Costelo v. Crowell

• Decision Date: 05 February 1883
• Citation: 134 Mass. 280
• Parties: Amelia H. Costelo v. Horace S. Crowell, administrator
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

134 Mass. 280

Amelia H. Costelo v. Horace S. Crowell, administrator

Supreme Court of Massachusetts

February 5, 1883

Argued March 15, 1882 [Syllabus Material] [Syllabus Material]

Suffolk. Contract on a promissory note for $ 3000, dated July 31 1868, signed by Thomas Corey, the defendant's intestate, payable five years after date to the order of John F. Costelo, and by him indorsed in blank. On the margin of the face of the note were these words: "Given as collateral security with agreement." Writ dated August 10, 1877.

After the former decision, reported 127 Mass. 293, sustaining the defendant's exceptions, on the ground that the instrument declared on was not a negotiable promissory note, the plaintiff moved to amend her writ, by substituting, in place of herself as party plaintiff, the following: "John F. Costelo, this action being brought in the interest and for the benefit of Amelia H. Costelo." This motion was allowed, against the defendant's exception, as was also a motion to amend the declaration by adding the following counts:

The first count was on the note originally declared on, and alleged that the action was brought in the interest and for the benefit of Amelia H. Costelo.

The second count alleged that the defendant's intestate, in consideration of the sum of $ 3000, paid to him by the plaintiff, made a contract in writing, a copy of which was annexed, (being the note originally declared on,) whereby he promised to pay to the order of the plaintiff the sum of $ 3000 in five years from July 31, 1868, and alleged a breach.

The third count was similar to the second, except that it alleged the consideration to be the sum of $ 728.11, paid by the plaintiff to the defendant's intestate, and two promissory notes of third persons, one for $ 1848.35, and the other for $ 521.85.

The fourth count alleged that, in consideration of the sum of money and the notes, as set forth in the third count, and also in consideration of a certain agreement entered into by the plaintiff, (a copy of which is printed in the margin, ^[*]) the defendant's intestate entered into a certain contract with the plaintiff, a copy of which was annexed, (being the note declared on,) by which the said intestate agreed to pay the plaintiff the sum of $ 3000, if he, the said intestate, did not perform the covenants and agreements entered into by him in the contract, a copy of which is printed in the margin on p. 281. The count then alleged a breach of these covenants and agreements.

There were also counts for money had and received, and for money lent.

Trial in the Superior Court, before Rockwell, J., who allowed a bill of exceptions, which, after setting forth the facts as to the amendment of the writ and declaration, and stating that the defendant was appointed administrator of the estate of Thomas Corey on March 7, 1876, proceeded, in substance, as follows:

The plaintiff introduced evidence tending to show that Thomas Corey was the uncle of John F. Costelo, and that they had had numerous and extended business transactions with each other, covering a period of seven or eight years; that, in June 1868, Corey had entered into a contract with one Sylvester Bucklin for the purchase of the Bucklin homestead; that, for a long time previously, Corey had been desirous and trying to buy said land, as it adjoined the homestead on which Corey lived in Marlborough; that, shortly after the making of this agreement, Corey, not having the ready money necessary, applied to John F. Costelo to advance him $ 3000 as a loan, which Costelo did, and at that time (on or about July 31, 1868) the note and agreement referred to in the plaintiff's amended declaration were executed and delivered by Corey to Costelo.

There was evidence that the land described in the agreement, a copy of which is printed in the margin on p. 281, was never sold by Corey, with the exception of about two and one half acres (upon which houses had been built), but remained a part of his estate at the time of his death, and was so inventoried, and that the defendant and his wife, a daughter of said Corey, occupy and reside upon a portion of it; that neither John F., James nor Amelia H. Costelo ever received any payments on account of said note or said agreement, nor any part of the proceeds of the sale of said two and one half acres; and that $ 4000 of the principal of the mortgage note given by Corey to Bucklin still remains unpaid, with some accumulated interest. Said mortgage and note from Corey to Bucklin bore the same date as the note declared on, and were written on the same time, namely five years.

This was all the evidence in the case material to the inquiry raised by the bill of exceptions. The defendant offered no evidence. At the close of the plaintiff's case the defendant requested the judge to rule that the action could not be maintained, for the following reasons: "1. That the plaintiff's amendments, before referred to, constituted the bringing of a new suit, and the date of the allowance of said amendments was more than two years after the appointment of the defendant as administrator. 2. That the plaintiff could not maintain an action upon the note until some breach, on Corey's part, of the agreement; and that the plaintiff's had failed to show any breach of the agreement; and that the plaintiff's remedy, if any, should properly be by a bill in equity upon said agreement, and not by an action at law upon said note."

The judge ruled that the plaintiff could not maintain this action, and directed the jury to find for the defendant. The jury returned a verdict accordingly; and the plaintiff alleged exceptions.

The case was argued at the bar in March 1882, and was reargued in January 1883.

Exceptions sustained.

H. E. Swasey & G. R. Swasey, for the plaintiff.

J. G. Abbott, (E. F. Johnson with him,) for the defendant.

OPINION

Field, J.

The court are unanimously of opinion that the amendment substituting John F. Costelo as nominal plaintiff for Amelia H. Costelo was properly allowed. Gen. Sts. c. 129, §§ 41, 82. Winch v. Hosmer, 122 Mass. 438. Buckland v. Green, 133 Mass. 421.

Without deciding, it may be assumed, as the defendant contends, that the agreement between Thomas Corey and John F. Costelo, dated July 31, 1868, created a trust in the land which John F. Costelo could enforce in equity, and that whether the relations of the parties were such as to constitute them copartners or not, John F. Costelo was entitled to an account in equity of the amount due him under this agreement after the land had been sold, and that, as, until the land was sold and this account taken, it could not certainly be known how much, if anything, of the proceeds of the enterprise would be due to him, an action at law for his share of these proceeds could not, under the facts in evidence, be maintained.

It may also be assumed that, although the instrument declared on is in form a promissory note, yet, as it was given as collateral security for the fulfilment of the agreement, and a memorandum to that effect appears upon its face, no action at law can be maintained upon it unless such an action could be maintained upon the agreement itself if the contents of this note had been inserted in the agreement. Costelo v Crowell, 127 Mass. 293. If the agreement has been fully performed, no action can be maintained on the note, but it should be surrendered to the defendant; if the agreement has not been fully performed, yet, if the damages to be recovered on the note can only be ascertained after the land has been sold and an account taken, no action at law can be maintained on the note until these things have been done. The note is called collateral security for the fulfilment of the agreement, but it is simply a promise by Corey additional to his covenants in the agreement, and collateral to them. If it were the note of another person, there would be no doubt of the right of the plaintiff to collect it, and to hold the proceeds as security for the performance of the agreement. But if a debtor gives a creditor two or more separate obligations of his own to pay the same debt, the creditor does not acquire the right of...