Mollahan v. McGrath

• Decision Date: 08 April 1970
• Parties: George H. MOLLAHAN v. John R. McGRATH, special administrator, et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 430

257 N.E.2d 430

357 Mass. 229

George H. MOLLAHAN v. John R. McGRATH, special administrator, et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued March 5, 1970.

Decided April 8, 1970.

Arthur E. Nicholson, Boston, for defendant, Harold Aronofsky, trustee.

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

SPALDING, Justice.

This is a bill in equity brought on June 4, 1964, in which the plaintiff seeks the delivery of a certain crawler crane, which was pledged to him as collateral to secure a certain promissory note. The case was tried on a 'stipulation of evidence.'

A summary of the pertinent stipulated evidence is as follows. The M. Aronofsky Trust (trust) was created by Morris Aronofsky under a declaration of trust dated December 29, 1942. The res of the trust was M. Aronofsky & Sons, an unincorporated business located in Boston engaged in trading used and scrap metal. Leah Aronofsky, as successor trustee to Morris Aronofsky, purportedly executed a delegation of powers on March 2, 1954, to her sons, known as Sidney Aronoff and Manuel Aranov, who then conducted the business until November 3, 1961, when Sidney died. Thereafter it was conducted by Manuel Aranov until his death on March 18, 1962. Leah, who died on May 14, 1966, at the age of eighty-three, had never taken an active part in the trust business. She, as trustee, had originally been a defendant. After her death, Harold Aronofsky, successor trustee, was substituted as a defendant.

On January 19, 1960, the trust purchased for $15,750 a 1955 unit crawler crane. On January 26, 1962, Leah, as trustee, purported to transfer title to the crane, at that time worth approximately $10,500, to Manuel for his unsecured promissory note for $4,000, payable in three years. ¹

On January 30, 1962, Manuel Aranov caused to be created Topeka Steel & Trading Co., Inc. (Topeka). The trust had no ownership interest in this corporation. On the same day Manuel negotiated with the plaintiff for the purchase of certain land with a building on it located a short distance from M. Aronofsky & Sons for $42,500. The plaintiff conveyed the property to Topeka by a deed dated February 2, 1962. The consideration for the purchase consisted of a check dated January 30, 1962, for $1,000 drawn on the account of M. Aronofsky & Sons; a promissory note of Topeka for $37,500 payable in weekly instalments secured by a mortgage on the real estate; and the proceeds, in the amount of $4,000, of a promissory note in the sum of $4,599.94 given by Manuel to the plaintiff, payable in three years from date in weekly instalments, guaranteed by Topeka. This note was secured by a duly recorded security interest in the crawler crane. The bill of sale purporting to convey title to the crane to Manuel appeared on the reverse side of the security agreement. Weekly payments on these notes were made by checks drawn on Topeka's account until July 16, 1962. Thereafter until August 1, 1962, payments were made by checks drawn on the account of M. Aronofsky & Sons, the business owned by the trust; these checks were signed by Arnold Aronoff. The total amount paid by the trust to the plaintiff was $6,543.86, which included the $1,000 payment previously referred to.

Under the terms of the notes there was a default in the payments on May 13, 1963. On May 7, 1964, a default was declared on the note secured by the crane. The plaintiff then demanded possession of the crane as he had a right to do both under the terms of the security agreement and the provisions of the Uniform Commercial Code. This demand was made upon Arnold Aronoff, 'the person then in charge of the business of the * * * (trust), which was in possession of * * * (the) crane.' Upon his refusal to deliver the crane, the...