Comm'r of Banks v. Tremont Trust Co.

• Decision Date: 31 May 1929
• Parties: COMMISSIONER OF BANKS v. TREMONT TRUST CO. et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

267 Mass. 331

166 N.E. 848

COMMISSIONER OF BANKS

v.TREMONT TRUST CO. et al.

Supreme Judicial Court of Massachusetts, Suffolk.

May 31, 1929.

Appeal from Supreme Judicial Court, Suffolk County.

Petition for attachment of William R. Scharton for contempt for failure to comply with decree for payment of money in the case of Commissioner of Banks against the Tremont Trust Company and others. From an interlocutory decree confirming master's report and final decree ordering payment of money, defendant William R. Scharton appeals. Affirmed.

Argued before RUGG, C. J., and CROSBY, PIERCE, and WAIT, JJ.

Maurice Palais, for appellant Scharton.

H. R. Atkinson, for appellee Com'r of Banks.

RUGG, C. J.

[1] This case comes before us on appeal from a final decree entered on a petition for attachment of William R. Scharton, hereafter called the defendant, for contempt for failure to comply with a decree for the payment of money entered in accordance with the decision in Commissioner of Banks v. Tremont Trust Co., 259 Mass. 162, 156 N. E. 7. The final decree from which the present appeal was taken ordered the defendant to pay a sum of money to the plaintiff in way of fine and ordered other money payments to the plaintiff. It is manifest from the record that the case has been treated throughout by the petition, by the parties and by the final decree as civil and not as a criminal contempt. The adjudication was in its nature exclusively remedial for the benefit of the petitioner and not punitive in vindication of the authority of the court, and for the public welfare. The case is treated as properly here by appeal. No objection of that nature has been raised. Root v. MacDonald, 260 Mass. 344, 364, 365, 157 N. E. 684 (54 A. L. R. 1422);Hayes v. Fischer, 102 U. S. 121, 26 L. Ed. 95;Worden v. Searls, 121 U. S. 14, 7 S. Ct. 814, 30 L. Ed. 853;Bessette v. W. B. Conkey Co., 194 U. S. 324, 335, 24 S. Ct. 665 (48 L. Ed. 997);Matter of Christensen Engineering Co., 194 U. S. 458, 460, 24 S. Ct. 729 (48 L. Ed. 1072);In re Merchants' Stock & Grain Co., Petitioners, 223 U. S. 639, 32 S. Ct. 339, 56 L. Ed. 584; Farmers' & Mechanics' National Bank of Fort Worth, Texas, v. Wilkinson, 266 U. S. 503, 506, 45 S. Ct. 144 (69 L. Ed. 408).

[2] Since the result to the defendant must be the same, there is no objection to stating substantive grounds calling for that result. Commonwealth v. McNary, 246 Mass. 46, 48, 140 N. E. 255 (29 A. L. R. 483), and cases collected; Creeley v. Creeley, 258 Mass. 460, 463, 155 N. E. 424 (52 A. L. R. 285).

The original bill before the court in 259 Mass. 162, 156 N. E. 7, was designed to enforce the statutory liability of stockholders in the Tremont Trust Company; it was filed on May 8, 1923, and the rescript pursuant to the opinion of this court was sent on or about April 6, 1927. The final decree for the payment of money, on failure to comply with which the present petition for contempt is founded, was entered as of May 2, 1927. The defendant in his answer admitted the allegations of the petition as to failure to pay money as ordered in the decree of May 2, 1927, but set up in defence in substance that by involuntary petition filed on March 10, 1923, he was adjudicated a bankrupt on March 5, 1924; that he made offer in composition, which was confirmed by the bankruptcy court on October 8, 1925; that he has paid in accordance therewith the specified percentage of his debt to the plaintiff among his other creditors, the claim here in suit having been duly proved.

The plaintiff did not set the case down for hearing on the bill and answer. If that had been done, the facts thus set up would then have been admitted and a hearing would have been like a hearing on a demurrer and without evidence. Rubenstein v. Lottow, 220 Mass. 156, 161, 107 N. E. 718. [1926] Equity Rule 27. Under present equity practice there cannot be exception to an answer, and none was filed in the case at bar. Pearson v. Treadwell, 179 Mass. 462, 468, 61 N. E. 44;Costello v. Tasker, 227 Mass. 220, 222, 116 N. E. 573;Harvard Trust Co. v. Frost, 258 Mass. 319, 321, 154 N. E. 863. The case was referred to a master under a rule requiring him to hear the parties and their evidence, to find the facts and report the same to the court. By his report it appears that the entry of the decree ordering payment of money by the defendant and due service of the petition for attachment for contempt were admitted by the defendant. The master found that, since the entry of the decree and continuously to the time of the hearing, the defendant had been of sufficient financial ability to satisfy the decree in full with accumulated interest, and that he had not done so. It is also found that the original bill in 259 Mass. 162, 156 N. E. 7, was taken pro confesso against this defendant, who did not appear or interpose any defence. The report of the master sets out an offer of proof of the facts set up in the answer touching the petition and adjudication in bankruptcy, the offer of composition confirmed by the bankruptcy court, and the payment in accordance therewith to the plaintiff among other creditors. It is then said in the report that, against the objection of the defendant, this offer of proof was excluded and that the defendant saved an exception. The report concludes to the effect that copy of the final report was mailed to all counsel with the customary five day notice, and that during that period of five days no objections to the final draft were filed. No objections are appended to the report.

An interlocutory decree was entered confirming the master's report, and a final decree adjudging the defendant in contempt and ordering him to pay a fine to the plaintiff and making other orders as to the payment of the amount fixed by the original suit as due from the defendant.

It is provided by [1926] Equity Rule 26 that after notice of the settlement of the draft of a master's report and furnishing copy thereof, ‘five days shall be allowed for bringing in written objections thereto, briefly and clearly specifying the matters objected to and the cause thereof, which objections shall be appended to the report.’ In substance and effect this is the same as [1905] Equity Rule 31. Required practice under that rule has been expounded in many decisions, only a few of which need be cited.

‘Observance of the rules prescribing the method of raising questions of law upon the report of a master is important to secure orderly procedure and to preserve the rights of parties. It has been decided repeatedly that such questions cannot be considered by the court without a substantial observance of the rules.’ Knowlton, C. J., in Smedley v. Johnson, 196 Mass. 316, 317, 82 N. E. 21, 22, where many cases are cited. Stevens v. Rockport Granite Co., 216 Mass. 486, 493, 104 N. E. 371 (Ann. Cas. 1915B, 1054); Arnold v. Maxwell, 230 Mass. 441, 444, 119 N. E. 776;Capen v. Capen, 234 Mass. 355, 362, 125 N. E. 692;Kilkus v. Shakman, 254 Mass. 274, 278, 150 N. E. 186;Mouradian...