Barron v. International Trust Co.

• Decision Date: 25 November 1903
• Citation: 68 N.E. 831,184 Mass. 440
• Parties: BARRON v. INTERNATIONAL TRUST CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

184 Mass. 440

68 N.E. 831

BARRON v. INTERNATIONAL TRUST CO.

Supreme Judicial Court of Massachusetts, Suffolk.

November 25, 1903

COUNSEL

Whipple, Sears & Ogden, for plaintiff.

Robt. M. Morse and Wm. M. Richardson, for defendant.

OPINION

BRALEY J.

This is an action of contract, in which the plaintiff seeks to recover for money paid by him in advertising in certain newspapers a proposed subscription for, and sale of, mortgage bonds to be issued by a corporation known as the Boston Breweries Company, of which the defendant was to be trustee for the bondholders. The declaration contained three counts but the first and second become immaterial, as the case was tried on the third count, which, in substance, alleges that the defendant, being 'interested in the promotion of a combination of corporations,' desired to place the bonds on the market, and agreed with and promised the plaintiff that, if he would advertise the enterprise in certain newspapers, it would pay him out of 'such money or securities as might be paid to it, or such subscriptions as might be made thereafter to said securities,' and that subscriptions were made to the bonds, and money paid on account thereon to the defendant who has failed and neglected to pay the plaintiff. After the plaintiff had begun to advertise the securities, and under the terms of the agreement between it and the Boston Breweries Company, the defendant obtained subscriptions for the bonds to the amount of $60,000, on which the several subscribers therefor paid 10 per cent. on a par value of $100 for each bond, and in this way the defendant received the sum of $6,300. For reasons not necessary to be stated, the undertaking did not prove financially successful. No trust deed was ever executed or delivered to the International Trust Company, neither were any bonds prepared and engraved, and 'the subscription was a failure.' The underwriting agreement was canceled by the defendant on the ground of 'misrepresentations in the prospectus.' These misrepresentations related particularly to the earning capacity of the different breweries, it being claimed that the amount of the entire earnings had been greatly overstated. After the cancellation of the agreement the money which had been paid to the defendant on account of subscriptions to the bonds was returned by it to the several subscribers. A verdict having been returned for the defendant by order of the court, the case is here on exceptions to this ruling by the plaintiff, as well as to the admission of certain evidence at the trial.

The question raised are so closely connected that they may be considered together. The relation of the parties to this suit is well stated in the closing language of the interview between the plaintiff and the president of the defendant when the contract was made: 'I said, 'If the money comes in, you will pay me?' 'Certainly,' he said 'I will pay you out of the money that comes in, but I do not guaranty that any money will come in.' I said 'That is satisfactory to me." Plainly, no promise was made by the defendant to pay the plaintiff absolutely, but only on condition that payment was to be made out of such money, securities, or subscriptions as might be paid in; and the plaintiff now contends that as the defendant received an amount sufficient, at least, to pay his claim, it is liable therefor. And if nothing further appeared, this would be so. But the evidence offered by the defendant to show why the scheme failed was competent; and it cannot be successfully contended that, upon the plaintiff showing that it had received the money, the defendant is precluded from proving the cancellation of the underwriting agreement and abandonment of the undertaking, and thereby showing that the condition under which the plaintiff...