Merrimac Chem. Co. v. Moore

• Decision Date: 26 May 1932
• Citation: 181 N.E. 219,279 Mass. 147
• Parties: MERRIMAC CHEMICAL CO. v. MOORE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

279 Mass. 147

181 N.E. 219

MERRIMAC CHEMICAL CO.

v.MOORE.

Supreme Judicial Court of Massachusetts, Suffolk.

May 26, 1932.

Appeal and Exceptions from Superior Court, Suffolk County; Alonzo R. Weed, Judge.

Action by the Merrimac Chemical Company against John J. Moore. Judgment for plaintiff, and defendant brings exceptions and appeals.

Exceptions overruled, and appeal dismissed.

T. H. Buttimer, of Boston, for appellant.

S. Macmillan, of Boston, for appellee.

RUGG, C. J.

This is an action of contract upon a written guaranty. The case was referred to an auditor, whose findings of fact were by stipulation of parties to be final. The auditor's report set forth these facts: The plaintiff, a corporation organized under the laws of this commonwealth, has been for many years engaged in the business of manufacturing and selling chemicals. The plaintiff owned all the capital stock of the Anderson Chemical Company, also organized under the laws of this commonwealth, which in 1925 took over the assets and business of a New Jersey corporation of the same name and continued to supply its customers. Thereafter the offices of the plaintiff and the Anderson Chemical Company were at 148 State street, Boston, on different floors. Some individuals were officers in both corporations. The manufacturing and shipping for the Anderson Chemical Company were done in a separate section of the plaintiff's works at Everett. The New Anderson Chemical Company in March, 1926, sent notice to the customer of the older company of the same name, including the Mellenville Product Corporation, that it had acquired the assets of the older company, that its manufacturing would thereafter be done at Everett, that it was a subsidiary of the plaintiff; and that it was prepared to give better service than ever before, as it had all the additional benefits of its parent company, the plaintiff, behind it. This information came to the defendant, who was an officer, stockholder, and the largest creditor of the Mellenville Products Corporation and interested in its affairs. By instrument dated October 1, and executed on October 15, 1926, the Anderson Chemical Company transferred its business, the right to its corporate name, and all its legally assignable assets to the plaintiff. Assets not legally assignable were to be held for the benefit of the plaintiff. No question is made as to the validity of this instrument. After its execution the Anderson Chemical Company did not manufacture or sell, although it continued to exist as a corporation. The plaintiff continued to receive orders from customers of the Anderson Chemical Company and to fill them from its Everett plant, and to manufacture goods therefor, all on its own account. The offices and office force of the Anderson Chemical Company and the manufacturing of what had formerly been its product were continued as the Anderson Division of the Merrimac Chemical Company and were carried on by the plaintiff. Although no concealment was made of these changes, they were not communicated to the defendant or as to the Mellenville Products Corporation prior to the execution of the guaranty.

On January 24, 1927, one Warren, assistant treasurer of the plaintiff and treasurer of the Anderson Chemical Company, went to the office of the defendant. His card of this tenor: ‘Merrimac Chemical Company, 148 State Street, Boston, Mass. William I. Warren, Assistant Treasurer,’ was sent to the defendant; whereupon he was admitted to the presence of the defendant, and this conversation followed: ‘Warren mentioned the account of the Mellenville Company and said that it could not go on without some payment. Moore said he had considerable money tied up in the Mellenville Company and that he did not feel like putting in any more till the difficulties it was having with the rubber company were settled. Moore then offered to give his individual guaranty of the account’ and dictated and signed it and gave it to Warren, who inspected it and went away. Although Warren asked for payment of the account, ‘at no time during the interview did he say anything about bringing suit against the Mellenville Products Corporation, or promise forbearance to sue.’ Efforts were thereafter made by the plaintiff to obtain payment of the account from both the debtor and the defendant, but no action was brought until the writ in the case at bar was sued out December 29, 1927. The instrument signed by the defendant and upon which this action is founded was in these words:

‘January 24, 1927.

‘Anderson Chemical Co. Boston, Mass.

‘Gentlemen: As far as the Mellenville Products Corporation bills to you are concerned, I will personally guarantee the payment of any amount that they owe you or which may become due whilst I am interested in the concern.

‘Yours very truly,

‘John J. Moore.’

