Grise v. White

• Decision Date: 02 December 1966
• Parties: Lionel A. GRISE, Jr. v. Francis H. WHITE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 874

221 N.E.2d 874

351 Mass. 427

Lionel A. GRISE, Jr. v. Francis H. WHITE.

Supreme Judicial Court of Massachusetts, Norfolk.

Argued Oct. 7, 1966.

Decided Dec. 2, 1966.

Stuart DeBard, Boston, for plaintiff.

Allen Goodman, Boston, for defendant.

Waldo Noyes, Boston, for trustee.

Before WILKINS, C.J., and SPALDING, WHITTEMORE, CUTTER, KIRK, SPIEGEL and REARDON, JJ.

WHITTEMORE, Justice.

A special precept attaching the defendant White's funds in the hands of Universal Underwriters Insurance Company (Insurance Company) was served on May 29, 1964. The trustee answered '(n)o funds' and was discharged on its motion on July 7, 1965. The discharge was based on the trustee's answers to interrogatories and 'certain statements the substance of which is * * * set forth' in the plaintiff's bill of exceptions.

At the time of the attachment there was pending a suit for an accounting and damages brought by White against Insurance Company and another corporation which we designate, in accordance with the bill of exceptions, as Universal Underwriters. A final decree in that suit, entered on April 5, 1963, awarded to White against Insurance Company $7,500 and interest, a total of $8,747.50. The decree was reversed in this court on appeal on April 21, 1964, because of errors in the accounting between White and Universal Underwriters. The rescript, however, did not relate to the award against Insurance Company except in an aspect noted below. In October, 1964, White, Insurance Company and Universal Underwriters agreed in the accounting suit that the latter two would pay White $30,000 upon the filing of appropriate documents to end the litigation. On October 29, 1964, Insurance Company and Universal Underwriters filed a bill in equity to interplead various claimants to the $30,000 settlement sum including the present plaintiff. So far as appears the interpleader suit is pending and the $30,000 has not been paid.

1. The rescript of this court in the accounting suit (White v. Universal Underwriters Insurance Co., 347 Mass. 367, 384, 197 N.E.2d 868, 877) in so far as it dealt with the debt from Insurance Company to white did not make that debt at the time of service of the trustee process subject to a contingency under G.L. c. 246, § 32, Fourth. The rescript reflected the following provision of the opinion: 'Universal (Underwriters) and Insurance Company do not press their appeal as to * * * (the award of $7,500 and interest) provided the decree stays levy of execution pending White's paying whatever is found due Universal (Underwriters). We see no error in the decree in this aspect. The relationship between Universal (Underwriters) and Insurance Company is to be determined on remand, and if, in the light thereof, the judge in the Superior Court shall deem the requested stay reasonable, suitable provision therefor may be included in the decree.' This did not give Universal Underwriters any right to the amount due White from Insurance Company or lessen Insurance Company's legal obligation to pay it. The instruction was permissive in terms; the stay requested might be made if the court below deemed it reasonable. This permission could not affect the validity of an attachment of the fund in Insurance Company's hands made before the Superior Court had acted under the rescript. There is nothing in the suggestion that Insurance Company and Universal Underwriters had given valuable consideration for an equitable assignment of the fund in consideration of waiving their appeal. The wording of the opinion shows that a basis for the stay, if any, remained to be determined on facts to be ascertained.

2. The trustee attachment was not defeated by a right of set-off ¹ in Insurance Company. On December 20, 1962, Universal Underwriters assigned to Insurance Company all of Universal Underwriters' 'right, title and interest in and to any judgments and/or recoveries of any sort which (Universal Underwriters) may obtain in its favor against said White' in the accounting suit and in another suit. Inasmuch as the decree awarding White a substantial recovery against Universal Underwriters had been reversed, the possibility existed that on a restatement of the account the net balance would be found to be due from White. The assignment to Insurance Company would, we assume, entitle it to set off such an indebtedness from White against its own indebtedness to him. Smith v. Stearns, 19 Pick. 20, 23--24; Lannan v. Walter, 149 Mass. 14, 20 N.E. 196. Whether a set-off would occur was not known at the time of the trustee attachment. This, however, did not make Insurance Company's obligation to White subject to a contingency under c. 246, § 32, Fourth. Smith v. Stearns, supra, illustrates the converse situation, holding that a trustee may set off a judgment rendered after service of the trustee process on a demand existing at the time of serivce. Shaw, C.J., said: 'It has been argued that the trustee's liability must depend upon the state of facts, as it existed when the trustee process was served. This is not strictly correct. Some liability must exist at that time, in order to charge him, but that liability may be greatly modified and even discharged, by subsequent events. Suppose one indebted to the principal, is summoned as trustee, but he has various liens upon the fund, as for instance, to indemnify himself against suretyships and liabilities for the principal. These liabilities may all be discharged and thus leave the fund subject to the attachment; of they may be enforced in whole or in part, and then the trustee will have a clear right to deduct from the fund the amount paid by him, in pursuance of liabilities which existed at the time of the service, and thus the fund may be diminished, or even wholly absorbed.' As it has turned out nothing is due from White and hence there is nothing...