogg) has agreed to settle up the debts of the said firm and of the individual members thereof under a composition with their creditors,” it is agreed that the partnership property shall be sold, and out of the proceeds he shall be reimbursed and indemnified for money paid out by him and for which he shall become liable “ under the terms of the composition aforesaid.” This agreement, which was clearly competent against Fogg, who was a party to it, would justify a finding that the transaction by which the plaintiffs were led to give up their note and to take notes therefor for thirty-five per cent indorsed by Fogg, was a part of a composition settlement. And the manner in which the accounts were kept, and the business conducted, and the property finally disposed of, and the other facts found by the master, especially the fact that Fogg had in his possession, and indorsed and delivered to some of the creditors, including the plaintiffs, the same notes for thirty-five per cent which had been prepared for Albert Tirrell to indorse under the composition agreement of May 1, are all consistent with this view.

The defendants argue that the master was not justified in finding, as he must have found, that Kyle was the agent of Fogg, and of Tirrell and Company. But on the facts reported we think that the master’s finding was clearly justifiable, and that Fogg and Tirrell and Company were bound by his representations. Kyle had been in the employ of Tirrell and Company. He obtained signatures, presumably on their behalf, to the agreement of May 1. Later, he presented to the plaintiffs the agreement of August 9, which they signed, and received from them the note which they held, which he afterwards delivered to Fogg, and gave to the plaintiffs the three notes signed by Tirrell and Company, and indorsed by Fogg, for the thirty-five per cent which they had agreed to accept. The master well may have found that the only reasonable explanation of Kyle’s possession of the notes, and of his conduct, was that he was the agent of Fogg, and of Tirrell and Company, with authority to answer such questions and give such information as creditors naturally would ask or desire in matters relating to the composition.

The defendants also insist that the plaintiffs should have placed Fogg in statu quo, either by return of the composition notes or by an offer in the bill to return them. In 137 Mass. 143, it was decided that this was not necessary as to Tirrell and Company, and it was said that the notes were not the consideration, for the composition agreement, and that they only paid a part of what was justly due to the plaintiffs, and that the payment was to be referred to the original indebtedness, and not to the contract, which had been avoided. Moreover, the notes were the notes of Tirrell and Company, and as against them the plaintiffs clearly had the right to keep them and the proceeds of them. And although when the bill was filed there was about $28,000 due Fogg under the agreement between him and Tirrell and Company for what he had paid and done to carry out the composition, that has since been paid; so that he no longer has any claim to a return of the notes or their proceeds, if he ever had any, and the end to be gained by a restoration of the status quo has been reached in another way.

We think that the testimony of the plaintiffs as to their understanding of the paper which they signed was competent for the purpose of rebutting any inference which might be drawn from their unexplained signatures.

We have treated the report of the single justice as intended to save to the defendants the various objections and exceptions stated in the master’s report, and we think upon the whole case that the plaintiffs are entitled to a return of the note, and a decree for the payment of the balance due after deducting the sums received from the composition notes.

Decree accordingly.