Glover v. Waltham Laundry Co.

235 Mass. 330 | Mass. | 1920

Rugg, C. J.

This is a suit in equity brought by the widow of Clarence F. Glover against the executor of his will and others in substance seeking to impress with a trust in her favor shares of stock in a corporation known as the Waltham Laundry Company.

This case has been referred to a master, was heard upon the master’s report alone by the single justice, and comes before us on appeal from a final decree entered by him. This court stands with reference to the facts found and the power and duty to draw inferences as did the single justice, unaffected by the conclusion reached by him. Where findings and inferences rest upon the observation of witnesses who have testified orally, the appellate court does not reverse unless plainly wrong; but where the facts all are documentary or are in a master’s report, then this court on appeal has the same functions as a single justice and draws the proper inferences for itself. Rioux v. Cronin, 222 Mass. 131, 134. Harvey-Watts Co. v. Worcester Umbrella Co. 193 Mass. 138. Dominion Trust Co. v. New York Life Ins. Co. [1919] A. C. 254, 257. Bacon v. Abbott, 137 Mass. 397, 399. American Circular Loom Co. v. Wilson, 198 Mass. 182, 200.

The evidence is not reported. Therefore the facts found by the master must stand unless upon the face of his report they are mutually inconsistent or contradictory and plainly wrong. Crane v. Brooks, 189 Mass. 228. Young v. Winkley, 191 Mass. 570, 573.

The master found that in 1897 the deceased, Clarence F. Glover, having had some experience in the laundry business, went to work for one Simes, who was conducting a laundry in Waltham, for a weekly salary and a commission and continued in this employment - until September 22, 1898. The deceased then was without substantial financial resources. He lived in the same house with the plaintiff, at that time unmarried, who had several hundred dollars in the bank. The master found that the deceased was not in fact a partner with Simes and had no interest in the business except as employee. This finding is quite consistent with the other findings and appears to be the rational inference from the general relation of the parties. Although the deceased had some customers.of his own, whom he brought to Simes, worked in part on a commission basis, induced Simes to adopt the trade name of Frank Simes and Company so that he could represent himself as partner to the knowledge of Simes, lent small sums of money to Simes and borrowed from him and drew money in excess of the amount due him, all of which were repaid by each debtor, these facts are not incompatible with the main finding that the deceased was not a partner with Simes.

On September 22, 1898, Simes executed and delivered to the deceased a bill of sale running to the plaintiff of the goods and chattels of his laundry business. The negotiations for this purchase were conducted by the deceased on the plaintiff’s behalf and on the day on which the bill of sale was delivered, or the day after, the plaintiff went to the place where the laundry business was carried on and in the presence of Simes and the deceased declared that she was the owner of the laundry and that she took possession of it. The consideration for the purchase was agreed to be $3,000, to be paid in cash. It was not paid until February, 1899, when eight promissory notes, each for $250, were made by the plaintiff, indorsed by the deceased to the order of, and delivered to, the attorney for Simes. The remaining $1,000 of the •purchase price was paid by the sum of $761.67 in cash withdrawn from the laundry business and by the cancellation of $238.33 of indebtedness from Simes to the deceased. The notes subsequently were paid in whole or in part out of the profits of the laundry. The laundry business was conducted by the deceased, under the name of " Clarence F. Glover doing business as C. F. Glover & Co.” and "Waltham Laundry, C. F. Glover & Co. Props.,” until 1906. The plaintiff and the deceased were married in 1900 and lived together until his death in 1909. Books of account were opened in the name of the deceased. In August, 1899, he bought real estate to which the laundry was moved and upon which the business was conducted thereafter.

