Perry v. Pye

Braley, J. The original bill and the bill as amended are framed with a double aspect. If the plaintiff’s debt is established he asks in the second paragraph that an equitable set-off be made of any judgment which the defendant Pye may recover against him in a pending action at law; while in the third, fourth and fifth paragraphs he seeks to reach and apply in payment the amount of a judgment recovered by this defendant against the steamship company. The defendant Daggett did not become a party until the master to whom the case was referred had prepared his draft report, and the plaintiff thereupon had amended the bill by joining as defendants all parties interested in an assignment of the claim against the company, given by Pye to the defendant Young. It is true as to the defendant Daggett that by the allegations he is connected only with the claim set forth in the third paragraph. But his demurrer is not on the ground that the bill is multifarious. If he did not care to raise this question, he cannot avail himself of possible objections to the misjoinder of causes and the prayers for relief which do not concern him, but affect only the defendant Pye, who has answered generally. Davis v. Peabody, 170 Mass. 397. The demurrer was rightly overruled. The master’s report having come in, it was disclosed that the defendant Daggett held an assignment from Pye of-the claim against the plaintiff described in the second paragraph, and that he also was interested and protected as a creditor of Pye under the assignment to the defendant Young. It further appears that before he became a party he had appeared before the master, both as coun — 410 — sel and as an important witness in support of his alleged rights, where the case was fully tried upon the merits, and that he has no interest in the litigation except as an assignee. The order under these circumstances denying his motion to have issues framed for a jury having been within the discretion of the single justice, it should be affirmed, even if it is reviewable on appeal. Jones v. Keen, 115 Mass. 170, 180. Ginn v. Almy, 212 Mass. 486, 494. We pass to the exceptions to the master’s report. It contains copious recitals of the evidence, with a full statement of the respective claims of the parties, which are shown to have been exhaustively contested. A careful perusal, however, is insufficient to show plainly that the master’s findings of fact, based upon irreconcilable testimony, are erroneous, and all of the exceptions which depend upon a reversal of his conclusions must be overruled. Ginn v. Almy, 212 Mass. 486. The exceptions to the master’s rulings and the nature of the decrees to be entered upon the report, are left for decision. The plaintiff acquired the promissory note in suit by the indorsement of one Farquhar, the payee, and, having been vested with the legal title, he can sue in our courts in his own name, although as between himself and the indorser he may be bound to account partially for the proceeds. R. L. c. 73, § 16. Jump v. Leon, 192 Mass. 511, 513, 514. But, the note having been indorsed after maturity, it is contended that the defendant Pye, who is the maker, never became bound, as the delivery of the instrument to the payee was unauthorized. The master’s finding, that one Boak, with whom this defendant had left the note signed in blank, had been clothed with authority to fill in the amount with the date and to deliver the completed instrument to the payee in renewal of a former note, is conclusive, even if, as the defendant urges, the payee knew that Boak was an agent, and more than one inference could have been drawn from the evidence. The transaction took place in Canada and is governed by the foreign law, put in evidence. Glidden v. Chamberlin, 167 Mass. 486. American Malting Co. v. Souther Brewing Co. 194 Mass. 89. The Canada bills of exchange act, St. of Canada, 53 Vict. 1890, c.33, §20,provides that “where a simple signature on a blank.paper is delivered by the signer in order that it may. be converted into a bill, it operates as a prima facie authority to fill it up as a com — 411 — píete bill for any amount, using the signature for that of the drawer, or the acceptor, ór an indorser; and, in like manner, when a bill is wanting in any material particular, the person in possession of it has a prima facie authority to fill up the omission in any way he thinks fit. In order that any such instrument when completed may be enforceable against any person who became a party thereto prior to its completion, it must be filled up within a reasonable time, and strictly in accordance with the authority given; reasonable time for this purpose is a question of fact.” The inferences to be drawn from the evidence were questions of fact, and the findings that under all the circumstances the defendant’s agent had acted within a reasonable time, in good faith, and had not exceeded his authority, even if the face of the note was slightly less than