Brooks v. National Shawmut Bank of Boston

• Decision Date: 08 February 1949
• Citation: 323 Mass. 677,84 N.E.2d 318
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: HUBERT W. BROOKS & others v. THE NATIONAL SHAWMUT BANK OF BOSTON.

323 Mass. 677

84 N.E.2d 318

HUBERT W. BROOKS & others v. THE NATIONAL SHAWMUT BANK OF BOSTON.

Supreme Judicial Court of Massachusetts, Suffolk.

February 8, 1949

September 14, 1948.

Present: QUA, C.

J., LUMMUS, RONAN SPALDING, & WILLIAMS, JJ.

Equity Pleading and Practice, Report of evidence, Appeal. Equity Jurisdiction Bill of review. Words, "New matter."

An appellant from a final decree in a suit in equity in the Superior Court, who solely because of the death of a stenographer appointed under G. L.

(Ter. Ed.) c. 214 Section 24, was unable to present to this court a transcript of the testimony in support of a contention that findings of fact by the trial judge were plainly wrong, should be entitled to retry his case.

In a suit in equity, where the final decree was proper on the pleadings and findings of material facts so that it must be affirmed on appeal, but it appeared that the appellant, solely because of the death of a stenographer appointed under G. L. (Ter. Ed.) c. 214, Section 24, was unable to present to this court a transcript of the testimony to support a contention that the findings made by the trial judge were plainly wrong, the remedy of the appellant to obtain a retrial of the case was by a petition to the trial court for a bill of review; the situation caused by the stenographer's death was "new matter" arising after the entry of the decree.

BILL IN EQUITY, filed in the Superior Court with a writ of summons and attachment dated October 9, 1939.

The case was heard by Goldberg, J. In this court the case was submitted on briefs.

J. C. Reilly & J.

P. Rooney, for the defendant.

S. C. Rand & G. d'A.

Belin, Jr., for the interveners.

SPALDING, J. The plaintiff Brooks, who owned first mortgage bonds of the Preble Corporation (hereinafter called the corporation) brought this suit against The National Shawmut Bank of Boston (hereinafter called the defendant) individually and as trustee under a mortgage indenture dated June 30, 1923, which it had entered into with the corporation. The bill was brought on behalf of the plaintiff and all other bondholders similarly situated. The members of a bondholders' committee acting under a deposit agreement were permitted to intervene as plaintiffs and will be referred to as such hereafter in this opinion. The bill charged that the defendant negligently performed its duty as trustee by failing to comply with the terms of the indenture in regard to the issuance of bonds and the investment of sinking fund assets, and prayed for an accounting and damages. The defendant in its answer to the motion to intervene sought relief against the plaintiffs by way of counterclaim. The counterclaim alleged in substance that the plaintiffs had deliberately delayed proceeding against the defendant for an accounting and damages until the defendant had completely divested itself of the trust property and no longer had a lien thereon to secure its right of reimbursement under the indenture for liability or costs which it had incurred, including costs between solicitor and client. The defendant prayed that the plaintiffs be enjoined from prosecuting any cause of action until the defendant was repossessed of the trust property; it also prayed "for its costs, including costs between solicitor and client."

The case was referred to a master who found that the defendant was not guilty of any wilful default. He found, however, that in certain instances bonds were certified and issued upon documents which were not in compliance with the terms of the trust; that in one instance there was an improper investment of sinking fund assets in an amount slightly in excess of $34,000; ^[1] and that in these instances the officers and employees of the defendant did not act with reasonable diligence. With respect to the improper certification of bonds by the defendant, the master found that the plaintiffs suffered no damage. He found that the allegations contained in the counterclaim (with the exception of those relating to costs and expenses which he did not hear) were not sustained. The report of the master was confirmed by an interlocutory decree. Thereafter a judge of the Superior Court heard the parties on the issue whether the defendant was entitled to costs and expenses as prayed for in the counterclaim. A final decree was entered dismissing the bill and the counterclaim. The defendant appealed.

