Hopedale Manufacturing Co. v. Clinton Cotton Mills

224 Mass. 193 | Mass. | 1916

Braley, J.

The plaintiff, instead of commencing suit by bill with a writ of subpoena according to the usual course of proceedings in equity, inserted the bill in an original writ of summons and attachment by trustee process as permitted by R. L. c. 159, § 8. While the trustees, the individual defendants, are described as within this jurisdiction, the defendant, the Clinton Cotton Mills, a foreign corporation, is described as having its usual place of business without this Commonwealth, and, no personal service having been made, the court is without jurisdiction unless the individual defendants who have been duly summoned and are subject to our process had in their possession or control at the date of service, goods, effects or credits of the mills which can be reached and applied under R. L. c. 159, § 3, cl. 7, in satisfaction of the demands alleged in the bill. Koontz v. Baltimore & Ohio Railroad, 220 Mass. 285, 287, and cases cited. Travelers Ins. Co. v. Maguire, 218 Mass. 360, 362. It is the plaintiff’s contention that upon the record they are chargeable, .and that consequently upon establishment of its claim a valid judgment can be entered against the property held by garnishment after notice to the mills in accordance with R. L. c. 170, §§ 1, 6, which has been given. Lowrie v. Castle, 198 Mass. 82. Snyder v. Smith, 185 Mass. 58, 62. This question must be decided on the stipulation and the evidence recited in the record, which, having been introduced by agreement of parties, is to be taken as true.

The individual defendants are resident agents engaged to sell the products of the Clinton Cotton Mills upon commission under a contract terminable on six months notice by either party to the other party, which among other terms provides, that the agents should make general cash advances to the mills from time to time for an aggregate maximum amount, and also should advance to the full market value against unsold merchandise consigned to them for a further stipulated amount. To cover the advances, the mills engaged to give its interest bearing promissorynotes on six months’ time, indorsed by certain parties named in the contract, which were to be used by the agents in their own loans. To secure the notes, advances, balances and commissions the mills gave a lien to the agents “on all its manufactured cloth products” whether in its possession or in transit or in possession of the agents, and on all “receivables,” representing the proceeds of sales of cloth products, with authority upon default under any of the terms of the contract forthwith to sell for their own account in satisfaction of this lien at full market price and in such manner as they may determine any of such merchandise, and to sue for and collect for their own account any and all outstanding “receivables” for such merchandise, and to apply the proceeds of sale or collection toward the settlement of all outstanding obligations between the parties.

It is apparent that, because of advances under the contract, and of outstanding contracts entered into with their customers for delivery of the products of the mills to be manufactured in the future, there were no credits due from the agents to the mills either in money or merchandise at the date of service.

If, however, the agents could not be charged either in trustee process under It. L. c. 189, Koontz v. Baltimore & Ohio Railroad, 220 Mass. 285, 288, or under R. L. c. 159, § 3, cl. 7, as having “any property, right, title or interest, legal or equitable” of the mills in their possession or control, the plaintiff, relying on Lord v. Harte, 118 Mass. 271, presses the argument that, the contract not having been terminated, moneys which might become due and payable in the future upon an accounting can be reached and applied. But while the statute uses the words “ any property, right, title or interest, legal or equitable, of a debtor” the “property, right, title or interest” must be in existence when the proceedings to reach and apply are instituted. Silloway v. Columbia Ins. Co. 8 Gray, 199, 203. Geer v. Horton, 159 Mass. 259, 261. Snyder v. Smith, 185 Mass. 58. Hoshor-Platt Co. v. Miller, 190 Mass. 285. The obligations between the agents and their principal are not only mutual but purely executory, and a court of equity will not compel performance of an executory contract for the benefit of a creditor of one of the parties. As said by Mr. Justice Field in Pettibone v. Toledo, Cincinnati, & St. Louis Railroad, 148 Mass. 411, 419, when speaking for the court, of property which may be reached and applied by a bill in equity before judgment, “No case . . . appears in our reports where under this process a plaintiff has been permitted to compel a debtor to execute on his part an executory contract made with other persons, or has been permitted to execute it for him in order that the plaintiff may compel these other persons to perform their part of the contract for the benefit of the plaintiff; neither has any claim for unliquidated damages for the breach of an executory contract been reached and applied under this procedure.” This rule has been recognized and followed in Wheelock v. Globe Construction Co. 195 Mass. 456. Eastern Electric Cable Co. v. Great Western Manuf. Co. 164 Mass. 274, 276, Geer v. Horton, 159 Mass. 259, 261. The royalties payable to the debtor under the contract with the publishers in Lord v. Harte, 118 Mass. 271, depended solely upon the sale of his works, and royalties due or to become due resulted in a debt for definite sums of money which the debtor could be decreed to assign or transfer to the creditor. Silloway v. Columbia Ins. Co. 8 Gray, 199. But in the present case independently of the fact that the mills have not appeared generally and an assignment could not be ordered, it cannot be found that any moneys or merchandise will be due eventually from the agents to their principal when the contract has been terminated which they can be compelled to retain for the plaintiff’s benefit.

It will be seen from what has been said that the bill cannot be maintained, and, whether the allegations are sufficient to show an enforceable debt, or whether the demurrer and plea of the individual defendants were overruled rightly need not be decided.

The interlocutory decree denying the motion of the mills to dismiss must be reversed, and a decree is to be entered granting the motion and dismissing the bill with costs. Bennett v. Sweet, 171 Mass. 600. Hey v. Prime, 197 Mass. 474. Koontz v. Baltimore & Ohio Railroad, 220 Mass. 285.

Ordered accordingly.