the amount actually due, left the note a valid undischarged obligation of the defendant. See Ives v. Farmers' Bank, 2 Allen, 236; Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 146; Lloyd’s Bank, Limited, v. Cooke, [1907] 1 K. B. 794. In this connection the admission in evidence of the carbon copy of a letter to the payee from his son, to whom, while abroad, he apparently had entrusted the procurement of the note, is to be noticed. The letter stated that the son had received the note from Boak, filled in as the payee desired. The original had been lost or destroyed and could not be produced. Of itself the copy would have been in the. nature of self-serving declarations and inadmissible. But the defendants insisted that the note in suit was a “recent contrivance” to avoid the statute of limitations, because the letters of Boak to the defendant Young substantially stated that the debt had become outlawed before the note was delivered. To meet this specific defense, to which it is strictly limited by the master, the evidence was competent. It is difficult to see upon what ground the further defense of failure of consideration rests. No contention is made that any part of the original loan had been repaid to Farquhar, and the subsequent bill in equity to collect the note, having been discontinued without prejudice, could not operate either as payment or satisfaction. The master upon his findings correctly ruled that there had been no failure of consideration. The assignment to Young having been found valid, the proceeds of the judgment" against the steamship company would be ex — 412 — hausted upon distribution among the creditors for whose benefit it had been given, and the bill fails in so far as it seeks to reach and apply any part of this fund in payment of the plaintiff’s debt. Hoshor-Platt Co. v. Miller, 190 Mass. 285, 287. It also results that the claims of the creditors who have been made parties defendant, including the defendant Hall, whose right to participate was heard and allowed by a single justice, and the proportionate part which each should receive, cannot be determined in this suit. Union Trust Co. v. Reed, 213 Mass. 199, 202. .Nothing is now left but the controversy over the right to set off the plaintiff’s debt, under paragraph two, which has been established by the master. It is stated in the report that in accordance with the fourth prayer of the bill an injunction issued which is still in force, enjoining the defendant during the litigation from assigning or incumbering his claim, and, while a large verdict has been obtained in the action at law, that case is pending on exceptions taken by the present plaintiff. It was undisputed that the defendant Daggett’s assignment antedated the plaintiff’s title to the note; but it was a question of fact whether the assignment had been waived or cancelled by the mutual consent of the parties. Metropolitan Coal Co. v. Boutell Transportation & Towing Co. 185 Mass. 391, 397. It appears that, after the master had prepared his draft report, at the request of counsel for Mr. Daggett he reopened the case for the taking of further evidence upon this question, but neither Daggett nor Pye have been harmed by the exclusion of certain questions in the redirect examination of Daggett relating to the security upon which he relied for repayment of advances made and professional services rendered to Pye, and whether he knowingly intended to surrender the assignment or to waive any rights under it. The entire matter, as the witness himself said, had been exhaustively covered by his previous testimony, which he did not desire to change, and the legal effect of what he voluntarily had done was for the determination of the master and not for the judgment of the witness. The defendant Pye contends that, although the master found that the assignment had been cancelled, he was without authority to pass upon the question' of set-off. It might have been reserved for the court, but if the ruling allowing the set-off is right, an exception will not be sustained. — 413 — The defense that the remedy at law is adequate has never been pleaded by the defendant Daggett to any aspect of the bill, yet he urges, that upon the master’s report no case is made out for equitable relief, and that the court has no jurisdiction to decree a set-off. The objection to the jurisdiction comes too late. The well established rule is that if the court has jurisdiction for one purpose, it will, where justice requires, exercise it for any purpose within the scope of the bill. Dearth v. Hide & Leather National Bank, 100 Mass. 540, 543. American Stay Co. v. Delaney, 211 Mass. 229, 233. Earl of Oxford’s case, 2 White & Tudor’s Lead. Cas. in Eq. (4th Am. ed.) 1291, 1347, 1348, 1349. Stratton v. Hernon, 154 Mass. 310. It is apparent from the report that the plaintiff succeeded to the rights of the payee at the date of the transfer, and by cancellation of the assignment, no intervening equities are