McCarthy v. Rogers

Decision Date09 September 1936
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

Suit in equity by Mary A. McCarthy against F. Harold Tolman and others. The named defendant having died pending the suit William C. Rogers, administrator, was substituted as a defendant. From adverse interlocutory and final decrees plaintiff appeals.

Decrees affirmed.

Appeal from Superior Court, Plymouth County; Donahue, Judge.

W. C Rogers and B. Berenson, both of Boston, for appellant.

H. W. Ogden, of Boston, and H. K. Stone, of Brockton, for appellee.

QUA Justice.

This bill in equity was originally brought against F. Harold Tolman to establish a debt due from him to the plaintiff for money lent and to reach and apply in payment thereof stock owned by Tolman in the defendant corporations.

A temporary restraining order was granted forbidding transfer of the stock, and thereafter a stipulation was filed and ‘ allowed’ by the court wherein the defendant F. Harold Tolman agreed not to transfer or encumber the stock until the stipulation should be modified by the court or until a new stipulation should be entered. Still later the court appointed a receiver for the stock, the decree requiring said Tolman ‘ to transfer legal title thereof to said receiver’ and authorizing the receiver to exercise the voting power of the stock. There was no appeal from this decree, and its propriety is not in question. For the purposes of this decision it may be assumed that the delivery by Tolman to the receiver of stock certificates in compliance with this decree did transfer to the receiver legal title to the stock. The cause was referred to a master. Before the report was filed F. Harold Tolman died. His executrix appeared, and upon motion by her, the court decreed that the death of Tolman had dissolved ‘ the equitable attachment upon said shares of stock’ and that the receiver return the certificates to the executrix ‘ to be administered in due course of law,’ and discharged the receiver. Thereafter the master's report was filed and confirmed, and the case proceeded to a final decree establishing the debt due from Tolman's estate to the plaintiff, but making no provision for applying the stock to its payment. From the interlocutory and final decrees last herein mentioned the plaintiff appeals. The estate has been represented insolvent, and commissioners have been appointed by the probate court.

The decisive question presented and argued is whether the death of the principal defendant, F. Harold Tolman, during the pendency of the suit ended the right of the plaintiff to have the stock applied to the payment of her claim against him.

This suit is prosecuted solely under G.L.(Ter.Ed.) c. 214, § 3, cl. 8. Such a suit is not a creditor's bill under general principles of equity jurisdiction. It is purely a statutory proceeding. Stockbridge v. Mixer, 215 Mass. 415, 102 N.E. 646; Todd v. Pearce (Mass.) 197 N.E. 156. Like proceedings under clause 7 of the same section, it is designed to enable a plaintiff to subject to the satisfaction of his particular claim without reference to the claims of others specific property of the defendant which cannot be reached to be attached or taken on execution in an action at law. Accordingly the more recent decisions hold, and it must now be deemed to be established, that when a plaintiff in such a suit has obtained a temporary injunction preventing assignment of the property by the defendant debtor, he has acquired an equitable lien upon it, which is good as against other creditors and which is entitled to recognition in bankruptcy proceedings. Snyder v. Smith, 185 Mass. 58, 69 N.E. 1089; Gay v. Ray, 195 Mass. 8, 15, 80 N.E. 693; Rioux v. Cronin, 222 Mass. 131, 137, 109 N.E. 898. Earlier decisions possibly tending toward a contrary conclusion were examine and distinguished in Snyder v. Smith, supra. G.L.(Ter.Ed.) c. 223, § 116, provides that ‘ An attachment of real or personal property shall be dissolved if the debtor dies before it is taken or seized on execution and administration of his estate is granted in the commonwealth upon an application therefor made within one year after his decease.’ It is, however, further therein provided that no attachment shall be dissolved upon property ‘ which the debtor had alienated before his decease.’ The question then is whether the lien which the plaintiff secured by her restraining order and which was continued in effect by the stipulation approved by the court and by the receivership was an attachment or so far partook of the nature of an attachment that it was dissolved and not preserved in consequence of said section 116. This precise question has not hitherto been decided. Many considerations both theoretical and practical seem to require an affirmative answer.

At the outset it should be noted that the statute under which this suit is prosecuted creates no substantive rights. In its relation to specific property it merely provides means for the application of assets of a debtor to the satisfaction of claims whose origin is elsewhere. Its function in this aspect is wholly procedural or adjective in character. In this fundamental regard suits under the statute bear a strong resemblance to the various forms of attachment. They are closely akin to ordinary attachments by trustee process. Crompton v. Anthony, 13 Allen, 33, 37. This similarity has been observed in a number of decisions. Thus in Maxwell v. Cochran, 136 Mass. 73, it was held that a statute which in terms forbade attachment by nonresident plaintiffs of property of a debtor acquired after notice of the warrant in insolvency proceedings forbade likewise the bringing of a bill to reach and...

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