Dome Realty Co. v. Cohen

• Decision Date: 28 February 1935
• Citation: 194 N.E. 679,290 Mass. 36
• Parties: DOME REALTY CO. v. COHEN et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

290 Mass. 36

194 N.E. 679

DOME REALTY CO. v. COHEN et al.

Supreme Judicial Court of Massachusetts, Suffolk.

February 28, 1935

Suit in equity by the receiver of the Dome Realth Company against Abraham Cohen and another. From a final decree dismissing the bill, plaintiff appeals.

Affirmed.

Appeal from Superior Court, Suffolk County; Walsh, Judge.

H. P L. Partridge, of Boston, for appellant.

W Hartstone, of Boston, for appellees.

PIERCE, Justice.

This is a suit in equity brought by the receiver of the plaintiff to recover funds transferred to the defendant, which funds it is alleged, belonged to the plaintiff. The suit originally included Hayden, Stone and Company as a party defendant. After the bringing of the suit the plaintiff discontinued as to said Hayden, Stone and Company.

The bill of complaint charged that one of the officers of the plaintiff transferred to the defendant, Abraham Cohen, funds belonging to the plaintiff; that said transfers were unauthorized and were either without consideration or for purposes other than the payment of obligations of the plaintiff and known to be such by the defendant. The defendant's amended answer denied the allegation that an officer of the plaintiff transferred to him funds belonging to the plaintiff and specially answered that if ‘ he received any checks drawn on the funds of the Dome Realty Company, the same were received in exchange for his checks given by this defendant to Samuel Rottenberg.’ The answer contained another paragraph which is not material to the issue.

The trial judge found the following facts: The plaintiff was a corporation organized, in 1928, to acquire certain real estate and to erect buildings thereon. One Samuel Rottenberg and his wife held all the beneficial interest in the stock and Rottenberg was in complete control of the corporation and its business. The buildings were completed and the corporation derived certain income from the rentals. Rottenberg was also engaged in real estate transactions on his own account. On October 23, 1929, he opened an account in the Brookline Trust Company under the name of Morris Snyder, who was the husband of his wife's sister. In this account deposits were made on October 23, 1929, and October 26, 1929, approximating $4,900, which do not appear to have been assets of the plaintiff. Thereafter, at a time which does not clearly appear from the evidence, Rottenberg began to use this account as a depositary for corporate funds accruing from rentals, and from time to time during a considerable period not definitely determined by the evidence, rentals were deposited in this account during the same time certain deposits were made by Rottenberg of funds which do not appear to have been derived from rentals. At some period the deposits and withdrawals were incorporated into the books of the Dome Realty Company. Deposits which were not derived from rentals were treated by the corporation accountant for convenience in bookkeeping as exchanges, and apparently the deposits and withdrawals were balanced on the books where possible. Such deposits of this character as were allowed to remain for a considerable period without corresponding or identifiable withdrawals were treated by the accountant as loans to the company.

The defendant is a dealer in real estate. He has had some business relations with Rottenberg in the course of which checks were exchanged, so far as the evidence shows, for mutual convenience, and not as loans bearing interest. On or about March 24, 1930, the defendant drew several checks. One of these, in the sum of $5,000, was dated March 24, 1930, and the others were drawn upon subsequent dates. On March 24 1930, a check for $3,256.50 was drawn by Morris Snyder to himself; it was indorsed by him and subsequently delivered by Rottenberg to the defendant. This is the check which the plaintiff alleges represented funds of the Dome Realty Company ‘ that were transferred to the defendant Cohen without authority or consideration...