Levinton v. Poorvu

• Decision Date: 05 February 1936
• Citation: 200 N.E. 9,293 Mass. 338
• Parties: LEVINTON v. POORVU.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

293 Mass. 338

200 N.E. 9

LEVINTON

v.POORVU.

Supreme Judicial Court of Massachusetts, Suffolk.

Feb. 5, 1936.

Exceptions from Superior Court, Suffolk County; Greenhalge, Judge.

Action of contract by Edward D. Levinton against Harris Poorvu. Verdict for defendant, and both parties bring exceptions.

Exceptions overruled.

C. J. Miller, of Boston, for plaintiff.

J. H. Devine and J. F. Groden, both of Boston, for defendant.

CROSBY, Justice.

This action of contract to recover for an alleged breach of an indemnification covenant was tried before a jury and a verdict was returned for the defendant. The case is before this court on the plaintiff's exceptions to the denial of his motion for a directed verdict, to the admission of evidence, to the denial of his requests for instructions to the jury, and also on the defendant's exception to the allowance of a motion to amend one of the plaintiff's requests for rulings.

The writing, dated April 24, 1923, upon which this action was founded, was an agreement for the purchase and sale of real estate, and contained, besides a description of the premises and the terms and conditions of sale, the following provision: ‘The Vendee hereby represents and declares that no brokers are involved in connection with this transaction and that the said Vendor is not to pay any commissionson account of this sale and agrees to hold the said Vendor harmless against all claims for commissions.’ The agreement was signed by E. Gertrude Furlong, E. D. Levinton, agent, and E. D. Levinton as the vendors, and Harris Poorvu, the vendee. The sale was consummated.

By a writ dated June 29, 1923, Sidney F. Hooper, a real estate broker, brought an action against one Max Shoolman to recover a commission for the sale of the property which was described in the above mentioned agreement, and after a trial on the merits Hooper recovered judgment, on March 14, 1927, in the sum of $6,414,67. An agreement of judgment satisfied was filed on the same date. By writ dated March 21, 1928, Shoolman brought an action against Levinton, the plaintiff in the present action, for the recovery of the amount of the judgment, together with interest and attorney's fees, alleging in his declaration that he was acting as agent for Levinton with respect to the property. The answer of Levinton consisted of a general denial and a plea of payment. Under date of April 2, 1928, Levinton sent Poorvu a letter notifying him to come in and defend the action. Poorvu received the notice on or about April 6, 1928, but did not appear personally or by attorney. While the case was pending, Poorvu brought a bill in equity, dated June 5, 1928, against Levinton and Shoolman, seeking to restrain the prosecution of the action of Shoolman against Levinton. Both defendants filed demurrers to the bill, alleging that the plaintiff had not stated any case which entitled him to relief in equity. These demurrers were sustained, according to the order on each demurrer, on the ground that the allegations in the bill did not show that the plaintiff in the equity case would be bound by any judgment obtained by Shoolman against Levinton, or that the plaintiff had sought and been refused an opportunity to defend that action. No amendment was filed to the bill of complaint and a final decree was entered on September 28, 1928, dismissing the bill. The plaintiff Poorvu appealed. By rescript from this court, filed January 8, 1929, the appeal was dismissed. It appears that the bill was finally dismissed under rule 85 of the Superior Court (1932). In the action of Shoolman against Levinton, a judgment for the plaintiff was entered on December 21, 1931, in the sum $9,059.36 including damages and costs. The execution was indorsed ‘Satisfied in full April 26, 1932,’ and filed January 15, 1935. Levinton, by writ dated April 28, 1932, brought the present action against Poorvu under the indemnity clause contained in the agreement for sale.