The questions presented by this appeal arise out of the dismissal of the counterclaim. The only question now argued is whether the judge rightly dismissed the counterclaim on the issue heard before him, namely, that relating to costs and expenses. Pursuant to a request by the defendant the judge reported the material facts found by him. He found that it was reasonable and necessary for the defendant to defend the suit brought against it and to retain counsel, to employ experts and to "expend certain sums of money" in the preparation and trial of the case. He found that the sum actually expended by the defendant for the preparation and trial of the bill and counterclaim down to the time of hearing on the counterclaim was $60,060.20, and that it had agreed to pay an additional sum of $10,000 for legal services "for carrying the case through to a final decree in the Superior Court, which may involve an effort on . . . [the defendant's] part to obtain reimbursement from the plaintiff for . . . [its] counsel fees and expenses." The conclusion of the judge was as follows: "Of the total amount of money which the defendant has expended and has agreed to expend, I am unable to determine, on the present state of the evidence, how much of the money was reasonably and necessarily expended in the defence of the plaintiff's bill of complaint."

The defendant makes no contention that these findings would not support the decree dismissing its counterclaim. See Turner v. Morson, 316 Mass. 678, 681. Its position is that a report of the evidence would disclose that the findings were plainly wrong. The evidence, however, is not before us for reasons which will presently appear.

When the counterclaim was heard in the Superior Court a stenographer was designated by the judge to report the testimony to this court pursuant to G. L. (Ter. Ed.) c. 214, Section 24. See Rule 76 of the Superior Court (1932). The final decree was entered on April 2, 1947, and the defendants' appeal was seasonably claimed. The judge filed his findings of material facts on May 8, 1947, as of May 2, 1947. On November 19, 1947, the defendant filed a paper entitled "suggestion of death" which recited that the stenographer who had been designated by the judge to report the evidence "became ill on March 6, 1947, and died on May 25, 1947; and for that reason the appellant is unable to procure a transcript of the testimony." ^[1] Recognizing that the findings of the trial judge cannot be revised on appeal without a report of all the evidence (see Romanausky v. Skutulas, 258 Mass. 190 , 194), the defendant asks that the decree dismissing the counterclaim be reversed and that the case be remanded to the Superior Court with instructions to determine how much the defendant was entitled to recover for costs and expenses. The only ground urged in support of reversal is that, due to the death of the stenographer, it cannot bring the evidence here.

We lay to one side the underlying question (argued at length by the parties) whether the defendant is entitled to reimbursement for costs and expenses. To attempt to decide that question on this record would not be fair to the parties. The judge apparently took the view that the defendant was entitled to recover costs and expenses but did not sustain the burden of establishing what expenses were attributable to the preparation and trial of the bill as distinct from the counterclaim. Lacking the evidence which was before the trial judge, we are in no position to decide the question of liability, and express no opinion on it.

That brings us to the question whether, in view of the defendant's inability to have the case reviewed in this court on all the evidence through no fault of its own, it ought to have an opportunity to retry the issue of costs and expenses. We are of opinion that it should.

The defendant could appeal to this court, as of right, under G. L. (Ter. Ed.) c. 214, Section 19. And if it saw fit it could bring the case here on all the evidence under G. L. (Ter. Ed.) c. 214, Section 24. Such an appeal is much broader than one which comes here only on a report of material facts. Appeals of the latter class must be decided solely upon the issue whether the facts reported, with any reasonable inferences we can draw from them, support the decree. Turner v. Morson, 316 Mass. 678 , 680-681. Vergnani v. Vergnani, 321 Mass. 703 . But when a case comes here on all the evidence "all questions of law, fact and discretion are open for our decision. From the evidence we can find facts not expressly found by the judge. If convinced that he was plainly wrong, we can find facts contrary to his findings." Lowell Bar Association v. Loeb, 315 Mass. 176 , 178. This is a substantial right. To deprive the defendant of it because of an event for which it was in no wise responsible would be manifestly unjust. That a hardship is imposed on the plaintiffs in requiring them to undergo the burden and expense of a second trial after a decree in their favor cannot be gainsaid. But that hardship is less than that which the defendant would suffer if it were to be deprived of its full day in court.

Authority as well as reason supports this conclusion. The rule is well settled both in this country and in England that where a party without fault on his part, loses the benefit of his exceptions through the death, illness or...