Leshefsky v. American Employers' Ins. Co.

• Decision Date: 04 January 1936
• Parties: REBECCA LESHEFSKY, administratrix, v. AMERICAN EMPLOYERS' INSURANCE COMPANY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

293 Mass. 164

REBECCA LESHEFSKY, administratrix, v. AMERICAN EMPLOYERS' INSURANCE COMPANY.

Supreme Judicial Court of Massachusetts, Suffolk.

January 4, 1936

February 4, 1935.

Present: RUGG, C.

J., PIERCE, FIELD DONAHUE, & QUA, JJ.

Practice, Civil Exceptions: construction of bill, what questions open, when exception lies. Bond, For payment of taxes. Mortgage, Of real estate: taxes. Damages, For breach of contract.

In a bill of exceptions the statement that certain "facts appeared" meant that they were admitted.

After hearing of an action without jury and without oral testimony upon the pleadings and admitted facts, and a general finding for the defendant, and upon the plaintiff's bill of exceptions reciting such proceedings, an exception to the finding raised the question of law whether the finding was permissible on the facts.

A surety bond running to a third mortgagee was construed to be conditioned upon a junior mortgagee's payment of overdue taxes by a certain date or upon full payment of the third mortgage; and (the third mortgage not having been paid) there was a breach upon the failure of the obligor so to pay the taxes, and in an action on the bond the obligee was entitled to recover at least nominal damages.

Forfeiture of such bond was not saved by foreclosure, after the breach of the second mortgage and purchase, subject to the taxes, by the obligee of the bond at the foreclosure sale, nor by the obligee's subsequent payment of the taxes.

In an action upon such bond, the measure of damages would be the amount, not in excess of the amount of the taxes, by which the plaintiff's security was diminished by their nonpayment.

CONTRACT. Writ in the Municipal Court of the City of Boston dated April 11 1933.

Upon removal to the Superior Court, the action was heard without jury by Donnelly, J., as described in the opinion.

N. Efron, for the plaintiff. H. L. Barrett, for the defendant.

FIELD, J. This is an action of contract brought against the surety on a bond as sole defendant for damages for breach of the bond. G.L. (Ter Ed.) c. 235, Section 13. The case was tried before a judge sitting without a jury who found generally for the defendant. The plaintiff excepted to this finding. No motion or request for a ruling of law made by either party is set forth or referred to in the bill of exceptions.

The bill of exceptions states that the "original bond was introduced in evidence at the trial, and a copy thereof is attached to the plaintiff's declaration. The pleadings are made a part of this bill of exceptions by reference and may be referred to at the argument before the Supreme Court." The bill states further that "No testimony of witnesses was taken, but in lieu thereof, the case was tried on the pleadings, the undisputed statements of counsel, admissions of fact, and certain exhibits, including said original bond on which the action was brought. From these, and the inferences to be drawn therefrom, the following facts appeared." The facts so appearing are set forth in the bill of exceptions which states that it "contains all of the evidence material to the questions raised herein."

The statement in the bill of exceptions that "the following facts appeared" must be construed "to mean that they were undisputed, or in other words that they were admitted." Neal v. Scherber, 207 Mass. 323 , 325. Compare Pye v. Faxon, 156 Mass. 471 , 473. The recital of those facts in the bill of exceptions refers to the bond in such a way that the copy thereof attached to the plaintiff's declaration must be regarded as incorporated in such recital. Apart from the admitted facts no evidence is set out in the bill of exceptions. The exception to the finding for the defendant, therefore, at most presents for decision only the question whether as matter of law on the admitted facts this finding was permissible. Moss v. Old Colony Trust Co. 246 Mass. 139 , 143. Ashapa v. Reed, 280 Mass. 514 , 516.

The defendant contends, however, (a) that the exception to the finding presents no question of law for decision and (b) that even if it does no error of law is disclosed.

1. The exception to the finding for the defendant presents for decision the question of law whether on admitted facts the finding was permissible.