There is no incompatibility with other facts found in this finding that the deceased acted for the plaintiff and in her behalf in negotiating for her the purchase of the personal property on September 22. That finding means that the deceased negotiated the purchase of the chattels as agent for the plaintiff, who was the purchaser. The plaintiff at that time was possessed of some property; the deceased was worth substantially nothing. She was responsible for the purchase price. She was the maker of notes aggregating two thirds of that price. Most of the cash paid was withdrawn from the profits of the business. The fact that she was named in the bill of sale as the vendee and took possession of the property in person in the presence of the vendor and of the deceased, and was maker of the notes, are facts of dominating significance in determining who was the purchaser. There is nothing inherently repugnant to the fact that she was in truth the purchaser and the owner of the business in the subsequent conduct of the deceased with reference to the property and business, he being her husband for the larger part of the time. It is not necessary further to review the findings of the master in this particular. See Briggs v. Sanford, 219 Mass. 572, and Hutchins v. Mead, 220 Mass. 348.

The circumstance that a part of the purchase price of the property was furnished by the deceased through the discharge of his debt against Simes does not cut down the effect of the main finding that the title passed to the plaintiff. Patterson v. Patterson, 197 Mass. 112, and cases collected at page 117.

The plaintiff had possession of the bill of sale and introduced it in evidence. The master found that it was delivered to her by the deceased. This finding is not irreconcilable with other facts found. It is in accordance with the presumption of propriety in conduct in the absence of evidence of surreptitious and unlawful appropriation. Collector of Taxes of Boston v. Rising Sun Street Lighting Co. 229 Mass. 494, 497.

The findings that the business after September 22, 1898, and before October 1 following was conducted by the deceased on behalf of the plaintiff and not for Simes and Company, and that from and after September 23 the receipts and disbursements of the business by the deceased were as agent for the plaintiff, are not repugnant to other facts found but seem to follow naturally from the establishment of the main proposition that the plaintiff was the purchaser of the property by the bill of sale of September, 1898.

It must be taken as a fact that the purchase of the property was by the plaintiff and not by the deceased and that the business was at the first started and carried on by the deceased for the plaintiff. Thereafter, up to 1906 the deceased acted as if he were the owner of the business, and conducted it as though it were his own with the knowledge and acquiescence of the plaintiff, who was familiar in a general way with the books and the way in which he carried on the business. The finding of the master is that there was no actual gift or transfer to the deceased of the plaintiff’s right and title to the property and business, and that she claimed from time to time that the business belonged to her. The facts do not show that the plaintiff relinquished her title to the property or the business, or conveyed it in any way to the deceased. Ownership by the plaintiff being once established, the natural inference is that, in the absence of facts showing the contrary, the ownership continued the same. In view of that fact, the acts of the deceased in respect of management and control of the property of his wife presumably were as agent for her and in her interest and behalf. Chace v. Chapin, 130 Mass. 128. There is no finding of a gift by the plaintiff to the deceased of the property or business. The facts found do not seem to us to require or support that inference. Indeed, the finding is to the contrary.

In 1906 the Waltham Laundry Company was incorporated under the laws of Massachusetts with a capital of $20,000 divided into two hundred shares. The. deceased brought about the organization and at his invitation the plaintiff, his brother, Seymour Glover, and one Grover acted with him as incorporators, participated in their meeting, and in the election of its officers and in the passage of a vote to purchase “the machinery, merchandise, bills receivable and good will of the laundry and cleansing business heretofore carried on by Clarence F. Glover,” and to assume all its contracts, debts and obligations. The deceased executed a bill of sale of the laundry property and business in his own name to the corporation, the terms of which were stated in the plaintiff’s presence and hearing. The plaintiff was fully aware of this transfer by the deceased to the corporation and acquiesced therein and made no claim of ownership. She was a director from the organization until the death of the deceased, and knew that one hundred and ninety-eight shares of stock were held by the deceased and one each by Seymour Glover and herself. After the organization of the corporation until the death of her husband he continued to manage the business in substantially the same maimer as before. No dividends were declared but profits were paid to the deceased and charged to him on the books of the corporation to an amount exceeding $27,000. During the entire period the plaintiff received from the deceased sums of money to the amount at least of several thousand dollars, the exact amount not being found. The plaintiff also loaned money to the deceased from time to time.

