286 Mass. 216 | Mass. | 1934
This is a bill in equity whereby the plaintiff seeks to establish the liability of the defendant Israel Nesson on two promissory notes signed by him as maker — one dated October 17, 1898, in the sum of $80,000, upon which there is now due $52,000 with interest; the other dated June 28, 1917, in the sum of $36,000, the whole of which is now due with interest. The bill also seeks to reach and apply certain property alleged to be owned by the defendant Israel Nesson but to be standing in the name of the other two defendants.
The defendant Israel Nesson claimed a jury trial on the issue of his liability on the two notes, above mentioned, and jury issues were framed, as follows: (1) “What amount, if any, does the defendant Israel Nesson now owe the plaintiff on the note executed by him on October 17, 1898, for $80,000?” (2) “What amount, if any, does the defendant Israel Nesson now owe the plaintiff on the note executed by him on June 28, 1917, for $36,000?”
The case came on to be heard before a jury on the foregoing issues. The plaintiff put in evidence the originals of the two' notes, copies of which are attached to the bill of complaint, and read to the jury the interrogatories to the defendant Israel Nesson, and his answers whereby he admitted the execution and delivery to the plaintiff of both notes. In said answers he also admitted payment of interest on the note of October 17, 1898, up to November 5, 1932, and payment of the principal to the amount of $8,000; and on the note of June 28, 1917, he admitted payment of interest to June 28, 1932, and that he had not paid any portion of the principal. The plaintiff then rested its case.
The defendants’ counsel then, at great length, made an opening statement to the jury which, in substance, was outlined in the amended answer. Following this opening he read to the jury certain interrogatories to an officer of the plaintiff corporation and his answers thereto. No argument is based by the defendant on these interrogatories and answers and no further reference will be made to them. Counsel for the defendants then called the defendant Israel Nesson as a witness and inquired of him as to his transac
The material facts which are to be taken as true, relied on by the defendants in their opening to the jury, shortly stated are as follows:_ In 1898 the defendant Israel Nesson built an apartment house on St. Botolph Street, Boston, Massachusetts. In order to finance it he borrowed $80,000 from the Massachusetts Hospital Life Insurance Company, the plaintiff, and gave to the plaintiff his promissory note in that amount secured by a first mortgage on the said apartment house. The note was dated October 17, 1898, payable in five years from that date “with interest . . . at the rate of four and one-half per cent, per annum until
The defendants further offered to prove that some time after this agreement in 1926 a question arose as to the matter of interest. On two occasions, both mortgage debts being long past due and the mortgages subject to be foreclosed or payment in full enforced at any time, the plaintiff increased the rate of interest on the mortgages above the rate prescribed in the notes without any discussion with the defendants about it. The plaintiff simply sent a notice saying “From this date the rate of interest will be five and a half per cent,” and “from this date your interest will be five and three quarters per cent.” Israel Nesson “at some time asked them if they couldn’t give him a lower rate of interest, but they simply sent him a notice . . . that the interest from then on would be five and three quarters or five and a half per cent.” Mr. Stockton died within a year or two, and was succeeded by an actuary of the company who had no personal knowledge of these transactions. Until recently no demand was made and no mention was made of any claim of this defendant’s liability on the notes. The plaintiff has now “taken possession of the property under the law, and unless the property is redeemed within three years it will become the undisputed owner of this big apartment house and all the mortgaged property.”
In determining the first defence raised by the defendants it is obvious that the issue is, Has the actuary of an insurance company the authority, merely by virtue of his office, to agree to release from personal liability the maker of two mortgage notes payable to the company upon which there is due the sum of $88,000, in consideration of the mortgagor’s agreement to make certain improvements in the mortgaged property and to pay $1,000 on the principal of one of the notes then due?
In the offer of proof it is said, in substance, that the position of the chief executive officer, general manager or president was known as the actuary. It is said of the title general manager, as applied to a corporation, that he may exercise all of the operative functions of the corporation within the field or rules prescribed by the board of directors. It is also said that a manager may be an officer of a corporation whose office signifies general management, such as a president, or one who in fact manages, although holding a subordinate office. "Except for purposes of determining apparent authority, the name of the office held is unimportant; the functions performed with the consent of the principal are determinative.” Authority "to manage a business includes authority: (a) to make contracts which are incidental to such business, are usually made in it, or are reasonably necessary in conducting it.” Am. Law Inst. Restatement: Agency, § 73. “Unless otherwise agreed, authority to receive payment includes authority:
In the instant case there is nothing in the opening to show that Mr. Stockton was given express authority to make the arrangement he did with Israel Nesson. Nor can it be inferred from the fact that Mr. Stockton presumably had authority to collect the notes and discharge the mortgage security that he had authority to make the arrangement he did because such action was necessary to a proper conduct of the business; nor is there any offer to prove that the actuary, in any capacity however named, was accustomed to make such arrangements. Moshannon Land & Lumber Co. v. Sloan, 109 Penn. St. 532, 534. Delta Lumber Co. v. Williams, 73 Mich. 86, 95. On the facts offered to be proved there is no room for inference that such an arrangement had ever before been made, much less that it was a customary thing to do, and nothing to warrant an inference that it was necessary so to do. The notes were overdue, but no entry had been made and there is no offer to prove that the defendant Israel Nesson was financially irresponsible. It is settled that an agent or officer of a corporation has not ordinarily authority to cancel or release a contract of his principal which is in force. Craig Silver Co. v. Smith, 163 Mass. 262, 268. Hosher-Platt Co. v. Miller, 238 Mass. 518, 523. Eastern Advertising Co. v. Standard Nut Co. Inc. 264 Mass. 238, 241. De Blois v. Boylston & Tremont Corp. 281 Mass. 498, 520. We do not think the fact that Stockton acted for the corporation in 1915, when the defendant Israel Nesson repurchased the equity in the mortgaged property, and that he then or later held the position of actuary, and that this defendant had other dealings with the corporation, acting through Mr. Stockton, would warrant a finding that in 1926 Mr. Stockton,
If a contract to pay interest at a higher rate can be inferred from voluntary" payment of interest at that rate (Ellis v. Sullivan, 241 Mass. 60, 64; Barry v. General Mortgage & Loan Corp. 254 Mass. 282, 287, 288), such a contract cannot be enforced in this suit upon notes which. bear interest at a lower rate, without appropriate allegations of agreement for payment of an increased rate of interest. There are no such allegations in the present bill.
It results that the exceptions saved to the action on the notes must be sustained, unless the plaintiff shall remit from the verdict and judgment to be entered on the verdict all interest in excess of four and one half per cent as provided in said notes. If such remittance is made within thirty days from entry of the rescript the exceptions are overruled; if not made, the exceptions are sustained.
Ordered accordingly.