Morad v. Haddad

• Decision Date: 02 February 1953
• Citation: 110 N.E.2d 364,329 Mass. 730
• Parties: MORAD v. HADDAD et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 364

110 N.E.2d 364

329 Mass. 730

MORAD v. HADDAD et al.

Supreme Judicial Court of Massachusetts, Bristol.

Argued Oct. 27, 1952.

Decided Feb. 2, 1953.

Gerald P. Walsh, New Bedford, for plaintiff.

Solomon Rosenberg, New Bedford, for defendant.

Before QUA, C. J., and RONAN, WILKINS, SPALDING and WILLIAMS, JJ.

WILLIAMS, Justice.

This is a bill in equity to recover from the defendant Haddad a broker's commission alleged to have been earned by effecting the sale of the real and personal property of the defendant Wareham Auto Co., Inc., in Wareham, and to reach and apply in payment of the commission a mortgage note of the said corporation to Haddad. The case was referred to a master whose report was confirmed, and the exceptions of the defendants to the report were overruled by interlocutory decree. A final decree was entered in favor of the plaintiff. The defendants appealed from both decrees, but subsequently Wareham Auto Co., Inc., waived its appeal from the final decree.

The findings of the master are summarized as follows. The Wareham Auto Co., Inc., is a Massachusetts corporation and in January, 1951, owned a parcel of land in Wareham on which were located a combination garage and automobile showroom and eight roadside cabins. The corporation conducted an automobile sales business and operated the cabins. Of the fifty shares of its corporate stock forty-seven stood in the name of Haddad and three in the names of two employees. Haddad was the sole owner of the corporation and controlled the three shares standing in the names of the employees. He was both president and treasurer. The plaintiff Morad with two other men met Haddad at the corporation's place of business on the evening of January 11, 1951, in connection with the delivery of some liquor which Haddad had ordered. Haddad paid for the liquor with a check of the corporation. In the conversation which followed Haddad said that he desired to sell the business as he wanted to leave this part of the country. One of the men said Morad was a real estate dealer and would handle it. 'Morad asked Haddad the price he was asking, and he told Morad to ask $60,000, that he would take $50,000 and Morad would have $10,000 as a commission. He further told him [Morad] that this would include all the land and buildings, the cabins, linens used in the cabins, the automobile accessories, and the sales agency for the automobiles which he said [he] would be able to transfer to the buyer, but not the automobiles themselves--these were to be paid for 'dollar for dollar' and were to be outside the $60,000 price. Haddad told them that he owned the corporation.' He also said that he would take back a $25,000 mortgage from the purchaser at 5% interest 'but that he wanted the balance of $25,000 not to be shown in full because he was incorporated only for $5,000 * * * and therefore, there had to be a deal 'under the table' so that he would have not to pay 'a big' tax on the deal. He told Morad that he was to bring the buyer to him and that he, Haddad, would take care of the details.' Morad told Haddad, 'I have nothing to do with this, I will bring the customer to you and you fix it up yourself.' Haddad then took Morad and one of the other men 'on a tour of inspection of the premises.'

On the next day Morad brought one Joseph Baron, to whom he had said that the asking price was $60,000, to the premises and told Haddad that Baron was interested in buying the property. Morad overheard Haddad tell Baron that his asking price was $55,000 and asked Haddad what he meant by cutting the price. Haddad replied 'that he need not worry that he would get his commission just the same.' For about a month thereafter Baron conferred with Haddad almost daily 'seeking to buy the property.' Morad saw Haddad a few times 'to find out how the deal was progressing.' On March 12, 1951, Haddad 'transferred the 50 shares to Baron and his sons,' Morad not being present. Two mortgages, each in the amount of $10,000, held by a relative of Haddad, which Haddad said were on the property to protect him, were discharged and a new mortgage was given to Haddad by the corporation in the amount of $25,000 with interest at 5%. As a part of the transaction Haddad made a written agreement with the corporation signed in behalf of the latter by Baron as president and by one of his sons as treasurer in which Haddad covenanted that the real and personal property of the corporation was 'free from all encumbrances, except as enumerated,' and that 'he agreed to indemnify the corporation against all liability.' Within a few days Morad conferred with Haddad about his commission. 'At first Haddad denied that the sale had gone through, then he said that he had not received the full price that he was asking, and finally he told Morad that he had not produced Baron as a customer.'

The exact amount received by Haddad did not appear in any writing or document. When first shown the property Baron offered $45,000 to Morad but Morad declined to submit the offer as being too low. 'A few days prior to March 12, 1951, Haddad told [one] David [an attorney] that the sale was going through, that Baron was to give him a $25,000 mortgage but that before the parties went to the attorney's office for the closing of the sale, Baron would have to give him $25,000 at his place of business. After the sale was consummated Morad told Haddad that he understood that he had sold the property for $50,000. Haddad did not deny this figure but became evasive and started to complain about the price he had received for the automobiles * * *.' At the hearing before the master a son of Joseph Baron, who is one of the present stockholders and an attorney at law, 'declined to give the exact purchase price on the grounds of the attorney-client privilege.' Joseph Baron was 'evasive.' He testified that the price was less than $50,000 but said 'that he could not remember' whether it was more than $45,000.

The master's ultimate findings based on his...