Fay v. Corbett

Crosby, J. This is a bill in equity wherein the plaintiffs seek to have returned to them certain shares of preferred and common stock of the Carleton and Hovey Company, — one of the plaintiffs named in the bill, — which stock was issued to the defendant Corbett and to John C. Burke, now deceased. The plaintiffs also seek to recover damages alleged to have been suffered by reason of the failure of Burke and Corbett (hereinafter referred to as the defendants) to perform the terms of an alleged oral agreement. The Lowell Trust Company, as pledgee of the stock delivered to Burke, also is joined as a defendant. The ground for the relief prayed for is the alleged failure of Burke and — 408 — Corbett to furnish the corporation with all the capital required to finance its business under the terms of the alleged oral agreement, whereby the defendants were to furnish such capital and as compensation therefor were to have the shares of stock in question. It also is alleged that as a part of the oral agreement the defendants were to advance in the first instance not more than $25,000; and, in accordance with such advancement, a preliminary agreement in writing dated July 23, 1904, was entered into by the parties (a copy of which is annexed to the bill and marked “Exhibit A”). This agreement provided that the defendants were to furnish a credit which “shall not for the present exceed twenty-five thousand dollars and hereafter shall not exceed the sum to be named in a subsequent agreement to be hereafter executed by and between the parties hereto;” and that the subsequent agreement referred to should be executed within three months from July 23, 1904, and failing to do so either party had a right to terminate the agreement, in which event the plaintiffs were to pay the defendants $10,000 and to release them from liability on notes given to raise the required capital, and the defendants were to transfer the stock so held by them to the plaintiffs together with certain other shares in the plaintiff corporation which were to be transferred to the defendants as collateral. The bill states that it was agreed that the alleged oral agreement was not to be superseded or abrogated by the written contract; that the defendants furnished capital only to the amount of $41,000, which has since been paid by the plaintiffs; that the defendants have been released from liability on account of the obligations thereby incurred; that the collateral stock has been returned by the defendants to the plaintiffs; and that by reason of the defendants’ refusal to furnish the full amount of capital required under the terms of the alleged oral agreement the corporation has suffered damages estimated at $300,000. It is the contention of the defendants that there was no agreement between the parties other than the written contract of July 23, 1904, which was entered into by the defendants at the solicitation of the plaintiffs; that they were induced to make this contract by reason of the false representations of the individual plaintiffs respecting the financial condition of the corporation; that the defendants furnished the plaintiff company capital to the — 409 — amount of $57,000 by guaranteeing and indorsing notes which were discounted at different banks; that in 1905 it was mutually agreed between the parties that the defendants should not be required to furnish additional financial assistance to the plaintiffs and should not be entitled to receive from them the sum of $10,000 mentioned in the written agreement and that the plaintiffs should not ask for a return of the compensation stock. The case was referred to a master to whose report the plaintiffs filed thirty-one objections and saved an equal number of exceptions based thereon. After the master had furnished to each of the counsel a draft of his proposed report, the plaintiffs for the first time requested him to report all the evidence, and to annex to the report certain exhibits. The order of reference to the master was "to hear the parties and their evidence, to find the facts and report the same to the court, together with such portions of the evidence as he thinks may be necessary to enable this court to pass upon any question of law raised and reported.” Under this order the master was authorized and required to report only such portions of the evidence as in his judgment were necessary to enable the court to decide any question of law raised on the record. Parker v. Nickerson, 137 Mass. 487. Bowers v. Cutler, 165 Mass. 441. He was not required to annex to the report the exhibits as requested by the plaintiffs. At the hearing before a single justice, the motion of the plaintiffs that the master be required to report certain portions of the evidence was denied. It was entirely within his discretion to order the evidence or any part of it reported. Bowers v. Cutler, supra. After a hearing on the plaintiffs’ exceptions the single justice filed a memorandum in which he stated the grounds and reasons for his decision, and entered an order that the exceptions be overruled and the report confirmed; thereafter an interlocutory decree was entered to that effect. No appeal was taken from the decree overruling the exceptions and confirming the report. We have examined carefully the objections upon which the exceptions are founded, and which need not be recited, and are of opinion that the exceptions cannot be considered under R. L. c. 159, § 26, as it does not appear to us that the final decree is erroneously affected by the interlocutory decree overruling the exceptions and — 410 — confirming the report. Burnett v. Commonwealth, 169 Mass. 417. Although the plaintiffs did not appeal from the decree overruling the exceptions to the report, it was open to them on this appeal from the final decree to argue on the facts found by the master that the decree is not warranted. French v. Peters, 177 Mass. 568. Lyons v. Elston, 211 Mass. 478. The only evidence reported by the master relates to the interview had in July, 1905, between the plaintiffs and the defendant Corbett. Upon an examination of this evidence we are satisfied that the findings based thereon, in view of the other findings, were not unwarranted. The other findings, made upon evidence which is not reported, are conclusive. It appears from the report that the written agreement of July 23, 1904, was the only agreement made by the parties; that the stock delivered to the defendants, which the plaintiffs seek to recover, was the consideration for the agreement; that at the time it was entered into the Carleton and Hovey Company was in an insolvent condition and the stock then had only a speculative value; that the defendants came to the assistance of the plaintiffs at their earnest solicitation; that the plaintiffs were not misled nor deceived by the defendants; that there was no claim on the part of the plaintiffs that any fraud had been practised upon them by the defendants or that there was any mistake on their part when they signed the written agreement and that it was not unconscionable nor extortionate. The master further finds that the defendants “did all they were called upon to do by the terms of the agreement and much more.” In view of these findings and other findings which need not be recited, it is manifest that they are not open to review since the evidence is not before us. Kennedy v. Welch, 196 Mass. 592, 594. Schneider v. Hayward, 231 Mass. 352. The case at bar falls within the class where the actual consideration for an agreement may be shown by oral evidence, Ely v. Wolcott, 4 Allen, 506, Way v. Greer, 196 Mass. 237, and cases collected at page 245, and is plainly distinguishable from cases like Goldenberg v. Taglino, 218 Mass. 357, and Glackin v. Bennett, 226 Mass. 316. As we find no error of law the decree must be affirmed, with costs. So ordered.