O'Brien v. O'Brien

• Decision Date: 25 May 1921
• Parties: O'BRIEN v. O'BRIEN et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

238 Mass. 403

131 N.E. 177

O'BRIEN

v.O'BRIEN et al.

Supreme Judicial Court of Massachusetts, Worcester.

May 25, 1921.

Appeal from Superior Court, Worcester County; E. B. Bishop, Judge.

Suit by William J. O'Brien against John P. O'Brien and others. From a decree dismissing the bill, plaintiff appeals. Reversed.

Each defendant demurred, but only one of the demurrers was sustained, the others not being acted upon, and, on plaintiff's failure to amend, final decree was entered dismissing the bill.Joseph P. Carey, Herbert W. Blake, and Robert W. Simonds, all of Gardner, for appellant.

Murray & Loughlin, of Gardner, for appellees.

RUGG, C. J.

This is a suit in equity concerning shares of capital stock in a corporation. There are three defendants. Each filed separate demurrers, all of the same tenor. No action except the final decree dismissing the bill appears to have been taken upon the demurrers of the defendants other than that of Margaret O'Brien. Upon her demurrer an order was made to the effect that the demurrer be sustained, and that ‘unless within two weeks leave shall be given to amend, a decree dismissing the bill shall be entered without further order.’ Two days after the expiration of the two weeks thus limited, another order was entered that ‘unless leave to amend the bill in this case is given on or before May 10, 1920, a decree is to be entered dismissing the bill with costs.’ Those orders in legal contemplation mean that the cause will be dismissed if the action in question is not taken within the time specified, and that until order based upon proof is made that such action has not been taken, the court still may deal with the case. Loonie v. Wilson, 233 Mass. 420, 423, 124 N. E. 272;Plaisted v. Cooke, 181 Mass. 118, 63 N. E. 132.

There was a finding of fact that there was no compliance with either of those orders. No interlocutory decree was entered. A final decree was entered dismissing the bill as to all the defendants without any recital as to the grounds upon which it was entered. The plaintiff's appeal from the final decree brings the case here.

The better and more satisfactory practice would have been to have entered an interlocutory decree sustaining the demurrer. A mere order sustaining or overruling the demurrer has been treated as the equivalent of an interlocutory decree. Parker v. Flagg, 127 Mass. 28;Nelson Theatre Co. v. Nelson, 216 Mass. 30, 33, 102 N. E. 926.

[3] Since the only pleadings filed by the defendants were demurrers, and since the decree in dismissing the bill was final in the sense of disposing of the whole case without reservation of any sort (Corbett v. Craven, 193 Mass. 30, 78 N. E. 748), there is ground for the contention that the plaintiff may proceed in this court on the presumption, as to the defendants other than Margaret O'Brien, that the final decree was in substance and effect a decree sustaining the several demurrers of those defendants (see Keown v. Keown, 231 Mass. 404, 408, 121 N. E. 153;Capaccio v. Merrill, 222 Mass. 308, 110 N. E. 626;Coyle v. Taunton Safe Deposit & Trust Co., 216 Mass. 156, 160, 103 N. E. 288), and that his appeal seasonably taken and prosecuted opens to him to argue the merits of his bill as put in issue by the demurrers of those defendants. The entry of a final decree dismissing a bill with costs when the only pleading filed by the defendant is a demurrer imports a sustaining of the demurrer in the absence of anything either on or outside the record to indicate any other ground. The usual and proper practice, however, is an interlocutory decree sustaining the demurrer.

The merits of the demurrer are open for another reason. The final decree was entered because the plaintiff failed to amend his bill in accordance with the orders to that end. Although no appeal was taken by the plaintiff from the order sustaining the demurrer of Margaret O'Brien, nevertheless, interlocutory decrees not appealed from are open to revision on appeal from a final decree so far as such final decree is erroneously affected thereby. R. L. c. 159, § 26, now G. L. c. 214, § 27. The only ground for the order for a final decree dismissing the bill, so far as disclosed by the record, was that the bill was demurrable for the reasons set forth by the demurrer of Margaret O'Brien. There was no occasion for the plaintiff to amend his bill, if it were not defective for those reasons. Therefore the freedom from error of the final decree depends upon the question whether the order sustaining the demurrer of Margaret O'Brien was right. It is open to revision here and now. Cawley v. Jean, 189 Mass. 220, 225, 227, 75 N. E. 614;Harrell v. Sonnabend, 191 Mass. 310, 77 N. E. 764;Lyons v. Elston, 211 Mass. 478, 482, 98 N. E. 93;Fay v. Corbett, 233 Mass. 403, 410, 124 N. E. 73.

The substantial allegations of the bill are that in 1906 the plaintiff and the two individual defendants organized under the laws of Connecticut a corporation named the Otter River Board Company, of which the three constituted all the stockholders and officers; its capital stock was $28,000, divided into 280 shares, each of the par value of $100, of which the plaintiff held 10, the defendant Margaret O'Brien 10, and the defendant John P. O'Brien 260 shares; it had no tangible property in the state of its domicile, but had real estate and machinery and conducted business at Templeton, in this commonwealth; that it built up a successful business and acquired a valuable good will; that in 1913 its plant was destroved by fire; that in 1913 the defendant John P. O'Brien, instead of liquidating the Connecticut corporation, applied insurance money received by reason of the fire to the organization and payment of the capital stock in a Massachusetts corporation of the same name as that of the Connecticut corporation, and caused to be conveyed by deed in the name of the Connecticut corporation, without vote of its stockholders and without notice to the plaintiff, all its real estate to the Massachusetts, corporation; that the Massachusetts corporation took possession of the good will and other assets of the Connecticut corporation and has continued to enjoy and use them ; that John P. O'Brien allowed the charter of the Connecticut corporation to lapse by failing to file required returns, and that that corporation was legislated out of existence in 1916; that the defendant John P. O'Brien professed to and did act as agent and trustee of the plaintiff's interest in the Connecticut corporation during its active business; that the plaintiff knew in a general way of proceedings for the organization of the Massachusetts corporation--

‘but was informed by defendant John P. O'Brien that the stockholders of the old corporation would receive stock in the new corporation to an amount pro rata to that held by them in the old corporation and that his interest therein would be properly protected by the said John P. O'Brien, and relying upon said assurance took no steps or made no inquiries to find out whether that arrangement had been actually...