Manganaro v. DeSanctis

• Decision Date: 10 June 1966
• Citation: 351 Mass. 107,217 N.E.2d 760
• Parties: John MANGANARO et al. v. Louis R. DeSANCTIS. (and a companion case 1 ).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 760

217 N.E.2d 760

351 Mass. 107

John MANGANARO et al. v. Louis R. DeSANCTIS. (and a companion case ¹).

Supreme Judicial Court of Massachusetts, Suffolk.

Argued May 4, 1966.

Decided June 10, 1966.

Francis E. Dooley, Jr., Boston (Brian J. Moran, Boston, with him) for defendant.

Francis H. Farrell, Boston, (Irwin Springer, Boston, with him) for plaintiffs.

Before WILKINS, C.J., and SPALDING, WHITTEMORE, KIRK, and REARDON, JJ.

WHITTEMORE, Justice.

Three cases that were related to a partnership known as Manganaro Brothers, and its business, were referred to the same master. Appeals by Louis R. DeSanctis, the defendant in two of the cases, bring those two cases before us for review. The plaintiffs in one of those cases have also appealed from the disallowance of counsel fees.

John and Leo Manganaro, brothers, and DeSanctis executed a formal partnership agreement under the name of Manganaro Brothers dated December 2, 1950. DeSanctis in late 1949 or 1950 had joined the brothers in their lathing and plastering business as the partner to be in charge of financing and accounting. He was to assist in expansion plans, furnish a line of credit and money to meet payrolls, and keep the books and records in a building where he conducted other businesses. The partnership business continued until the summer or fall of 1955, when, due to defalcations and breaches of duty of DeSanctis, it became insolvent and at that time ceased to do business except for the completion of several outstanding contracts. The brothers on December 1, 1955, brought a bill for dissolution and an accounting and the appointment of a receiver. A receiver was appointed and in due course he brought against DeSanctis a suit for the recovery of sums due the partnership. The final decree in that proceeding adjudged due $13,099.50 with interest to date of decree, a total of $20,844.57. The final decree in the proceeding for an accounting adjudged due to John Manganaro, $35,009.03 with interest, a total of $55,708.07; and to Leo Manganaro, $36,209.39 with interest, a total of $57,618.22.

THE RECEIVERSHIP CASE.

In 1955 Manganaro Brothers had subcontracts for lathing and plastering on two jobs in Boston, one at the Boston State Hospital and the other at the Dorchester School. Prior to the making of these subcontracts, DeSanctis had begun doing a lathing and plastering business as Acme Lathing and Plastering Co. (Acme). On November 4, 1955, he borrowed $11,000 from the Malden Trust Company in the name of Manganaro Brothers pledging partnership accounts in the amount of $15,081.30. '(T)his $11,000.00 was used to finance the work, that is labor and materials, at the Boston State Hospital job, which job was, after December 12, 1955, finished by * * * DeSanctis d/b/a Acme * * *, and * * * he received all the proceeds from this contract.' The obligation to the bank was paid by the pledged collateral. DeSanctis, on the hospital job used, and claimed as the property of Acme, material and equipment of Manganaro Brothers of the value of $1,835.50, and on the school job used and retained as his own partnership property of the value of $266.

These findings support the decree. Nothing required recommittal for further findings. It was not necessary that the master find explicitly that the $11,000, or part of it, was not used to pay partnership debts on the hospital job. Nor was the master required to include in his subsidiary facts 'circumstances' of the stopping of the work, the finishing of the work by Acme, or the borrowing of the money. He was not required to state how creditors were defrauded. The master's concluding finding for $13,099.50 with interest is, we think, based on the supportable construction that in using the $11,000 for labor and materials on the hospital job, which he thereafter took over as his own, DeSanctis used the entire sum for his own purposes. Alternatively, we assume, the receiver could have proceeded for an accounting for the proceeds of the contract and a crediting and charging of all appropriate underlying items. The was not required to do this and the master's express findings, with appropriate inferences, support the award as the recovery of partnership money taken for the defendant's own use.

THE BILL FOR AN ACCOUNTING.

1. The master found that '(p)rior to entering into the partnership agreement, and at or about the time the agreement was being executed, * * * (DeSanctis) agreed that he would sell the partnership from Day Square Builders Supply Co. (his own unincorporated business) the lathing and plastering materials required at a price equal to ten percent * * * less than a company of the size, type and kind of Manganaro Brothers could purchase * * * (such material) elsewhere * * *.' A substantial part of the awards to the brothers is based on breaches of this agreement. DeSanctis earnestly objects that this allows recovery on a cause not pleaded and on evidence barred by the parol evidence rule. We disagree. The bill alleged that the defendant 'for his own personal advantage' had been 'depleting the assets of the partnership by charging the partnership excessive and unreasonable amounts for said goods and materials' and had made 'unconscionable and secret profits * * * in furnishing (to it) goods and materials.' This plainly put in issue the propriety of DeSanctis's charges for any materials sold. The propriety of the charges was to be determined in the light of the agreement as to what they should be. The agreement as to price of goods sold was not of...