Lowrie v. Castle

• Decision Date: 21 June 1916
• Citation: 113 N.E. 206,225 Mass. 37
• Parties: LOWRIE v. CASTLE et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

225 Mass. 37

113 N.E. 206

LOWRIE

v.CASTLE et al.

Supreme Judicial Court of Massachusetts, Suffolk.

June 21, 1916.

Report from Superior Court, Suffolk County; W. C. Wait, Judge.

Action by William J. Lowrie against James B. Castle. Verdict for plaintiff, and case reported. Defendant's exceptions overruled, and judgment ordered for plaintiff on the verdict.

Jas. E. Cotter, of Boston, R. D. Silliman, of New York City, and Jas. W. McDonald and Jos. P. Fagan, both of Boston, for plaintiff.

Alfd. Hemenway, Sherman L. Whipple, Wm. R. Sears, and Edwin H. Abbot, Jr., all of Boston (Whipple, Sears & Ogden, of Boston, and David L. Withington, of Honolulu, Hawaii, of counsel), for defendant.

RUGG, C. J.

There were three counts in the declaration as originally filed, all in contract. The writ stated the cause of action to be in contract. Subsequently the plaintiff was allowed to amend by substituting a new third count and by adding a fourth count (later eliminated by the sustaining of a demurrer thereto without exception or appeal), and a fifth count in contract, and by inserting in the writ after the words ‘in an action of contract,’ the words ‘or tort, all counts being for one and the same cause of action.’ Still later counts sixth and seventh in tort for fraud and deceit were added against the objection of the defendants. The case then was sent to an auditor, before whom protracted hearings were had, who found that the plaintiff failed to establish any of the counts in contract and that the conversations relied on to support them did not reach a meeting of the minds and were preliminary to a contract in writing set forth in the report. After the auditor's report came in the plaintiff moved to amend in several particulars his seventh count, upon which the auditor's findings in the plaintiff's favor were based, a part of which was denied and the rest allowed, with leave to the defendants to demur or answer within a specified time. Later the plaintiff on motion was permitted further to amend count seven by stricking out so much as had been added by the last amendment so far as it had been allowed. This was all within the court's discretion, which does not appear to have been abused and which cannot be revised. Barlow v. Nelson, 157 Mass. 395, 32 N. E. 359;First National Bank of Chelsea v. Hall, 170 Mass. 526, 49 N. E. 917;Fay v. Boston & Worcester St. Ry., 196 Mass. 329, 336.82 N. E. 7.

The defendants then, but within the time limited by the court, filed a demurrer, the only present material part of which was directed to an alleged misjoinder of count seven with the counts in contract. The demurrer was allowed to be filed and was considered. This was within the discretion of the court. Each change in the count was brought about by an amendment and the defendant could plead thereto. Even though the original form of count seven was restored by the final amendment, it was within the power of the Court to permit the filing of a demurrer, on the ground that there was a misjoinder of counts, when count seven was added. Superior Court Common-Law Rules 5 and 10 of 1906; Whitney v. Hunt-Spiller Mfg. Co., 218 Mass. 318, 105 N. E. 1054. Although it is unusual to permit a demurrer to be filed under the circumstances here disclosed, it cannot be said to have been unwarranted. There had been a long trial before an experienced and able auditor, whose findings against the plaintiff on the counts in contract bore strong inherent evidence of being sound. If counts were misjoined in law, the discretion of the Court in allowing a demurrer to this point was not abused.

The demurrer rightly was sustained on the ground of misjoinder of counts. The statute prohibits the joinder of actions of contract and tort, although counts in each may be joined when it is doubtful to which division they belong with an averment that both or all are for the same cause of action. R. L. c. 173, § 6, cl. 6. The causes of action set out in the contract counts plainly sound in contract. They aver an engagement of the plaintiff as manager of a sugar plantation for periods of time there described by the persons named and a discharge contrary to the terms of the contract. The counts in tort equally clearly set out a cause of action sounding in deceit and aver that certain named persons by misrepresentations induced the plaintiff to resign his position. The groups of persons alleged to be concerned are not identical with those named in the contract counts. A breach of contract to continue the employment of a person is a different thing from fraudulently inducing him to resign by making false representations to him. If there was a breach of contract in discharging the plaintiff, there was no deceit in communicating that information to him. If he was fraudulently induced to resign his office with the corporation, it is difficult to see a breach of contract. The full trial before the auditor, with a thorough and comprehensive report by him covering the whole field, had given ample information to the plaintiff as to the ground upon which he ought to be prepared to rely.

