Kilkus v. Shakman

• Citation: 254 Mass. 274,150 N.E. 186
• Parties: KILKUS v. SHAKMAN et al.
• Decision Date: 06 January 1926
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

254 Mass. 274

150 N.E. 186

KILKUS

v.SHAKMAN et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Jan. 6, 1926.

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

Suit in equity by Kanstantas Kilkus against Clement K. Shakman and others for damages for fraud of defendant named and defendant Thaddeus K. Kristy, in inducing plaintiff not to record a chattel mortgage and to restrain defendant Shakman from further incumbering or disposing of property and defendant Kristy from disposing of a chattel mortgage and defendant Peter K. Wychunas as assignee from foreclosing chattel mortgage. From final decree ordering the receivers to make distribution out of funds in their possession, defendant Thaddeus K. Kristy appeals. Affirmed.

E. M. Dangel and J. J. Enright, both of Boston, for appellant kristy.

C. G. Willard, of Brockton, for Wychunas.

RUGG, C. J.

This is a suit in equity wherein the plaintiff, the holder of a first but unrecorded mortgage securing an indebtedness, given by the defendant Shakman on certain automobiles, seeks to restrain Shakman from further encumbering or disposing of the property, to restrain the defendant Kristy from disposing of a subsequent mortgage on the same property given to him and by him assigned as security for indebtedness to the defendant Wychunas, to restrain Wychunas from foreclosing the mortgage, and for recovery of damages suffered by the plaintiff through alleged frauds of the defendants, and for other relief.

The case was referred to a master, who has made a full report of all the facts. Since the evidence is not reported, these findings must be accepted as final and treated as true. Glover v. Waltham Laundry Co., 235 Mass. 330, 334, 127 N. E. 420.

The facts are that, the plaintiff having advanced certain money to three persons of whom the defendant Shakman was one, for the purpose of buying a number of automobiles for resale, the interested parties, after some of the automobiles had been sold, met at an attorney's office on December 28, 1921, for conference and adjustment of their interests. As the result of a full understanding, the other two joint owners of the automobiles executed a bill of sale of their shares to the defendant Shakman, who at the same time executed and delivered a note for the amount due to the plaintiff, and as security therefor a mortgage on the property, being then twenty-nine automobiles. At the same time an agreement between Shakman and the plaintiff was executed stating the terms upon which Shakman was to retain possession of the automobiles, sell them and account for the proceeds to the plaintiff. The attorney advised the plaintiff to record his mortgage, but Shakman protested and, after discussion and in reliance on Shakman's good faith and honesty and on the statement of the attorney that it could be recorded later, the plaintiff refrained from recording the mortgage at that time. Shakman was at this time in partnership with the defendant Kristy in carrying on a public garage, where the automobiles were stored pending their sale. The terms of the settlement, the contents of the several instruments executed and the agreement as to the sale of the automobiles, were communicated immediately to Kristy. Two months later, on February 27, 1922, Kristy retired from his partnership with Shakman, transferring to the latter all his interest therein, enumerating the automobiles described in the plaintiff's mortgage as the principal asset, for the stated consideration of $14,000. In payment therefor Shakman executed a mortgage on the personal property, including the same automobiles, which was recorded the same day. It was payable, not at a time certain but from the sales of the automobiles as and when made by Shakman. The master finds that the title to the twenty-nine automobiles was not in the firm of Shakman and Kristy, but that title stood in the name of Shakman for purposes of sale. Kristy later assigned his mortgage to the defendant Wychunas, who advanced $3,000 on it as security without knowledge of the plaintiff's prior mortgage on the same property. The plaintiff called at the garage occupied by Shakman and Kristy from time to time and usually saw Kristy, and at least once referred to his mortgage and his anxiety concerning it. Kristy assured him it would be all right and that Shakman would do nothing to injure the plaintiff, but in no way did he refer to his own mortgage. Shakman and Kristy sold some of the automobiles and failed to account with the plaintiff according to the agreement. As soon as the plaintiff knew of this, the plaintiff on June 9, 1922, had his mortgage recorded.

The master found as conclusions from the other facts, (1) that the plaintiff was fraududently induced by Shakman and Kristy to forego the recording of his mortgage, (2) that the mortgage from Shakman to Kristy was made and was assigned to Wychunas with knowledge on the part of both Shakman and Kristy of the existence of the plaintiff's prior mortgage, in violation of his rights and with intent to defraud him, (3) that Wychunas was an innocent party and not engaged in a conspiracy to defraud the plaintiff, and (4) that Shackman and Kristy owe the plaintiff $12,850.

[2] The defendant Kristy filed requests and motion to the master to report some of the evidence. The rule to the master did not require him to report the evidence. Hence it would have been irregular for him to report evidence at the request of either party. The requests and motion were denied rightly by the master. Smith v. Lloyd, 224 Mass. 173, 174, 112 N. E. 615;Ananian v. Melkon, 230 Mass. 322, 325, 119 N. E. 767.

[3] The defendant Kristy filed two objections to the master's report, which are appended thereto as required by Equity Rule 31 (1905) then in force. He then filed two exceptions, neither of which related to or was founded upon the objections.This was not in conformity to Equity Rules 31 and 32 (1905). Therefore, neither the objections nor the exceptions can be considered. Smedley v. Johnson, 196 Mass. 316, 317, 82 N. E. 21;Goodwin v. Cosmopolitan Trust Co., 248 Mass. 146, 150, 142 N. E. 775.

[4] The denial of the motion to recommit the report to the master for inclusion of certain evidence presents no question of law. Its disposition rested in the sound discretion of the court. Henderson v. Foster, 182 Mass. 447, 65 N. E. 810. It follows that the interlocutory decree overruling the exceptions to the master's report and confirming the report must be affirmed.

[5] The defendant Kristy appealed from the final decree entered in favor of the plaintiff. On such an appeal it is open to Kristy to contend that the final decree is not warranted by the frame of the bill or by the facts set forth in the master's report. His arguments on those...