The defendant, called by the plaintiff, testified that on or about April 24, 1923, he signed the purchase and sale agreement; that on or about April 6, 1928, he received from counsel for the plaintiff the notice with respect to the action by Shoolman and delivered the notice to his attorney. When one is liable over to another on some claim and is duly notified of the pendency of an action involving such claim, and requested to take upon himself the defence of it, he is no longer a stranger, but is bound by the judgment because he has had the opportunity to appear and defend the action. Bowditch v. E. T. Slattery Co., 263 Mass. 496, 499, 161 N.E. 878;Genard v. Hosmer, 285 Mass. 259, 265, 189 N.E. 46, 91 A.L.R. 543;Miller v. United States Fidelity & Casualty Co. (Mass.) 197 N.E. 75. That principle, however, has no application where a judgment was obtained by fraud or collusion. Valentine v. Farnsworth, 21 Pick. 176, 182;Boston v. Worthington, 10, Gary, 496, 499, 71 Am.Dec. 678;Prichard v. Farrar, 116 Mass. 213, 220, 221;New York Central R. Co. v. William Culkeen & Sons Co., 249 Mass. 71, 77, 144 N.E. 96;Bowditch v. E. T. Slattery Co., 263 Mass. 496, 498, 161 N.E. 878. There was evidence of fraudulent collusion between Shoolman and the plaintiff Levinton. A verdict could not properly have been directed for the plaintiff.

Sidney F. Hooper, called as a witness by the defendant, testified that he acted as a broker in the sale to Poorvu; that Shoolman told him that he had the property to sell and for him to see Levinton for all the details of the property as Levinton was looking out for the property for Shoolman; that Shoolman stated the sale price to be $225,000; that the witness had several talks with Shoolman and Levinton; that Shoolman said that he would be responsible for the witness's commission; that later the witness produced Poorvu who offered $200,000 for the property, Poorvu to pay the broker's commission, and at that time Shoolman instructed Poorvu to see Levinton, who would prepare the agreements; that in the written agreement the price was stated as $203,333.33; that when Poorvu learned of this he refused to sign the agreement unless he was to be exempt from paying any broker's commission; that Shoolman said it would be all right for Poorvu to sign the agreement, that he, Shoolman, would pay the commission, and ‘that the indemnity clause agreeing to save Levinton harmless from broker's commissions was there because witness had several co-brokers who might later bring a suit for a commission and as the agreement was between Levinton and Poorvu he wanted to be sure that Levinton was protected and that witness would be paid his broker's commission by him, Shoolman’; that soon after the sale was consummated ‘witness saw Shoolman at the latter's office and requested payment of his commission and was told by Shoolman that Eddie Levinton did a lot of work in connection with the property and that he ought to receive part of the commission.’ This witness further testified that he refused to accede to this arrangement, Levinton not having taken any part in producing the purchaser.

The defendant testified that Hooper interested him in the property and that at a conference in Shoolman's office with Hooper, Shoolman, Levinton and one Gilbert, it was agreed that he, the defendant, would pay $200,000 for the property, and also the broker's commission; that Shoolman requested Levinton to draw the agreements; that the witness subsequently refused to sign the agreements when the price was raised, but later signed them after it was decided that Shoolman would pay the commission; that he then gave his check for $5,000 on account of the purchase price payable to Edward D. Levinton, which was later deposited in an account entitled ‘Edward D. Levinton, Trustee.’

Ellen G. Furlong, called by the defendant, testified ‘That she had been secretary and bookkeeper for Shoolman for several years,’ and was familiar with his books of account; that the sale of the Pratt Building was the only instance in which she acted as a ‘straw’ for Levinton; that she had acted for Shoolman as a ‘straw’ in many cases and that she could remember only one piece of property that Shoolman ever had in his own name and that was in Canada; that after the sale to Poorvu, Levinton went to Palestine, ‘and just prior to his departure she balanced his books and his trustee account on the Merchants National Bank was changed from ‘Edward D. Levinton, Trustee’ to ‘Edward D. Levinton, Max Shoolman, attorney.’' $The plaintiff, called by the defendant, testified that he was a brother-in-law of Shoolman, and that in 1923 he had an office in Shoolman's suite and still has an office there; that the three checks he received from Poorvu in connection with the sale to him were indorsed by him, and that the ‘TR’ after his name signified ‘Trust...