Graham v. Middleby
| Decision Date | 29 January 1913 |
| Citation | 213 Mass. 437,100 N.E. 750 |
| Parties | GRAHAM v. MIDDLEBY et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Jan 29, 1913.
Paul R. Blackmur and John B. Sullivan, both of Boston, for plaintiff.
Charles F. Choate, of Boston, for defendant Clare.
Anson M. Lyman, of Boston, for other defendants.
The exception to the refusal of the judge to allow the plaintiff to file a claim for a trial by jury cannot be sustained. That question was to be determined by the judge as a matter of discretion and is not the subject of exceptions. Bailey v. Joy, 132 Mass. 356; Vitrified Wheel Co. v. Edwards, 135 Mass. 591; Graham v. Lord, 170 Mass. 1, 48 N.E. 778; Stevens v. McDonald, 173 Mass. 382, 53 N.E. 885, 73 Am. St. Rep. 300; Thompson v. King, 173 Mass. 439, 445, 53 N.E. 910; Gallagher v. Silberstein, 182 Mass. 20, 64 N.E. 402; Dolan v. Boott Cotton Mills, 185 Mass. 576, 70 N.E. 1025; Clark v. Baker, 192 Mass. 226, 78 N.E. 455.
The question which lies at the foundation of the case is whether the defendants have the right to recoup from the sum which they are held to pay to the plaintiff the amount of the damages sustained by the Hatch Storage Battery Company in consequence of the plaintiff's failure to use reasonable diligence to preserve in good order the battery which he had bought from that company.
The amount of such damages, even if they had been liquidated, could not have been set off by these defendants against the claim of the plaintiff in an ordinary action at law, although they were merely sureties for the company. That is settled by our decisions, and we need not consider whether the courts of some other states have not laid down a different rule. Warren v. Wells, 1 Metc. 80; St. Louis Perpetual Ins. Co. v. Homer, 9 Metc. 39; Walker v. Leighton, 11 Mass. 140; Rawson v. Rawson, 105 Mass. 214, 215; Barnstable Savs. Bank v. Snow, 128 Mass. 512; Brooks v. Stackpole, 168 Mass. 537, 47 N.E. 419; Simmons v. Shaw, 172 Mass. 516, 52 N.E. 1087; McGuinness v. Kyle, 208 Mass. 443, 94 N.E. 700.
But the defendants contend that the bond upon which they are held was by its terms tied to the contracts between the plaintiff and the Hatch Company; that the claim which they set up grew out of the plaintiff's obligation under those contracts, that is, his alleged obliagtion to take at least reasonable care of the battery so as to return it in proper condition if he elected to withdraw from his contract of purchase; that accordingly the claim against him grew out of the same transaction as his purchase of the battery and so could have been made a ground of recoupment by the company if the plaintiff had sued it directly for the return of the price paid by him, as he might have done; that as the bond given by the defendants, though a different instrument, constituted in reality a part of the transaction between the plaintiff and the Hatch Company, and as the defendants have the right to make available to themselves all the securities and all the means of payment held by the plaintiff against the Hatch Company, so they also have the right to be exonerated by the Hatch Company, their principal, from their liability to the plaintiff and for that purpose to enforce, so far as necessary, all the rights of the Hatch Company against the plaintiff for their indemnity and in reduction of their liability, just as the Hatch Company might have done. And they point out that although this is an action at law and their liability upon the bond has been settled (Graham v. Middleby, 185 Mass. 349, 70 N.E. 416) upon principles of strict law, yet execution is to issue only for what is found to be 'due and payable in equity and good conscience'; R. L. c. 177, § 10; and so they insist that the question now raised is to be settled by the rules of justice and equity. Merrill v. McIntire, 13 Gray, 157; Austin v. Moore, 7 Metc. 116, 125; Hatch v. Attleborough, 97 Mass. 533, 538; Leonard v. Whitney 109 Mass. 265; Com. v. Gould, 118 Mass. 300, 307; Quinn v. Brennan, 148 Mass. 562, 20 N.E. 184; Forbes v. Ware, 172 Mass. 306, 52 N.E. 447.
There is force in the reasoning of the defendants. It was substantially applied and an equitable defense on similar grounds was sustained in Bechervaise v. Lewis, L. R. 7 C. P. 374. Some decisions made elsewhere tend more or less strongly to support it. Downer v. Dana, 17 Vt. 518; Concord v. Pillsbury, 33 N.H. 310; Hollister v. Davis, 54 Pa. 508; McHardy v. Wadsworth, 8 Mich. 349, 353; Cole v. Justice, 8 Ala. 793; Waterman v. Clark, 76 Ill. 428; Meyer v. Stookey, 3 Ill.App. 336. It may be, though that question will not be decided until it shall have arisen, that in a proper case, with proper parties before the court, where irremediable wrong otherwise would be done to a surety or to one under a merely indirect or secondary liability, we might be disposed to stretch the equitable doctrine even to the extent that here has been contended for. But the general rule unquestionably is that no one can set up a claim of recoupment by way of defense unless he could have enforced the alleged liability by a direct action thereon. Sawyer v. Wiswell, 9 Allen, 39, 42; McCarthy v. Henderson, 138 Mass. 310, 313; Thayer v. Jewett, 22 Me. 19; Kinne v. New Haven, 32 Conn. 210; Elliott v. Brady, 192 N.Y. 221, 85 N.E. 69, 18 L. R. A. (N. S.) 600, 127 Am. St. Rep. 898; Kinzie v. Riely, 100 Va. 709, 42 S.E. 872; Tully v. Excelsior Iron Works, 115 Ill. 544, 549, 550, 5 N.E. 83; Gibbony v. Wayne, 141 Ala. 300, 37 So. 436; D. M. Osborne Co. v. Bryce (C. C.) 23 F. 171. The doctrine contended for is one of equity merely, and will be applied only so far as is necessary for the proper protection of a surety and only so far as can be done without injury to the rights of others having equal or superior equities to those invoked in the special case. Coffin v. McLean, 80 N.Y. 560; Orvis v. Newell, 17 Conn. 97; Coates' Appeal, 7 Watts & S. (Pa.) 99; Eaton v. Hasty, 6 Neb. 419, 29 Am. Rep. 365; Leggett v. Humphreys, 21 How. 66, 16 L.Ed. 50; Joyce v. Cockrill, 92 F. 838, 845, 35 C. C. A. 38. It was so restricted in a state where the decisions have tended as strongly as any others to support the defendants' contention. Graff v. Kahn, 18 Ill.App. 485.
In this case, the battery in the hands of the plaintiff, even after he had exercised his option to withdraw from his contract of purchase, was in no sense a security or means of payment held by him to secure the payment for which the defendants have bound themselves. The contention of the defendants is that when he withdrew from the contract which alone gave to him or his assignee any right to hold the battery, it became his duty to surrender it to the company, at least upon demand and for a failure to do this, or for any failure to protect the battery from injury so far as it was his duty to do so, he was liable to the company. For a breach of his duty in either of these respects the company could hold him liable in a direct action against him; or, if it so elected, it may be that it could have used its claim against him as a basis of recoupment if he had sued it for the recovery of the money which he had paid to it. But it was for the company to elect which one of these courses it would adopt. Gillespie v. Torrance, 25 N.Y. 306, 82 Am. Dec. 355; Lasher v. Williamson, 55 N.Y. 619; Elliott v. Brady, 192 N.Y....
To continue reading
Request your trial