Marotta v. American Surety Co.

• Decision Date: 23 March 1933
• Docket Number: No. 2647.,2647.
• Citation: 64 F.2d 77
• Parties: MAROTTA v. AMERICAN SURETY CO. OF NEW YORK.
• Court: U.S. Court of Appeals — First Circuit

64 F.2d 77 (1933)

MAROTTA v. AMERICAN SURETY CO. OF NEW YORK.

No. 2647.

Circuit Court of Appeals, First Circuit.

March 23, 1933.

Harry Le Baron Sampson, Philip R. White and Hutchins & Wheeler, all of Boston, Mass., for appellee American Surety Co.

George I. Cohen, of Boston, Mass., for appellant Marotta.

Before BINGHAM, WILSON, and MORTON, Circuit Judges.

SCOTT WILSON, Circuit Judge.

A petition in bankruptcy was filed in the District Court of Massachusetts against the appellant by the appellee, alleging less than twelve creditors. The appellant appeared and filed an answer denying that she was insolvent or that the appellee was a creditor. The case was then referred to a special master to ascertain and report facts on the question of adjudication.

The facts which led up to the filing of the petition are as follows: In the spring of 1927, one Mario Mogliani of Providence, R. I., proposed to give an exhibition of fireworks in the city of Everett, Mass. In order to do so, by the statutes of Massachusetts, G. L. c. 148, §§ 57C and 57D as added by St. 1921, c. 500, he was required to file a bond with the state treasurer of Massachusetts and running to that official, with surety or sureties approved by that official. He filed such a bond in which he as principal and the American Surety Company of New York as surety "jointly and severally" bound themselves in the penal sum of $15,000 conditioned upon the payment of any judgment obtained against him by reason of any loss or damages resulting to persons or property from discharging or displaying fireworks at a public exhibition.

To obtain such a bond Mogliani sent an agent to the husband of the appellant, and, as a result of a conference with him, the appellant and her husband went with the agent of Mogliani to an attorney in Boston, where the appellant and Mogliani signed an application for a so-called "fireworks bond" to be executed by Mogliani as principal and the appellee as surety, under which application the appellant agreed to indemnify the appellee against any claim or liability arising out of the execution of such "fireworks bond."

At the time of signing the application the appellant signed a statement of her financial condition, showing assets as follows: Cash, $8,000; land and improvements, $75,000, subject to mortgages of $32,000; and additional real estate of the value of $15,500.

A form of bond provided by the statutes of Massachusetts was executed by the appellee under seal, as surety, with the date and the space for the signature of the principal left blank. It was executed by the surety with the understanding that it was later to be executed by the principal and the proper date of its execution by him inserted. The execution by the principal was afterward done in Rhode Island in the presence of a duly authorized agent of the appellee, but no wax wafer or "sticker" was attached to the instrument as the seal of the principal, the omission being accounted for by the fact that a seal in the form of a wax wafer or "sticker" was not essential to the validity of a bond in the state of Rhode Island, when the word "seal," as in this instance, was printed on the instrument opposite the signer's name. The instrument therefore was delivered by the appellee with full knowledge that no seal of the principal was attached, but intending to be bound by it in its then condition. At the time of the execution of this instrument, a wax wafer, "sticker," or impress was necessary to constitute a bond in the state of Massachusetts.

The master also found that the instrument was intended by the principal as a valid instrument and was forwarded by him to the state treasurer of Massachusetts as a compliance with the statute, and intending to be bound thereby. Some question arose before the master as to when the bond was filed, but the master found on the evidence that it was filed before the exhibition was given, and we think it cannot be said his finding in this particular was not warranted upon the evidence.

In September, 1927, an exhibition of fireworks was given by Mogliani in the city of Everett, and an injury to a spectator resulted.

In February, 1928, the appellant conveyed one parcel of the real estate standing in her name to her husband, but the master found that this conveyance was not made to hinder, delay, or defraud creditors. While it was done after the bond was executed, she was not then insolvent, and the master evidently found it was not made in contemplation of any liability resulting from the accident and there was left apparently abundant property standing in her name to make good any liability resulting from her agreement of indemnity. This finding must stand.

In April, 1928, the person injured at the exhibition in Everett brought an action of tort in the Massachusetts superior court against Mogliani, and the husband of the appellant was notified of the pendency of the action and of a possible liability resulting to the appellant. A verdict was recovered against Mogliani on March 4, 1930, for $10,000.

During the pendency of the suit, her husband consulted counsel in relation thereto, and after judgment sent counsel to Rhode Island to investigate the facts, who, on his return, advised the filing of a motion for a new trial on the ground that the verdict was excessive. Such a motion was filed, and on March 29, 1930, a new trial was granted, unless a remittitur for $3,500 was filed by the plaintiff. This was done, and judgment was entered for the plaintiff for $6,540.08, with costs taxed at $110.40, and execution was issued.

In the meantime on March 15, 1930, the husband of the appellant consulted another lawyer, who apparently was not advised of the...