McPherson v. Kenney , 198 Mass. 350 ( 1908 )

Hammond, J.

On June 6, 1900, the firm, then consisting of the plaintiff and one Doherty, was largely indebted to the defendant as an individual and also to concerns in which he was interested; and the auditor has found that on that day the defendant placed all these various claims in the hands of his counsel, with directions to collect them. The auditor further finds as follows:

“ Two suits were brought against the firm of Doherty and McPherson, their property attached and a keeper put in the hotel; and a suit against McPherson individually and his property attached; and a bill in equity to reach real estate of McPherson alleged to be standing in the name of another party.

“ These suits were settled upon the following terms: McPherson was to pay back the $1300, was to agree to have nothing to do with the active management of the hotel, have nothing to do with the cash or funds. That a manager should be appointed to conduct the business and that McPherson should give bond with surety that he would not contract any indebtedness with any person or firm except with the defendant Kenney or the companies with which said Kenney was connected. . . .

“ These terms the plaintiff agreed to under the advice of counsel, and on June 15, 1900, executed the bond in evidence.”

The condition of the bond was as follows: “ The condition of the obligation is such that if the said McPherson shall not, after the date hereof and until May 1,1901, contract any indebtedness on behalf of said firm to any person, firm or corporation, except to James W. Kenney, Union Brewing Company and Bay State Wine and Spirit Company, then this obligation shall be void, otherwise it shall be and remain in full force and virtue. It is agreed that in case of a breach of the condition of this bond, the total amount of indebtedness contracted in violation hereof by said McPherson shall be considered as liquidated damages and payable as such and not as a penalty. This bond shall be construed as applying only to indebtedness contracted by McPherson personally, and not to indebtedness contracted by any other member of the firm, or its employees. In case of the receipt of money under this bond, it shall be applied to the reduction of the firm’s indebtedness to said Kenny, Union Brewing Company, Bay State Wine and Spirit Company or to other indebtedness of the firm.”

It thus appears that the plaintiff had voluntarily released substantially all control of the business. It does not appear that he made any objection to the manner in which it was afterwards carried on, or to the fact that Doherty was simply obeying the directions of the defendant. For all that appears in the record, the defendant was proceeding in good faith to carry out the agreement and to enable the firm to pay its debts. He was interested to have this done, and it does not appear that he thought or had any reason to think he was doing anything to which the plaintiff objected. There does not appear to be any evidence of malicious interference with the plaintiff’s business.

Judgment on the verdict.