297 Mass. 366 | Mass. | 1937
These are proceedings in equity and at law, wherein The Broadway National Bank of Chelsea (hereafter called the bank) seeks to obtain set-off of a claim of the Francis & Badger Motor Co. (hereafter referred to as the motor company) against a larger claim of the bank against the motor company.
Proceedings at law, connected with the present proceedings, were before this court in Harding v. Broadway National Bank of Chelsea, 294 Mass. 13. In that action the receiver of the motor company sued the bank to recover certain deposits made with the bank by the motor company. The bank set up the defence that it had applied said deposits to an unmatured obligation of the depositor held by the bank, which obligation exceeded the claim of the motor company. This court denied the right of the bank to apply the deposits in that manner, and overruled the bank’s exceptions.
After the filing of the rescript in that case on February 28, 1936, the bank, on March 18, 1936, filed a petition, in
The bank also filed a petition for set-off of counterclaim, and in connection therewith presented certain requests for rulings. This petition was dismissed. The bank excepted to the denial of certain of its requests for rulings, and appealed from the decree dismissing its petition, and from an order of the court denying the bank’s request for a report of the material facts on the ground that the judge had filed such a report.
At the same time the bank filed its petition in the equity proceedings, it also filed a motion in the law action brought against it by the receiver, by which it sought to have the action continued for judgment until further order of the court. In connection with this motion, the bank requested a ruling to the effect that the exercise of sound discretion required the granting of the motion. The motion was heard with the petition in the equity proceedings, the requested ruling was refused and the motion was denied. From the denial of its request for the ruling above stated the bank presents its bill of exceptions.
On March 26, 1936, the judge in the equity proceedings made the following statements and findings, under the heading “Agreements of Parties, Findings, Rulings and Order for a Decree”: “By agreement of the parties there was presented to the court as evidence the following: 1. The record in the case of Robert E. Harding, Receiver of the Francis & Badger Motor Company vs. Broadway National Bank of Chelsea, Suffolk No. 288949. 2. The opinion of the Supreme Judicial Court filed February 29 [28], 1936, in the aforesaid action. 3. The original note with the indorsements thereon, a copy of which in its present form now appears attached to the petition as Exhibit A. 4. The parties agreed that the foregoing, with the exhibits attached
The parties in these proceedings, with the permission of the judge, on May 20, 1936, entered into the following agreement with reference to the preparation of the record for this court: “It is agreed that the evidence referred to in the ‘Agreements of Parties, Findings, Rulings and Order for a Decree’ filed by the trial judge March 26, 1936, constituted all the evidence introduced at the hearing of the ‘Petition of The Broadway National Bank of Chelsea for Set-Off of Counterclaim,’ and that the opinion of the Supreme Judicial Court, filed February 28, 1936, in the action of” Harding v. Broadway National Bank of Chelsea, 294 Mass. 13 “(referred to in the second paragraph of the ‘Agreements of Parties, Findings, Rulings and Order for a Decree’ filed by the trial judge as aforesaid) may be referred to and need not be printed as a part of the record.” It was also agreed in the law action by the receiver against the bank that the record and opinion in the earlier stage of the law action were incorporated in the bill of exceptions now presented by the bank.
Additional facts essential to the determination of the question here presented are as follows: On June 11, 1932, the bank learned of the insolvency of the motor company. At that time the bank held a note of the motor company dated June 8, 1932, payable in one month, in the amount of. $2,400, and the motor company had a deposit balance in the bank of $1,673.64, and later, on June 15, 1932, the bank received and held on the motor company’s account $25.50. On said dates the bank applied these sums on the motor company’s note by crediting said amounts on the
The substantial controversy is whether the bank has the right to an equitable set-off of the obligation owed it by the motor company against the claim of the receiver to recover the indebtedness of the bank to the motor company.
The bank contends that it could not have set off, in the action at law brought by the receiver, its claim against the motor company and have had judgment for the difference, under G. L. (Ter. Ed.) c. 232, §§ 6, 7, because the two demands are not between exactly the same parties, citing Cromwell v. Parsons, 219 Mass. 299, 300.
In the case at bar, the bank, in the action at law, denied the claim asserted against it by the receiver of the motor company; and further answering said “that if it ever owed the . . . [receiver], or Francis & Badger Motor Co., anything in manner and form as in the plaintiff's declaration alleged, the same has been fully paid and it now owes the plaintiff nothing.” It is to be noted in this connection that the bank as defendant in the action at law did not avail itself of its privilege to set up, as a defence to that action, either a declaration in set-off or a counterclaim. And it is to be further noted that the bank never proceeded to establish its claim against the motor company by an independent action at law, or even to assert an equitable defence to the action at law.
Respecting the suggestion of the bank that its claim against the motor company could not be set off in the law action against the claim of the motor company because the parties to those claims were different, it is plain that the bank had the right to effect a set-off of its claim, against the claim of the motor company prosecuted by its receiver
In the case at bar, the bank, relying on the statement in the opinion in Cromwell v. Parsons, 219 Mass. 299, at page 300, contends that it could not take advantage of the statutory right of set-off in the law action brought by the receiver, because of the diversity of parties. An examination of the Cromwell case shows that one Jacobs prosecuted a claim against two persons jointly, and one of those joint obligors prosecuted a claim individually against Jacobs. Jacobs became bankrupt. His trustee in bankruptcy took his place in both actions, and after executions were obtained in both actions a set-off of executions, which was not permissible at law, was permitted in equity. It is apparent from the opinion in that case that the diversity of parties, considered important by the court, was due to the fact that one claim was against joint obligors, whereas the cross claim was not owned by them both, but only by one of them. Here the bank contends that the fact that the law action was brought by the receiver brings the case at bar within the doctrine of the Cromwell case, which would preclude a set-off at law. It is plain that the case at bar should be distinguished from the Cromwell case by the fact that the cross claims were originally between the same parties. The
It follows that the exceptions in the action at law are overruled; and that the decree on the “Petition of The Broadway National Bank of Chelsea for Set-off of Counterclaim” is affirmed with costs.
It is unnecessary to consider other minor matters upon which the parties are at issue.
So ordered.