shown to prevent an offset as in Ames v. Bates, 119 Mass. 397, 399. It is unnecessary to decide whether the note could have been pleaded under the R. L. c. 174, providing for the set-off of mutual demands due at the date of the writ, or whether; as the defendant was a nonresident, there was a remedy by a cross action and a set-off of judgments under R. L. c. 170, § 2, or whether, notwithstanding the assignment, the executions could have been set off under R. L. c. 177, § 27. See Porter v. Leach, 13 Met. 482; Fiske v. Steele, 152 Mass. 260; Aldrich v. Blatchford, 175 Mass. 369; Franks v. Edinberg, 185 Mass. 49. The doctrine of set-off, while not recognized at common law, had its origin in equity, where the power to compel a set-off of cross demands or of judgments has been exercised whenever necessary for the proper administration of justice. Stone v. Old Colony Street Railway, 212 Mass. 459, 466. Holbrook v. Bliss, 9 Allen, 69, 77. Abbott v. Foote, 146 Mass. 333. Crummett v. Littlefield, 98 Maine, 317. Earl of Oxford’s case, supra. If, as a general rule, where statutes of set-off "have been enacted, equity will follow the construction adopted by courts of law, no express provision for a set-off of a decree for injunctive relief and for money damages in equity against a judgment at law is found in our statutes. Jump v. Leon, 192 Mass. 511, 516. Chipman v. Fowle, 130 Mass. 352. Spaulding v. Backus, 122 Mass. 553, 554. Black v. Whitall, 1 Stockton, 572. Bell v. Ward, 10 R. I. 503, 506. And in Holden v. Gilbert, 7 Paige, 208, 212, on a bill in equity to — 414 — foreclose, a judgment at law in favor of the defendant was held to be the subject of a set-off against a decree in favor of the plaintiff for the sale of mortgaged premises to satisfy the debt and costs due to the latter. The non-residence of the plaintiff Pye and his insolvency are material facts and properly may be considered. Lindsay v. Jackson, 2 Paige, 581. Tone v. Brace, 8 Paige, 597. Hendrickson v. Hinckley, 17 How. 443, 446, 447. A set-off will not operate unjustly upon any party to the case. It is within the spirit, if not the letter, of our statutes relating to set-off. The defendant is not shown to be possessed of, or entitled to, any interest in real or personal property which can be seized on execution at law or reached in equity, and upon the record it is the only way in which the plaintiff can obtain any pecuniary satisfaction. Under such conditions relief may be decreed. Spaulding v. Backus, 122 Mass. 553. North Chicago Rolling Mill Co. v. St. Louis Ore & Steel Co. 152 U. S. 596. Nor is the exercise of this right defeated by the facts found by the single justice, to whom the claim of the defendant Hall was submitted. By the affirmative averments in her answer she submits herself to the jurisdiction of the court and asks that independently of her interest as a creditor, of Pye under the assignment to Young her rights may be established and protected in the action by trustee process she had brought against Pye and the plaintiff in the Superior Court, where she has obtained judgment and taken out execution, although, the trustee having been defaulted, a motion was pending to remove the default. It being certain that all parties in interest are before the court, full relief, according to the requirements of the R. L. c. 189, § 25, that “a trustee may retain or deduct from the goods, effects or credits in his hands all demands against the defendant of which, had he not been summoned as a trustee, he could have availed himself by way of set-off on a trial or by the set-off of judgments or executions between himself and the defendant, and he shall be liable for the balance only after all mutual demands, . . . have been adjusted,” can be administered, to avoid circuity of action and needless litigation. If the exceptions are overruled and judgment is entered on the verdict for the plaintiff Pye, this court, after the rights of the parties have been settled under-the lien of the attachment in the action brought by Hall, can set off the amount of the decree against the — 415 — judgment and award execution for the difference, if any, which may be due, to the plaintiff; or, if the balance is found in favor of the defendant Pye, he may be decreed to have execution therefor in the court where the judgment was entered. We are therefore of opinion that a decree should be entered affirming the orders appealed from, overruling the exceptions to and confirming the report, denying the motions of the defendants Pye and Daggett for a final decree in their favor, and dismissing the bill with costs as to all the remaining defendants, except the defendant Hall. The decree is also to contain a clause that the assignment to the defendant Daggett has been cancelled by the parties and enjoining him from seeking to enforce any claim thereunder. But as to the defendants Pye and Hall the case is to stand for further proceedings before a single justice. Ordered accordingly.