Gill Equipment Co. v. Freedman

• Decision Date: 01 June 1959
• Citation: Gill Equipment Co. v. Freedman, 339 Mass. 303, 158 N.E.2d 863 (Mass. 1959)
• Parties: GILL EQUIPMENT COMPANY v. Samuel J. FREEDMAN.
• Court: Supreme Judicial Court of Massachusetts

Page 863

158 N.E.2d 863

339 Mass. 303

GILL EQUIPMENT COMPANY v. Samuel J. FREEDMAN.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued April 9, 1959.

Decided June 1, 1959.

James G. Fay, Boston, Arthur L. Brown, Boston, for plaintiff.

Edward O. Proctor, Boston, Arthur J. Santry, Boston, for defendant.

Before WILKINS, C. J., and WILLIAMS, COUNIHAN, WHITTEMORE and CUTTER, JJ.

CUTTER, Justice.

This is an action of contract for money received by the defendant to the plaintiff's use. A bill of particulars, added by amendment of the declaration, showed '1. Proceeds of a check * * * of $15,000, dated January 30, 1948, drawn on The National Metropolitan Bank and payable to the defendant and Anthony J. Forte * * * $15,000. 2. Interest on Item 1 * * *' The bill of particulars was later amended, subject to the defendant's exception, by striking out the first three words 'Proceeds of a.' The defendant filed a general denial. At the pre-trial it was stipulated that the amount involved was $10,000 ¹ and interest and 'that the plaintiff does not charge the defendant * * * with fraud.' The judge of the Superior Court who heard the case without a jury found for the plaintiff for $16,193.33. The defendant's bill of exceptions presents the question of the propriety of the judge's denial of certain requests for rulings. The facts stated below could have been found by the judge upon somewhat conflicting testimony.

In January, 1948, the defendant was in Washington, D. C., trying to sell for one Forte a large, used, diesel operated, 50-ton shovel then at Silver Springs near Washington, except for certain accessories which were at Bath, New York. He met with one McKinley (an agent of the plaintiff working on a commission basis) and one Gill, president of the plaintiff, a company engaged in selling new and used construction equipment. It could have been found that the defendant told the plaintiff's representatives that he owned the shovel. Gill inspected the shovel and decided to purchase it. Two sets of contracts were drawn covering its sale, the later set by one Cragun, attorney for the plaintiff. Each contract described Forte as the owner of the shovel. The later contract named a price of $56,305 f.o.b. Silver Springs for the shovel (free of all encumbrances) exclusive of certain accessories, and stated that 'the buyer does herewith pay to the seller * * * $15,000 on account of said purchase price.' The later contract was signed on January 17 by Gill, who gave it to the defendant with a check for $15,000, payable to Forte, with instructions that the check was to be given to Forte when he signed. This was done. Payment was later stopped on the check when Forte reported that he had lost it. A second check, also payable to Forte, was then issued, on which payment also was later stopped.

