Coffing v. Dodge

• Decision Date: 06 January 1897
• Citation: 167 Mass. 231,45 N.E. 928
• Parties: COFFING v. DODGE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

167 Mass. 231

45 N.E. 928

COFFING v. DODGE.

Supreme Judicial Court of Massachusetts, Berkshire.

January 6, 1897

COUNSEL

H.C. Joyner and G.C. Warner, for plaintiff.

Marshall Wilcox and Frank H. Wright, for defendant.

OPINION

BARKER, J.

The action was begun on April 22, 1895, by a writ in contract. The original declaration had five counts, the first of which was in contract for breach of the defendant's undertaking to safely invest for the plaintiff money which he promised to invest safely for her as her agent; the third was for fraudulent representations, whereby the plaintiff was induced to allow the defendant to invest the plaintiff's money in certain mortgages, which turned out not to be good; the fourth count was for negligence in investing the plaintiff's money in worthless notes or bonds; and the fifth was to enforce the defendant's liability as a stockholder in a corporation which had guarantied certain notes and mortgages belonging to the plaintiff. Before the trial, a supplemental declaration was added, in which the plaintiff alleged a rescission by herself of the contract under which her money was invested by the defendant in the mortgages, and sought to recover the money, with interest. At the trial, the plaintiff relied upon the first, third fourth, and fifth counts of the original declaration, and upon the supplemental declaration. At the close of the evidence, the plaintiff's counsel were asked by the court if they would elect upon what counts they relied, and replied that they were not prepared to make an election, but relied on the above-mentioned counts of the original declaration and on the supplemental declaration. The court ruled that the plaintiff could not recover upon the fifth count, even if she proved all the allegations therein made, and also that she could not recover in this action under the supplemental declaration; and the case was submitted to the jury on the first, third, and fourth counts of the original declaration. The jury returned a general verdict for the plaintiff, and both parties have entered bills of exceptions in this court. The plaintiff's bill states exceptions to the ruling that she could not recover under the fifth count, and also to the ruling that she could not recover under the supplemental declaration.

The ruling that the plaintiff could not recover upon the fifth count of the original declaration was right. We do not enforce foreign statutes which provide for bringing into court the creditors and stockholders of a foreign corporation, in order to liquidate its affairs, or which impose, for the benefit of the creditors of a foreign corporation, a penal liability upon the stockholders. Erickson v. Nesmith, 15 Gray, 221, 4 Allen, 233; Hutchins v. Mining Co., 4 Allen, 580; Halsey v. McLean, 12 Allen, 438; New Haven Horse Nail Co. v. Linden Springs Co., 142 Mass. 349, 7 N.E. 773; Post v. Railroad Co., 144 Mass. 341, 11 N.E. 540; Bank v. Rindge, 154 Mass. 203, 27 N.E. 1015. It is true that in Bank v. Ellis (Mass.) 44 N.E. 349, we sustained, upon demurrer, a declaration to enforce the liability of a stockholder in a Kansas corporation. But it was there alleged that the liability was contractual, arising from the subscription of the defendant for his stock, whereby he guarantied the payment sought to be recovered, and that the liability had been so construed in Kansas by its court of last resort, and other allegations showing that no injustice could be done to the defendant or to the corporation or other creditors or stockholders by entertaining the action. Here there is no distinct allegation that the liability is contractual, nor that it has been so construed by the courts of Kansas, nor are there any allegations from which it can be seen that no injustice to others will be done. The ordinary rule must be applied, and we need not consider whether such a count could be joined in one action with the third and fourth counts, which were in tort, and not for the same cause of action, as this count.

The ruling that the plaintiff could not recover under her supplemental declaration, filed long after the commencement of the action, was also right. That declaration set up, as the foundation of the plaintiff's right to recover, an alleged rescission, made after the commencement of the action, of the contract upon which the action itself was founded, and which the plaintiff had affirmed by the act of bringing the action for its breach. See Connihan v. Thompson, 111 Mass. 270; Whiteside v. Brawley, 152 Mass. 133, 24 N.E. 1088. Even if the bringing of the suit upon the contract did not conclusively determine the plaintiff's right to rescind, because of her ignorance of the facts subsequently disclosed, she cannot be allowed to maintain the present action upon a rescission made after the action was commenced. We do not consider whether enough was in fact done to work a rescission if she still had a right to rescind, or whether such a count, which is in contract for the recovery of the consideration paid, can be joined with the third and fourth counts in tort.

The defendant's bill brings up exceptions to the ruling of the court as to the effect upon the action of the statute of limitations, and as to the measure of damages. The investments in respect of which the plaintiff sought to recover under the counts which went to the jury were made on June 29, 1888, August 18, 1888, January 26, 1889, and May 18, 1889. Her writ was sued out on April 22, 1895, more than six years after the time when all the investments were made, except the last investment. The defendant contended that the cause of action on account of these transactions except the last was barred by the statute of limitations, but the court instructed the jury as follows: "There is a rule of law, and it is set up in this case, that in certain cases the writ must be brought within six years from the time the cause of action accrued, and the question is whether it accrued at the time of the first loan, or at the time the final loan was made. That is a question of law, to be passed upon by the supreme court, and, for the purposes of this case, I instruct you that you need not trouble yourselves about any part of it being outlawed." As the case stood, this ruling was clearly wrong. The presiding justice was submitting to the jury three counts, each relating to all of the investments above specified. One count was for breach of the defendant's undertaking to invest the plaintiff's money safely; one, for simple negligence in putting her money, as her agent, into worthless securities; and one, for fraudulent misrepresentations, whereby the plaintiff was induced to allow the defendant to place her money in the investments mentioned. It is plain that the ordinary or six-years statute of limitations applied to each of these counts,--the count in contract, the count for negligence, and also to the count for fraud,--unless it should be found by the jury that the defendant had fraudulently concealed from the plaintiff the cause of action on which the count declared, in which case only, under the provisions of Pub.St. c. 197, § 14, the plaintiff's action would not be barred by the statute until six years after she discovered that she had the right of action. The plaintiff now contends that, by reason of the statute last cited, no part of her cause of action is barred. But the bill of exceptions contains no intimation that this contention was made at the trial, and the clear implication from the language of the instruction itself, that "the question [as to when the cause of action arose] is whether it accrued at the time of the first loan, or at the time the final loan was made. That is a question of law, to be passed upon by the supreme court,"--is to the contrary. If the contention that the defendant had fraudulently concealed the cause of action from the plaintiff, and that no part of her right of action was barred, because she had not discovered it until within less than six years before bringing her suit, was, in fact, raised at the trial, the instruction given was still more inadequate to the case than if the question then raised was whether the six years began to run from the time when the first loan was made or when the last was made. In substance, the ruling given withdrew the statute of limitations from the consideration of the jury. The bill of exceptions does not disclose a state of evidence upon which it could be ruled, as matter of law, that the ordinary statute of limitations did not apply, and that no part of the plaintiff's cause of action was barred. The ruling given was therefore wrong, and the defendant's exception to it must be sustained.

The evidence tended to show that the investments of the plaintiff's money, to which the counts submitted to the jury related, were in mortgages upon lands in Wichita, Kan securing notes payable upon time, with semiannual interest, and guarantied by a Kansas loan and investment company; that the plaintiff held these securities as investments, relying upon the defendant's representations, and receiving the interest up to April 1, 1890, when interest due upon one of the mortgages was not paid; that after that time she received no interest upon any of the loans; that, by purchases of the equities and foreclosures made during the years 1891 and 1892, she became the owner of the lands covered by the mortgages;...