The defendant had ample opportunity to know of the plaintiff, but apart from its relations with the Mellenville Products Corporation he had no direct dealings with it. Correspondence on printed letterheads came to the attention of the defendant from time to time, so that he learned that the plaintiff had some interest in the Anderson Chemical Company. Previously to the signing of the guaranty, the defendant had sought Warren in the offices of the Anderson Chemical Company and had found him in offices on the door of which was printed the name of the plaintiff. When called upon to comply with his guaranty, the defendant never stated orally or in writing that he declined to pay because it ran to the Anderson Chemical Company and not to the plaintiff. No goods were ordered of the plaintiff by the Mellenville Products Corporation after the execution of the guaranty, and there was no refusal by the plaintiff to ship goods to it and none were in fact so shipped. These are the findings of the auditor summarily stated. He made no finding in favor of either party. There was no motion to recommit the report. The plaintiff filed a motion that judgment be entered on the auditor's report in its favor. The defendant filed a similar motion for judgment in his favor. The motion of the plaintiff was granted. The defendant filed a bill of exceptions, which was allowed.

The case could have been sent to an auditor, under a rule that his findings of fact should be final, only by agreement of parties. The report of the auditor in these circumstances constitutes in substance by previous agreement of the parties a statement of all the ultimate facts upon which the rights of the parties are to be determined by law. It is transformed by such agreement, approved and acted on by the court, from prima facie evidence, the standing of an auditor's report under G. L. c. 221, § 56, to a stipulation as to all the facts material to the decision of the case. It becomes in effect a case stated. It is not necessary that the words ‘case stated’ appear in the record. The court looks at the essential nature of the situation without much regard to nomenclature. Daley v. Legate, 169 Mass. 257, 260, 47 N. E. 1013;Manning v. Woodlawn Cemetery Corp'n, 239 Mass. 5, 9, 131 N. E. 287;Frati v. Jannini, 226 Mass. 430, 115 N. E. 746;Old Colony Railroad v. Wilder, 137 Mass. 536;Wolbach v. Commissioner of Corporations & Taxation, 268 Mass. 365, 372, 167 N. E. 677. There is nothing inconsistent with this in Hale v. Wheeler, 264 Mass. 592, 163 N. E. 178, where it was held that such a reference to an auditor is waiver of trial by jury. The auditor's report on this record being in substance a case stated, procedure concerning it is governed by the statutes and law concerning a case presented in that way. It is provided by G. L. c. 231, § 126, that upon a case stated any court before which such case shall come ‘shall be at liberty to draw from the facts and decuments stated in the case any inferences of fact that might have been drawn therefrom at a trial, unless the parties expressly agree that no inferences shall be drawn.’ This statute was designed to relax the more strict rule previously prevailing as to procedure on consideration of a case stated, to the effect that no inferences could be drawn and that, unless as matter of law the plaintiff was entitled to prevail, judgment must be entered for the defendant. Rosenthal v. Liss, 269 Mass. 373, 169 N. E. 142;Frati v. Jannini, 226 Mass. 430, 115 N. E. 746. That statute is as applicable to a case stated arising in the circumstances here disclosed as it is to an instrument entitled a ‘case stated’ bearing the signatures of the parties. It makes no distinction between cases stated based on their origins. If parties desire to avoid the drawing of inferences from the facts reported, that may be stipulated in the agreement for reference to the auditor. Therefore, it was within the province of the trial judge to make permissible inferences from the facts stated in the report of the auditor. There was no error of law in his ruling to that effect. Standard Oil Co. of New York v. Malaguti, 269 Mass. 126, 168 N. E. 535;McClintic-Marshall Co. v. Freedman, 274 Mass. 558, 175 N. E. 55. Compare Jones v. Clark, 272 Mass. 146, 172 N. E. 250. This conclusion is not at variance with the thought embodied in expressions to the effect that the finding of facts made by an auditor under agreement that such finding shall be final stands on the same footing as the verdict of the jury. Marden v. Howard, 242 Mass. 350, 355, 136 N. E. 385;Lunn & Sweet Co. v. Wolfman, 268 Mass. 345, 349, 167 N. E. 641;Walsh v. Cornwell, 272 Mass. 555, 562, 172 N. E. 855. The finality of the findings was meant by statements of that nature; they were made without reference to G. L. c. 231, § 126, and inferences permissible from the facts thus established as a case stated. The procedure outlined in Wheeler v. Tarullo, 237 Mass. 306, 129 N. E. 610, a case arising upon an auditor's report in the usual form and without agreement that its findings of facts should be final, touching Rule 31 of the Superior Court (1915)-lat...