308 Mass. 220 | Mass. | 1941
The plaintiff, on December 2, 1937, brought this bill in equity against the defendant for an accounting. The defendant’s answer, filed January 24, 1938, admitted that he and the plaintiff entered into a contract as evidenced by the letters referred to in the bill, and, in addition to denying that anything was due from him thereon, also filed a counterclaim, allegedly based upon a joint adventure that was apart from the subject matter of the alleged contract. On January 7, 1938, the defendant filed in the District Court of the United States for the District of
The case was tried by a judge of the Superior Court who filed a statement of his findings, rulings and order for decree. Apparently these findings were made voluntarily and not under G. L. (Ter. Ed.) c. 214, § 23. It was agreed before him that the claim of the plaintiff was barred by the proceedings in the bankruptcy court, "and the case went forward on the defendant’s counterclaim as amended.” The judge stated: "Without reporting in detail the evidence offered on the question of joint enterprise, which is to be reported, I am satisfied that the defendant failed to establish his claim and if I am free to do so, I find that there was no joint enterprise and consequently no liability upon the part of the . . . [plaintiff].” From the statement
There was an order that the stenographer report the testimony, Rule 76 of the Superior Court (1932), but the plaintiff, in writing, waived the printing of the evidence on its appeal. See Wyness v. Crowley, 292 Mass. 459; Hubbard v. Southbridge National Bank, 297 Mass. 17, 19. In the circumstances, entry of the decree imports a finding of every fact essential to sustain it and within the scope of the pleadings. Birnbaum v. Pamoukis, 301 Mass. 559, 561, 562, and cases cited. Council v. Cohen, 303 Mass. 348, 351. See Topor v. Topor, 287 Mass. 473, 476. The
The plaintiff contends that the issue in the bankruptcy court was not only whether a joint enterprise existed, but if it did, what was its extent; stated a little differently, that it was the duty of the referee to find the amount of the defendant’s debt to the plaintiff and then to consider whether there was a joint enterprise, and if it appeared that there was, then to determine just what, if anything, the plaintiff owed the defendant; in- other words, that it was the duty of the referee to state the accounts fully and finally. The plaintiff, however, concedes that the referee’s decision disposed of its claim. It is not contended that it was not within the power of the referee to determine the status of the plaintiff’s claim. See §§38 and 39 of the bankruptcy act, U. S. C. [1934 ed.] Title 11, §§ 66 and 67; Durrance v. Collier, 81 Fed. (2d) 4; In re Adamson, 83 Fed. (2d) 211, certiorari denied sub nomine Adamson v. Adamson, 299 U. S. 554; In re Gunder, 88 Fed. (2d) 284, certiorari denied sub nomine 164 East 72nd Street Corp. v. Gunder, 301 U. S. 701; Corden Corp. v. Williams, 93 Fed. (2d) 758, certiorari denied sub nomine Williams v. Corden Corp. 303 U. S. 659. It is not contended that the subject matter of the defendant’s claim was not proper as the basis for set-off or counterclaim against the plaintiff’s claim. See § 68 of the bankruptcy act, U. S. C. (1934 ed.) Title 11, § 108; Rule 32 of the Superior Court (1932); In re Harper, 175 Fed. 412; In re American Paper Co. 243 Fed. 753; Cumberland Glass Manuf. Co. v. De Witt & Co. 237 U. S. 447. It is unnecessary to consider in detail the provisions of said § 74 of the bankruptcy act. In general, it provided that a debtor, allegedly insolvent or unable to meet his debts as they matured, might petition for a composition or an extension of time within which to pay his bills. If a composition was confirmed, the consideration was distributable as the court directed, and the case was dis
In the case at bar, no petition was filed for review of the order of the referee disallowing the plaintiff’s claim, and although it is not specifically found as a fact by the judge that the proposal for composition was confirmed, we think it follows from what was said by him in his. statement that it was. At the time of the hearing by the referee on the plaintiff’s claim, there was no occasion to disturb the defendant in the possession of his assets, or to take over the collection of any claims that he might have against others in his capacity as a creditor. In short, the time never arrived when it was necessary to adjudge the defendant a bankrupt or to appoint a trustee to liquidate the estate.