At some time it was learned that the shovel was subject to a conditional sale agreement, that Forte had found the first check, and that a firm in Maryland had cashed it. The defendant asserted to Gill that Cragun had told the defendant that he would advise Gill to remove the stop order. Gill had not done this and so informed the defendant. There were discussions and telephone conferences about clearing the title to the shovel. On January 28, the plaintiff's auditor sent Cragun $15,000 in New York funds payable to Cragun as escrow agent with instructions that, when Forte had furnished a bill of lading and bill of sale for the shovel, this sum and other funds then held by Cragun were to be turned over to him. Gill testified that, on January 29, he talked with Cragun by telephone and told Cragun that 'I did not want him to release those funds * * * unless * * * [the defendant in] whom I had confidence * * * took full responsibility to give me a clear bill of sale and make delivery possible for the machine.' Cragun testified (a) that, on the evening of the 29th, the defendant had 'said he was * * * discouraged and wanted * * * Forte to be able to use some of the money to pay off the conditional sale contract'; and (b) that he (Cragun) told the defendant by telephone on the 30th that he understood that the defendant 'was willing to assume personal responsibility on the deal as a condition of getting the money,' that he (Cragun) would be allowed to pay out the deposit money 'without the clear title they had been insisting upon if defendant would assume personal responsibility,' that he had 'drawn up a receipt for the down payment on the shovel for defendant to sign as well as Forte, and had drawn a check to their joint order and that it was at his office if defendant cared to sign the receipt for the down payment.' The defendant went to Cragun's office where there was a 'minimum of discussion * * * consistent with the telephone conversation.' ² The '[d]efendant read * * * the receipt * * * and signed both his name and that Forte by him as attorney.' The receipt acknowledged delivery of a check on a Washington bank 'for * * * $15,000 as down payment on the purchase by * * * [the plaintiff]' of the shovel. The defendant received the check and asked Cragun 'if he would introduce him at the bank, that they wanted to cash' the check. Cragun and the defendant walked to the bank, where Forte joined them.

Cragun identified the defendant to a bank teller and 'identified his signature.' Both the defendant and Forte indorsed the check. Cragun's testimony as to what happened was far from definite and his recollection was admittedly vague, but from his testimony, viewed as a whole, it could have been found that the money was paid out on the counter by the teller in $100 bills when both the defendant and Forte were at the window. The defendant testified (a) that Forte took the money to a side room, counted it and said he was going to open an account in the bank with some of the money, and (b) that he (the defendant) 'did not get any part of that money and has never received anything as a result of that transaction.'

Thereafter there ensued various efforts to work out delivery of the shovel. The shovel never was located for shipment and it was learned that a bill of sale, dated January 8, 1948, of the same shovel from Forte to one Penoyer, had been recorded in Maryland. Neither the defendant nor Forte ever gave a clear bill of sale of the shovel to the plaintiff.

At the close of the arguments the defendant requested rulings (1) that there was no evidence that the defendant ever received any proceeds of the January 30 check, and (2) that in the absence of such evidence the judge must find for the defendant. Both of these requests were denied. The judge later permitted the defendant to file further requests set out in the margin ³ so far as granted or as exceptions to their denial are now pressed. In substance the judge ruled that there was evidence warranting a finding for the plaintiff, that the mere receipt of the check would support such a finding, that there was evidence that the defendant appropriated the check to his own use, and that to recover the plaintiff must prove such appropriation.

The judge's ultimate finding for the plaintiff must stand if there was evidence to warrant such a finding and if by his action on requests for rulings he correctly instructed himself as to the applicable law. Upon this record, he could find that the defendant was acting here as a broker or agent of Forte, the purported owner of the shovel; that the defendant may have represented himself as owner initially; and that he had effected a contract between the plaintiff and Forte, who claimed to be the owner or, at least, to have an interest in the shovel sufficient to authorize him to sell it. The judge would also have been warranted in finding, or in inferring from facts which he could have found, (1) that there had been confusion with respect to two deposit checks given to Forte, including the purported loss and later cashing of the first check by Forte; (2) that there had been belated revelation or discovery of the outstanding conditional sale agreement; (3) that, following these events, Cragun, the plaintiff's lawyer, and Gill, its president, undertook to give Forte and the defendant a new deposit check without getting title to the shovel; (4) that this was done to enable Forte and the defendant to go through with the transaction; and (5) that the defendant in substance agreed to assume responsibility for supervising the proper application of the check to expedite and complete the transaction, from which the defendant expected to get a commission.

The check was payable to both the defendant and Forte. A receipt for the check was required in behalf of both of them. The indorsement of both of them was necessary to cash the check or otherwise to transfer it. See G.L. c. 107, § 64 (recently repealed by St.1957, c. 765, § 2, and, under § 1, supplanted by G.L. c. 106, § 3-116); D.C.Code (1940 ed.) § 28-312. See also cases cited in annotations...