Harvey v. Squire, 217 Mass. 411

Harvey v. Squire

217 Mass. 411 | Mass. | 1914

Braley, J.

The plaintiff is the payee and the holder, while the defendants are the joint and several makers of the promissory notes in suit. It is not contended that the notes were not given for a valuable consideration, and, none of the defenses raised by the original answer having been relied on at the trial, the production of the notes, and proof of the defendants’ signatures, would have entitled the plaintiff to a verdict. Burnham v. Allen, 1 Gray, 496. Ballou v. Wells, 12 Allen, 485. Perley v. Perley, 144 Mass. 104. R. L. c. 73, §§ 41, 77. But by the amended answer the defendants averred, that they were induced by the false and fraudulent representations and fraudulent concealments of the plaintiff upon which they relied, to execute the notes.

*414It appears, that the plaintiff as manager had been in the employ of a corporation, of which the defendant Fred F. Squire was treasurer and the defendant Ida I. Squire, his wife, owned nearly all the capital stock, and the deceit and fraud is stated to have been, that in violation of his contract, and without the knowledge of the officers of the corporation, the plaintiff entered into business relations with a rival company, to which from time to time he diverted a large part of the corporation’s trade, causing serious financial loss to his employer, and that there was not justly due to him from the corporation, because of services on his part, a sum equal to the amount of the notes, or any sum whatever. The burden of proving these averments rested on the defendants. Sayles v. Quinn, 196 Mass. 492, 495.

It is conceded, that Ida I. Squire signed the notes on presentation by her husband, to whom reference hereafter will be made as the defendant, and she was not present at the interview between him and the plaintiff when the settlement of the indebtedness was made; neither is she shown to have known of what then took place, nor did she attend the trial. The relation of husband and wife is relied upon as sufficient to establish agency. It is urged that any misrepresentations made to the defendant were made to his principal, and Arnold v. Spurr, 130 Mass. 347, and Reid v. Miller, 205 Mass. 80, are cited. In the first case the husband had been entrusted with the management of his wife’s farm, and in the second case the wife with knowledge that her husband was erecting a house on her land made no objection. The defendant in the present case, although a witness and exhaustively examined, gave no evidence that with his wife’s knowledge and assent he acted generally in the management of her business affairs, from which the jury might have inferred that he represented her in the settlement, or that he had been instructed to act in her behalf. Kelley v. Lindsey, 7 Gray, 287. Gould v. Norfolk Lead Co. 9 Cush. 338. By the provisions of the statute she could contract as if sole,-and by her signature she is presumed to have become a party to the notes. for value. R. L. c. 153, § 2; c. 73, § 41. The bare marital relation and nothing more was insufficient to warrant the inference of agency, and the plaintiff’s first three requests should have been given. Barker v. Mackay, 175 Mass. 485, 488.

*415But, if it were assumed, that with the knowledge of the plaintiff the defendant represented his wife as well as acted for himself, yet there was a mistrial. The substantial facts are undisputed. The defendant had given to the plaintiff from time to time in payment of arrears of salary due from the corporation his promissory notes. Partial payments were made and then a new note, including the balance remaining due on the previous note and salary subsequently accruing, would be given, and on March 1, 1911, the defendant, after an accounting, gave his note for $2,000. The plaintiff at this time had not been unfaithful to his employer’s interests. The following November another accounting was had, when the defendant himself computed and itemized the amount due, which included $1,800 with interest remaining unpaid on the note of March 1 and $51 for seventeen weeks, at $3 a week, covering current expenses treated as salary, and four notes were then given for the aggregate sum of $1,922.96, of which the first two have been paid, leaving the notes in question amounting to $1,500 outstanding.

No want of consideration appears, nor has partial failure of consideration been pleaded. See Robinson v. Green, 3 Met. 159, 161; Rand v. Mather, 11 Cush. 1, 7. The defendant, even if the note given in March is not shown to have become due, instead of making payment took up that note, which he has since retained without any tender back, and gave the notes of himself and wife in renewal.

The false representation of the plaintiff made to the defendant some time in June, 1911, and before signing the notes, that he was not interested in the competing company, was considered by the presiding judge as sufficient to support the defendant’s averments of fraud and of the right of rescission. But to enable a party to rescind the fraud or misrepresentation relied on must have in fact induced him to make the contract and must be a part of the same transaction. Hedden v. Griffin, 136 Mass. 229, 231. Dawe v. Morris, 149 Mass. 188. See Reeve v. Dennett, 145 Mass. 23, 29; Nash v. Minnesota Title Ins. & Trust Co. 163 Mass. 574. The plaintiff’s contract with the corporation as described in the amended answer is distinct and separate from the contract of the defendants. To them individually he owed no duty of service, nor did he solicit either defendant to become his debtor, or make *416any statement as to the sum due. The violation of his contract of employment was a wrong against the corporation, and except through the corporation it had no relation to the defendants. Converse v. United Shoe Machinery Co. 185 Mass. 422; S. C. 209 Mass. 539. It is plain the jury would not have been warranted in finding that the plaintiff’s misrepresentation of fact, when made, was made to induce the defendant to sign the notes in suit, and his mere silence at the date of renewal under these circumstances, where no preconceived intent to mislead the defendants individually for the purpose of obtaining the notes appears, is not the equivalent of actionable deceit. Berkshire Mutual Fire Ins. Co. v. Sturgis, 13 Gray, 177. Bradley v. Fuller, 118 Mass. 239. Hedden v. Griffin, 136 Mass. 229, 231. Dawe v. Morris, 149 Mass. 188, 192. Batty v. Greene, 206 Mass. 561, 564. Stewart v. Wyoming Cattle Ranche Co. 128 U. S. 383. The defendant testified that he would not have signed if he had known of the plaintiff’s misconduct, but this evidence would not have warranted the jury in finding that he acted in reliance upon the misrepresentation. Stewart v. Joyce, 201 Mass. 301, 309, 310.

It is further contended that from the general course of dealing, shown by the giving of the treasurer’s notes in payment of salary, the jury could find that the defendants had succeedéd to the rights of the company, and the judge so charged. The corporation, however, on the record has not assigned its claim to the defendants, nor is there evidence from which an original employment of the plaintiff by the defendant or novation could be found. R. L. c. 173, § 4. Kurinsky v. Lynch, 201 Mass. 28, 32. Griffin v. Cunningham, 183 Mass. 505. The acceptance of the personal notes of the defendants and nothing more did not release the corporation or transfer its right to damages for breach of the plaintiff’s contract. Griffin v. Cunningham, 183 Mass. 505.

We are therefore of opinion that no defense had been made out, and the plaintiff’s fourth request should have been given.

The remaining exceptions to the admission of evidence and to the instructions need not be discussed, as they have been substantially disposed of or rendered immaterial by what has been said.

Exceptions sustained.