Cosmopolitan Trust Co. v. Cirace

DeCourcy, J. This bill in equity was brought by the Cosmopolitan Trust Company, through the commissioner of banks as liquidating agent, to establish the amount due it from the defendant Cirace on account of a certain promissory note; to reach and apply toward the satisfaction thereof a certain debt alleged to be due to Cirace from the defendant Florio; and for general relief. The following facts found by the master are here material: In November, 1918, Cirace, who was engaged in the wholesale grocery business under the name “ Italian Importing Company,” became interested in a proposition to purchase large quantities of olives in California and ship them to Boston for sale. He made arrangements with the Fidelity Trust Company to finance the purchase, and to hold the shipments as security for its advances; and he went to California, leaving one Cataldo in full charge of his Boston [102] business. During his absence the business was incorporated, under the same name, “ Italian Importing Company,” for the sole purpose of providing a suitable medium for receiving from the Fidelity Trust Company the advances made from time to time, and giving security therefor. On the return of Cirace to Boston, the Fidelity Trust Company insisted upon further collateral to secure the advances it had made; and he executed a note for $10,000 payable to said trust company, secured by a mortgage of certain real estate on North Street owned by him. Thereafter the Fidelity Trust Company insisted that Cirace reduce the indebtedness of the Italian Importing Company, and refused to release the olives held in storage except upon the payment of approximately $40,000. A loan of $46,345 from the Cosmopolitan Trust Company was negotiated by a straw man for Cirace’s benefit; a check for that amount was later made, payable to Cirace’s then attorney, one Dewey; and it was indorsed by said Dewey to the Fidelity Trust Company. In connection with this transaction, and as part security for said loan, the Cosmopolitan Trust Company received from the Fidelity Trust Company through said Dewey an assignment of the mortgage. No payment of principal or interest was made on the note. On or about July 27, 1921, the commissioner of banks, who had taken possession of the Cosmopolitan Trust Company, proceeded to foreclose the mortgage. A sale was duly held under the power in the mortgage; the property was bid in for $7,000 in the plaintiff’s name, and the foreclosure deed and affidavit were duly executed and recorded. The plaintiff has never obtained possession of the premises. The defendant Florio has been in possession, through tenants holding under her at a rental of $65 per month, claiming to have a six years’ lease from Cirace, antedating the mortgage. As to whether or not any such lease was in fact executed, the master was unable on the evidence to find. A final decree was entered by the single justice, in accordance with the master’s findings, establishing the plaintiff’s title to the premises under the foreclosure deed as against the defendants; determining the indebtedness of Cirace on the mortgage [103] note to be $4,963.16 and of Florio, for money received as rentals, to be $1,215; and directing executions to issue. The defendant Cirace filed twenty-six exceptions to the master’s report. More than half of them were based on objections to the master’s findings of fact or to his failure to find certain other alleged facts. Manifestly we cannot revise the findings in the absence of the evidence. Cook v. Scheffreen, 215 Mass. 444. The remaining exceptions are to the admission and exclusion of certain evidence. The testimony of the witness Rich, qualifying him to give an opinion upon Cirace’s signature, was admissible in the discretion of the master. Commonwealth v. Meehan, 170 Mass. 362. When it was justifiably found that the note and mortgage were executed by Cirace, these and the other papers were rightly admitted in evidence, regardless of the genuineness of the signature of Donata Cirace, who is not a party. Cirace, or some one in his behalf, presented this mortgage in its present state to the Fidelity Trust Company as security, and he is estopped to deny its genuineness. The questions with reference to the Pacific Products Corporation were properly excluded as not material to the issue that was being tried. In brief, the exceptions to the master’s report were overruled rightly. The contention of the defendant Cirace, on his appeal from the final decree, is that there was no consideration for the mortgage note. But it is apparent from the facts found by the master that Cirace was the person mainly interested financially in the undertaking to buy olives on a large scale and ship them to Boston for sale; and that, when the project proved unprofitable and it became necessary to give additional security to the Fidelity Trust Company, which had a lien on the olives in storage, this mortgage was given by him because he was the real party in interest. The defendant Florio filed no exceptions to the report. In her answer and at the trial she claimed to hold the premises under a lease from Cirace antedating the mortgage. As already stated, the master was unable to find on the evidence whether or not such lease was in fact executed. He did find however that “ during the entire period between the [104] acquisition by the plaintiff of title to the North Street property under the foreclosure sale, and the time of the hearings before me as master, the defendant Florio has continued to rent one room on the second floor of the building located on said property, together with the store on the ground floor thereof to said Angello at a rental of 865 a month.” So far as the record discloses, Grudita Florio has never paid over this money to any one. We cannot say that the single justice was not warranted in holding her responsible to the plaintiff, in view of all the facts disclosed; whether the decree was based on the application to the debt established against Cirace of money due to him from said Florio under a lease; or upon her duty to pay over to the plaintiff, under the prayer for general relief, the rental collected by her from tenants of its property, which she holds only as a constructive trustee. Decree affirmed, with costs.