Costelo v. Crowell

134 Mass. 280 | Mass. | 1883

Field, J.

The court are unanimously of opinion that the amendment substituting John F. Costelo as nominal plaintiff for Amelia H. Costelo was properly allowed. Gen. Sts. c. 129, §§ 41, 82. Winch v. Hosmer, 122 Mass. 438. Buckland v. Green, 133 Mass. 421.

Without deciding, it may be assumed, as the defendant contends, that the agreement between Thomas Corey and John F. ■ Costelo, dated July 31, 1868, created a trust in the land which John F. Costelo could enforce in equity, and that whether the relations of the parties were such as to constitute them co-partners or not, John F. Costelo was entitled to an account in equity of the amount due him under this agreement after the land had been sold, and that, as, until the land was sold and this account taken, it could not certainly be known how much, if anything, of the proceeds of the enterprise would be due to him, an action at law for his share of these proceeds could not, under the facts in evidence, be maintained.

It may also be assumed that, although the. instrument declared on is in form a promissory note, yet, as it was given as collateral security for the fulfilment of the agreement, and a memorandum to that effect appears upon its face, no action at law can be maintained upon it unless such an action could be maintained upon the agreement itself if the contents of this note had been inserted in the agreement. Costelo v. Crowell, 127 Mass. 293. If the agreement has been fully performed, no action can be maintained on the note, but it should be surrendered to the defendant; if the. agreement has not been fully performed, yet, if the damages to be recovered on the note can only be ascertained after the land has been sold and an account taken, no action at law can be maintained on the note until these things have been done. The note is called collateral security for the fulfilment of the agreement, but it is simply a promise by Corey additional to his covenants in the agreement, and collateral to them. If it were the note of another person, there would be no doubt of the right of the plaintiff to collect it, and to hold the proceeds as security for the performance of the agreement. But if a debtor gives a creditor two or more separate obligations of his own to pay the same debt, the creditor does not acquire the right of collecting of the debtor on any or all of these obligations more than what is really due to him. Ex parte Farnsworth, 1 Lowell, 497. Third National Bank v. Eastern Railroad, 122 Mass. 240.

The case of Royal Bank of Liverpool v. Grand Junction Railroad, 100 Mass. 444, if it be regarded as correctly decided, is only apparently an exception. That case rests upon the ground that the obligations were under seal, and goes only to the extent of deciding that the plaintiff might take judgment for the amount of bonds held as collateral, as well as of the bonds owned by the plaintiff, and not that the plaintiff might collect and retain the full amount of the-judgment.

In the case at bar, the two instruments were executed by Corey at the same time and as a part of the same transaction, and each refers to the other, and, for the purpose of determining the intention of the parties as expressed in the two instruments. they are to be construed in reference to each other. If it appears from such a construction that it was the intention of the parties that Corey should pay to Costelo $3000, with interest in five years from date, absolutely, even if the land had not then been sold, or if sold, even if Costelo’s share of the proceeds did not amount to this sum, and that Costelo should receive this sum to his own use absolutely, without any liability on his part to contribute therefrom, under any circumstances, toward the payment of any losses, there is no reason why an action at law on the promise contained in the note should not be maintained.

The cases which most nearly resemble this, and which illustrate the most favorable view for the defendant which can be taken, are cases in which one partner has maintained an action at law against his copartner on a promise to pay money contained in the agreement of copartnership, and relating to the partnership business, without taking an account between the partners of the affairs of the partnership. The principles which govern such cases were considered in Ryder v. Wilcox, 103 Mass. 24, 29. In the opinion the court say: “It is said that an action at law for damages for the breach of an express agreement, entered into by one partner in favor of another, will only lie where the action can be properly tried without going into the partnership accounts, and the damages sought will belong exclusively to the plaintiff, and where the plaintiff will not be liable in any contingency, affecting the future joint business, to contribute to his own payment. Lindley on Part. 731, 740. But, without stopping to inquire whether this action can be maintained without violating these rules, it is sufficient to say that, whatever the nature of the agreement, it must be une in which the defendant binds himself personally to the plaintiff.”

In Williams v. Henshaw, 11 Pick. 79, 84, which was assumpsit between copartners, the • court say: “ If the plaintiffs had shown an agreement on the part of the defendants to advance one half M the money necessary to carry on their joint speculation, or a promise to repay the plaintiffs for their advances, they might well recover upon such undertaking in the present action.” See also Remington v. Allen, 109 Mass. 47; Capen v. Barrows, 1 Gray, 376; Brown v. Tapscott, 6 M. & W. 119; Paine v. Thacher, 25 Wend. 450; Whitehill v. Shickle, 43 Mo. 537; Collamer v. Foster, 26 Vt. 754; Wills v. Simmonds, 8 Hun, 189; Lomas v. Bradshaw, 9 C. B. 620; Venning v. Leckie, 13 East, 7; Gilpin v. Enderby, 5 B. & Ald. 954.

It appears by the agreement that Costelo advanced to Corey $3000, which was used by him in the purchase of the land, and that Corey gave the grantor his note for $9000, with interest at six per cent, secured by a mortgage on the land, as the remainder of the consideration of the purchase; that Corey agreed to save Costelo harmless from all losses which might occur “ in the decrease or sale of said buildings or lands; ” that he also agreed “to pay the $3000 advanced by the said Costelo towards the purchase and first payment of said buildings and lands; ” and agreed to pay $3000 on the mortgage in one year, and “the balance of said mortgage, six thousand dollars,” with interest, in five years; that Corey was to have full control of the buildings and lands, was to pay the interest on the mortgage, all taxes and assessments and the insurance, out of the rents and crops; that the lands and buildings were to be sold for the joint benefit of the two parties, and the proceeds to be divided equally after paying off the mortgage; and that Corey has given to Costelo his note for $3000, with interest at six per cent, “ as collateral security for the said three thousand dollars paid by the said Costelo to the said Corey, and for the fulfilment of this agreement.” This agreement plainly contemplates that the mortgage would not be fully paid until five years from date, and that the lands might not be sold and the interest of each party in the proceeds determined until after five years. As Corey held the legal title to the lands, and by the agreement had full control over them, it was in his power to sell them or to defer selling them, as he pleased, except as he might be controlled by a court of equity. If he sold them before the expiration of the five years and paid over to Costelo his share of the proceeds, and this share amounted to at least $3000 and interest, Corey would be entitled to a surrender of the note, because he had paid it and wholly performed his agreement. If at the expiration of five years this had not been done, we think it was the intention of the parties that Corey should pay to Costelo absolutely the $3000 and interest, and that Corey personally assumed this obligation without regard to the ultimate result of the enterprise ; and that, if Costelo received this sum, he was not bound to contribute towards any losses, if any such were found to have been sustained on the final adjustment of accounts. If this is the obligation which Corey assumed, an action at law on his promise in writing to that effect is the appropriate remedy for enforcing it.

For these reasons, a majority of the court are of the opinion that the Exceptions must be sustained.