Doubtless a general finding for the defendant in a case tried by a judge sitting without a jury implies a ruling that such a finding was permissible as matter of law on the evidence. But in the ordinary case of a trial on evidence an exception to a general finding is not sufficient to bring such an implied ruling before us for review. For this purpose there must be an exception to a specific ruling of law, or to the denial of a request for a specific ruling of law or of a pertinent motion. Keohane, petitioner, 179 Mass. 69, 73. Stowell v. H. P. Hood & Sons, Inc. 288 Mass. 555 , 557, and cases cited. See also Fisher v. Drew, 247 Mass. 178 , 181; New Bedford Cotton Waste Co. v. Eugen C. Andres Co. 258 Mass. 13 , 16. This requirement rests upon the principle that no exception lies to the finding of a judge on a question of fact (Ames v. McCamber, 124 Mass. 85 , 91) and that a separation of the questions of fact and of law involved therein must be made so that the question of law is brought specifically to his attention. Where, however, all material subsidiary facts have been found or are agreed, though inferences of fact may be drawn therefrom, the separation of the questions of fact and of law involved in a general finding based thereon has been largely made and a motion or a request for a specific ruling of law would serve little purpose. In such a case an exception to a general finding brings before us the question of law whether it was permissible on the subsidiary facts established. See Andrews v. Registrars of Voters of Easton, 246 Mass. 572 , 576-577. Bianco v. Ashley, 284 Mass. 20 , 26. Compare the somewhat analogous situation in the case of an appeal under G.L. (Ter. Ed.) c. 231, Section 96, from a decision on facts agreed as evidence. Frati v. Jannini, 226 Mass. 430 , 432, and cases cited.

2. The finding for the defendant was not permissible on the admitted facts.

Material facts admitted include the following: "The plaintiff, as the administratrix of the estate of Harris Leshefsky, was the holder of an unpaid third mortgage, in the principal sum of . . . $11,000 on a parcel of real estate . . . [in] Boston, Massachusetts. One Sarkis Meloian, the principal in the bond referred to, was the holder of a junior mortgage on said real estate. Prior to March 7, 1930, the bill for the tax assessed against said parcel of real estate by the city of Boston as of April 1, 1929, and amounting to . . . $1,260, had not been fully paid and a balance thereof was outstanding. The failure to fully pay said tax constituted a breach of condition of the mortgage held by the plaintiff. The plaintiff demanded that said Meloian, as holder of a junior mortgage of the said real estate, pay the balance of the 1929 real estate tax and other tax liens, or else the plaintiff would make entry, and/or foreclose the mortgage held by her. Instead, however, the plaintiff agreed to, and did, accept from said Meloian the bond referred to, dated March 7, 1930, with Meloian as principal and the defendant as surety, the pertinent condition thereof being that the said Meloian `will pay or cause to pay the outstanding real estate tax assessed as against said property hereinbefore mentioned for the year 1929 upon which there remains to be paid approximately the sum of . . . $300 together with interest and costs, which payment is to be made on or before April 20th, 1930.' The bond was also upon the further condition that `if the mortgage hereinbefore described held by the said Rebecca Leshefsky, Administratrix as aforesaid, is paid off in full,' then the obligation of the bond was to be `null and void otherwise to remain in full force and effect.' The mortgage held by the plaintiff has not been paid off in full. The balance of the real estate tax assessed as of April 1, 1929, referred to in the bond was not paid or caused to be paid by said Meloian or the defendant, either on or before April 20, 1930, or thereafter. Subsequently one Anna C. Maguire, the holder of the second mortgage on said real estate, instituted proceedings to foreclose her second mortgage under the power of sale contained therein and sold said real estate at public auction on December 20, 1930, `subject to any and all unpaid taxes, tax titles, municipal liens and assessments, if any there be.' The plaintiff purchased said real estate for . . . $500 at said second mortgagee's foreclosure sale in order to protect her interests as third mortgagee. The balance of the 1929 real estate tax not having been paid, the collector of taxes of the city of Boston caused said real estate to be sold under the tax lien for the balance of said unpaid taxes, and interest and costs, and the purchaser at said tax sale filed a petition in the Land Court on March 2, 1933, to foreclose the right of redemption from said tax title. In order to redeem said real estate from the tax title the plaintiff was obliged to, and did, pay the holder of the tax title the sum of . . . $355.81," including the balance of the 1929 tax, interest and costs. G.L. (Ter. Ed.) c. 60, Section 68. The bond describes the obligee, the plaintiff in this case, as "the holder of a mortgage," which is the mortgage referred to in the admitted facts, and recites that the "mortgagee has made demand upon the owner of the equity that certain taxes be paid upon said property."

The conditions of the bond are more fully set forth in the margin. ^[*]

The nature of the obligation of the principal obligor with reference to the real estate tax in...