The allowance of five days to the plaintiff within which to elect whether to proceed on the contract counts or on the tort counts, or further to amend, was not error. Of course he might have elected also to rely on his strict rights and needed no permission to do that.

The circumstance that the tort counts had been added by amendment allowed by another judge was not an adjudication upon the question of misjoinder of counts in contract and tort. The only question passed upon in allowing the amendment was whether the new counts were for the cause of action for which the action was intended to be brought. R. L. c. 173, § 121; Herlihy v. Little, 200 Mass. 284, 86 N. E. 294. Whether the declaration as amended is demurrable is a different question. The decision of the superior court judge who allowed the amendment, although binding as to the point before him (Tracy v. Boston & Northern Street Railway, 204 Mass. 13, 16, 17, 90 N. E. 416), was not conclusive as to the matter raised by the demurrer.

The case was tried to a jury on the counts in deceit. The auditor's report in the plaintiff's favor on count seven of his declaration was in evidence. The plaintiff testified at length and there were depositions and other evidence.

The pertinent facts on the merits may be summarized as follows: James B. Castle, on September 2, 1898, made an agreement to purchase 51,000 shares of stock, which was a controlling interest, in the Hawaiian Commercial & Sugar Company, a corporation owning the largest sugar plantation in the Hawaiian Islands. A few days later, at his solicitation, the plaintiff gave to him an option on his services as manager of this plantation at an annual salary of $12,000. This option was in the form of a proposition addressed by James B. Castle to the plaintiff and by him accepted. One paragraph was in these terms:

‘Second. You to have the privilege of buying of the S. N. Castle Estate or of myself, at any time within three years from October 1, 1898, five thousand shares of H. C. & S. stock at cost, to include interest at 6 per cent. per annum, it being understood that, in case of such purchase, you will dispose of other securities to pay for these as rapidly as you may be able to do so upon terms perfectly satisfactory to yourself.’

James B. Castle carried out the agreement for the purchase of the controlling interest in the stock and caused the plaintiff to be employed as manager of the corporation. No term of service for the plaintiff as manager was stated in this written contract. The plaintiff sought to have it made a stipulation in the contract that, if the Castle family lost control of the corporation, he should have a contract for five years as manager, but James B. Castle did not agree and the plaintiff waived it. The controlling interest in the stock represented by this purchase of 51,000 shares was divided in unequal shares between James B. Castle, W. R. Castle, S. N. Castle Estate (a corporation formed to manage a part of the estate of the father of James B. Castle, the stock in which was held by him and others of his father's family), Henry P. Baldwin and Samuel T. Alexander, the two latter being the leading members of the firm of Alexander & Baldwin, agents for sugar plantations with offices in Honolulu and San Francisco. These persons made an agreement to pool their interests in the stock until it was paid for in full and thereafter not to sell without first offering it to other members of the pool at the same price for which a bona fide outside offer had been made. The plaintiff exercised his option to buy 5,000 shares of the stock from the S. N. Castle Estate, binding himself at the same time not to sell except according to the terms of the pool agreement. All these arrangements were concluded before the end of 1898. The plantation was only partially developed. It was the design of the parties that the plaintiff, whose reputation was that of a highly successful manager of sugar estates, should develop this plantation to a much higher productivity and that thereby the stock of the corporation would become greatly enhanced in value. The auditor's report tends to show that the plaintiff entered upon the performance of his duties as manager with vigor and skill and caused important and extensive improvements to be made on the plantation by way of irrigation canals, railroads, the erection of new buildings and the installation of new machinery, the bringing of large additional areas of land under sugar cultivation, and otherwise. Considerable sums of money were expended for these purposes. The 5,000 shares which the plaintiff purchased were carried by James B. Castle according to their agreement of September, 1898, in the latter's name and were deposited with other securities as collateral for a loan to him of $500,000, which became payable in November, 1901. James B....