The facts show that the property purchased by the plaintiff in 1898 and used in her business and increased and enlarged in amount by the management in her behalf up to 1906, is now represented by shares of stock in the corporation. The identity of the stock as representing that which previously was her property is established. Peoples National Bank v. Mulholland, 228 Mass. 152, 158, and cases there collected. Lowe v. Jones, 192 Mass. 94, 101. Newell v. Hadley, 206 Mass. 335, 356. The circumstance that some property owned by the deceased in an outside adventure was included in the conveyance to the corporation is of no consequence in this, connection, because that, business had been a failure and property from this source appears to have been negligible in value. See Davis v. Downer, 210 Mass. 573, 575.

The plaintiff -is not estopped from setting up her claim to the stock. The executor of the deceased stands in nó better position than the husband himself would, if living, and as against him she might assert her rights in equity. Manifestly he being the person to whom property was entrusted, could not rightly contend that the plaintiff as owner was thereby foreclosed from asserting her title.

There is no fact which seems to us to justify an inference that the plaintiff’s conduct misled the deceased to his harm in any particular. Plumer v. Lord, 9 Allen, 455. Boston & Albany Railroad v. Reardon, 226 Mass. 286, 291. Facts constituting an estoppel between the original parties are absent. The fundamental fact is that the plaintiff was the original purchaser of the property and that the business in its initial stages was conducted by the deceased in her behalf. This was all with the knowledge of the deceased because he acted as her agent. This knowledge must be held to have stayed with the deceased and to have colored all his transactions respecting the property and business. Thus, as between the plaintiff and the deceased, there has never been any basis for estoppel. Their acts all are affected by their knowledge of facts essentially at variance with the underlying conception of estoppel.

The general trend of authority is that where a wife vests her husband with the title and possession of property and permits him to hold himself out to the world as owner and others give him credit on the strength of this appearance, she is estopped to deny as against such creditors to the extent of their debts that he was the owner. Rioux v. Cronin, 222 Mass. 131, 135, note, and cases there collected. Doubtless the same rule applies to like conduct of others. Savage v. Darling, 151 Mass. 5. Russell v. American Bell Telephone Co. 180 Mass. 467. That principle is not germane to the issues here presented. No creditor is a party to these proceedings. The only finding is that “In at least one instance credit was extended to said Glover in reliance upon representations by him that the business belonged to him and that the person extending such credit was and is a creditor of the estate of” the deceased. That finding falls short of anything approaching an estoppel to the plaintiff from asserting her title.

The plaintiff is not barred by loches. No facts are found to the effect that during the life of the deceased he failed to recognize as between himself and the plaintiff her rights to the property in such way as justly to satisfy her by payments of money directly to her or expended in her behalf. There does not appear to have been under all the circumstances unreasonable delay operating to the prejudice of the deceased. Haven v. Haven, 181 Mass. 573, 579. Delay is chiefly of consequence when good faith requires vigilance in asserting one’s rights.

Manifestly the facts do not show that the plaintiff’s rights have been barred by the statute of limitations. Davis v. Coburn, 128 Mass. 377.

The taking of the shares of stock in the corporation in the name of the deceased in return for her property conveyed to it presents the usual case of resulting trust. The plaintiff furnished the consideration, the title being taken in the name of the deceased. Lufkin v. Jakeman, 188 Mass. 528. Howe v. Howe, 199 Mass. 598. Cooley v. Cooley, 172 Mass. 476.

The defendant Seymour Glover stands in this connection on the same footing as the deceased. He paid nothing for his share of stock but the entire subscription price therefor was paid by the property of the plaintiff. A trust therefor results in her favor.

The Waltham Laundry Company obtained a clear title to all the property conveyed to it. The plaintiff plainly is estopped to set up any claim against it.

Assuming in favor of the defendants, but without so deciding, that consideration of the demurrer is open on the record, it is sufficient to say that it was overruled rightly. Fourth National Bank of Boston v. Mead, 214 Mass. 549, is plainly distinguishable.

The result is that the decree dismissing the bill is reversed and a new decree is to be entered establishing the title of the plaintiff by way of resulting trust to the one hundred and ninety-eight shares of stock in the corporation which stood in the name of the deceased and to the one share standing in the name of Seymour Glover, declaring that these shares are held in trust for her, and directing these shares transferred to her, and ordering an accounting for dividends received thereon, and for her costs.

So ordered.