But the plaintiff contends that the case at bar is governed by the principle of law stated in O’Connor v. Varney, 10 Gray, 231, whereby a judgment for a defendant in an action for work done under a contract upon the ground of imperfect performance is a bar to a subsequent action by him to recover damages for such nonperformance.. The reason for this, as given by Shaw, C.J., is that a party against whom an action is brought “on a contract has two modes of defending himself. He may allege specific breaches of the contract declared upon, and rely on them in defence. But if he intends to claim, by way of damages for nonperformance of the contract, more than the amount for which he is sued, he must not rely on the contract in defence, but must bring a cross action, and apply to the court to have the cases continued so that the executions may be set off. He cannot use the same defence, first as a shield, and then as a sword.” Merriam v. Woodcock, 104 Mass. 326, and cases cited. The rule stated in the O’Connor case is generally accepted. See 83 Am. L. R. 642. But it
The parties to the proceeding to determine whether the plaintiff had a claim that would entitle it to payment in accordance with the compromise offer were, in effect, the plaintiff and the defendant. The jurisdiction and duties of .a referee in bankruptcy (bankruptcy act, §§38 and 39) have already been referred to. There are decisions of the Federal courts to the effect that there cannot be any judgment in bankruptcy proceedings against the claimant where the estate’s offset exceeds the creditor’s claim, and that the trustee must seek his remedy by plenary action. In re Bowers, 33 Fed. Sup. 965, 967, and cases cited. Fitch v. Richardson, 147 Fed. 197. In re T. M. Lesher & Son, 176 Fed. 650. In re Continental Producing Co. 261 Fed. 627. In re Patterson-MacDonald Shipbuilding Co. 284 Fed. 281, 283 and cases cited, S. C. 293 Fed. 192. Compare Florance v. Kresge, 93 Fed. (2d) 784, 786. See Alexander v. Hillman, 296 U. S. 222. Whatever may be the true rule where there have been an adjudication of bankruptcy and an appointment of a trustee, we are of opinion that, in the case at bar, not only was the referee not required to determine the amount of the defendant’s counterclaim, but also the defendant was not entitled to have that amount determined in the sense that such a determination would fix the rights of the parties with respect to that amount. All that the referee was required to do, as has been said already, was to determine whether the plaintiff had any claim.
The plaintiff contends that it was error for the judge to admit the testimony of the referee to the effect, in substance, that the latter formed an opinion and that, if he had been required to find as a fact, he would have found that there was a “partnership or joint adventure,” and that if he had been required to make “findings of fact,” which he did not make, it was perfectly clear in his mind that the loss of the building operations (that were the subject matter of the joint enterprise) “built up a counterclaim against the . . . [plaintiff] vastly in excess of their claim against . . . [the defendant], and as a result of that . . . [he] disallowed the claim in full, and no petition for review was ever taken.” The judge inferred from this reference to the requirement of making findings of fact that the referee had in mind, “not the mental process of fact finding but the reduction of it to writing in a document to be filed of record in the case, like the statutory finding of material facts in equity proceedings.” The plaintiff concedes that “While that testimony may have qualified as evidence of what the issues were ... it was too indefinite and left too much to surmise and conjecture to qualify as evidence of what was there determined.” We are of opinion that the plaintiff cannot be heard to complain. It could be shown by extrinsic evidence what issues were heard and determined by the referee. Cote v. New England Navigation Co. 213 Mass. 177, 181. Furthermore, it does not appear that the judge was asked to limit the evidence which the plaintiff concedes was admissible. See Indrisano’s Case, 307 Mass, 520, 523,
There are obvious errors of arithmetic, not only in the order for the decree, but also in the final decree, none of which has been called to our attention in argument. Very
The result is that, subject to the interest being recomputed, the final decree is affirmed.
Ordered accordingly.