H.G. Kilbourne Co. v. Standard Stamp Affixer Co.

• Decision Date: 25 November 1913
• Citation: 216 Mass. 118,103 N.E. 469
• Parties: H. G. KILBOURNE CO. v. STANDARD STAMP AFFIXER CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

216 Mass. 118

103 N.E. 469

H. G. KILBOURNE CO. v. STANDARD STAMP AFFIXER CO.

Supreme Judicial Court of Massachusetts, Suffolk.

November 25, 1913

COUNSEL

Alex. P.

Brown and Geo. K. Woodworth, both of Boston, for appellant.

Wheaton Kittredge, of Boston, for appellee.

OPINION

RUGG C.J.

This is a suit to reach and apply property of the defendant in payment of an alleged debt in the nature of damages arising from the breach of a contract whereby the defendant agreed to act as the sole selling agent for the plaintiff for its stamp affixing machines in designated territory, with many subsidiary obligations and stipulations upon each party. The contract contains no clause liquidating the damages in the event of a breach and they are wholly undetermined. The pivotal question is whether the unascertained damages arising from the breach of an executory contract is a 'debt' within the meaning of that word as used in our R. L. c. 159 § 3, cl. 7, as amended by St. 1902, c. 544, § 23, and St 1910, c. 531, § 2. The first statute upon that subject was St. 1851, c. 206. When the word 'debt' was used at that time it hardly is conceivable that its signification could have been thought to be broad enough to include unliquidated damages like those claimed in the case at bar. Common-law forms of action existed at that time, and the action of debt as distinguished from other actions sounding in contract had not been abolished. See St. 1851, c. 233, § 1; St. 1852, c. 312, § 1. That statute was amended by St 1858, c. 34, and the two were consolidated in one of the clauses of section 2 of chapter 113 of the General Statutes, which was re-enacted in Pub. St. c. 151, § 1, cl. 11. This was amended by St. 1884, c. 285, and re-enacted in R. L. c. 159, § 3, cl. 7. St. 1902, c. 544, § 23, made corrections of form only in the clause as it appeared in the Revised Laws. Up to this point there is no significant change shedding light upon the meaning of the word 'debt.' But the phrase of St. 1910, c. 531, § 2, is different in a vital particular. It amends the pre-existing law by adding, as a part of the same clause and not as an independent enactment, a provision that suits to reach and apply shares or interests in certain corporations may be maintained 'whether the plaintiff is a creditor or not, and whether the suit is founded upon a debt or not.' The Legislature chose by the use of these words to distinguish between suits to collect a debt and all other kinds of actions, and to confine suits to reach and apply to debts alone. This manifests a decisive legislative intent that the word 'debt' in the statute as now amended is not to include all actions founded upon a contractual liability, but only debts as distinguished from mere claims for damages.

There is nothing in our decisions at variance with this latest pronouncement by the Legislature as to the meaning attached by it to the word 'debt.' On the contrary, in numerous opinions expressions are found interpreting the word 'debt' in this connection in harmony with the declaration of the Legislature of 1910 and as not broad enough to include such damages as are alleged here. The purpose of the statute is discussed at length in Pettibone v. Toledo, Cincinnati & St. Louis R. R., 148 Mass. 411, 19 N.E. 337, 1 L. R. A. 787. Speaking through Field, J., the court said at page 417 of 148 Mass., at page 339 of 19 N.E. (1 L. R. A. 787) that the Legislature had in mind what in England are called 'creditors' bills,' brought by 'creditors who have obtained judgments at law, and who have in vain attempted at law to obtain satisfaction of the judgments, and who sue in equity for the purpose of reaching property which could not be taken on execution at law.' The statute is spoken of as 'a new remedy for the collection of a debt' whereby it is not required that 'the debt should be reduced to a judgment, and that all legal remedies should be exhausted.' And at pages 418 and 419 of 148 Mass., at pages 340 and 341 of 19 N.E. (1 L. R. A. 787): 'The word 'debt,' even in its broadest signification, implies that the consideration of the obligation of the debtor has been executed on the part of the creditor, and the payment of the debt discharges the obligation. * * * No case appears in our Reports where, under this process, * * * any claim for unliquidated damages for the breach of an executory contract has been reached and applied under this procedure.' In the case at bar the consideration for the obligation of neither party in any proper sense has been executed. The complaint is that damages have accrued to the plaintiff because the defendant has prevented it from executing the consideration for the defendant's obligation. In Snyder v. Smith, 185 Mass. 58, 69 N.E. 1089, the court said: 'A bill brought under our statute is like a creditors' bill under general equity practice, though it may be brought by a single creditor for his own benefit without having obtained a judgment, and without making other creditors parties.' To the same point are Barry v. Abbot, 100 Mass. 396, and Davis v. Werden, 13 Gray, 305. In Draper v. Hollings, 163 Mass. 127, 129, 39 N.E. 793, 794, it was held that the bill could be maintained because it showed something more than 'a mere right of action for a breach of contract.'

The statute is remedial in nature and should not be given a constricted interpretation. But on the other hand it should not be stretched to cover cases not within its fair import. Doubtless the word 'debt,' as was said in Gray v. Bennett, 3 Metc. 522, 526, 'is of large import, including not only debts of record, or judgments, and debts by specialty, but also obligations arising under simple contract, to a very wide extent.' It is to be construed broadly rather than narrowly in the statute before us. Schlesinger v. Sherman, 127 Mass. 206; Wilson v. Martin-Wilson Automatic Fire-Alarm Co., 151 Mass. 515, 24 N.E. 784, 8 L. R. A. 309; Ginn v. Almy et al., 212 Mass. 486, 494, 99 N.E. 276. It may comprehend not only liquidated demands where there is an express or an implied promise to pay or an absolute duty raised by law to discharge, but also as was intimated in Woodbury v. Sparrell Print, 187 Mass. 426, 73 N.E. 547, an agreement for the payment of money which will require some calculation or determination of extraneous facts before its exact amount can be ascertained, provided the debtor has made a distinct and binding promise to pay. The plaintiff's claim in the case last cited was for loss of rent under a covenant in a...