Pearson v. Mulloney

Decision Date25 February 1935
Citation194 N.E. 458,289 Mass. 508
PartiesPEARSON v. MULLONEY et al.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

Suit in equity by Herbert Pearson, receiver of the Federal National Bank of Boston, against Lawrence E. Mulloney and others, in which the Inman Trust Company, in possession of Arthur Guy, Commissioner of Banks of the Commonwealth intervened. From interlocutory decrees denying plaintiff's motion to recommit the master's report overruling his exceptions to the master's report confirming the report making the receiver a party defendant to the intervening petition, and overruling the demurrer to the intervening petition, and from the final decree establishing the mortgage of intervener as superior to any right of the Federal National Bank of Boston or its receiver and restraining individual defendants from interfering with the rights of the intervener, plaintiff appeals.

Interlocutory decrees affirmed; final decree reversed, with directions.

Appeal from Superior Court, Suffolk County; Pinanski, Judge.

J. C. Coughlin, H. Parkman, Jr., and W. M. Marvel, all of Boston, for appellant.

L. Brown, H. P. Moulton, and C. W. Mulcahy, all of Boston, for appellees.

LUMMUS, Justice.

The plaintiff, as receiver of Federal National Bank of Boston by appointment of the Comptroller of the Currency, brought this suit on September 9, 1932, to enforce the rights of said bank in an apartment house which the bank had bought on foreclosure sale and had conveyed to the defendant Gallagher on February 1, 1930, taking back a first mortgage for $180,000. On December 28, 1932, Inman Trust Company, in possession of Arthur Guy, commissioner of banks of the commonwealth, by leave of court filed an intervening petition in the suit to set up the rights of the trust company under a second mortgage for $25,730 upon the same premises, given to it by Gallagher on February 1, 1930. The plaintiff demurred to the intervening petition, and the judge ordered the hearing on the demurrer postponed until the hearing on the merits. This was within his discretion. Although relief can be given in equity only within the scope of the pleadings, a party has no right to insist that the determination of the facts be delayed until the pleadings shall have been perfected. In its discretion, sometimes exercised in close cases, a court may find the facts first, and discuss afterwards the technical sufficiency of the words of the pleadings. Brownsword v. Edwards, 2 Ves. Sr., 243; State of Kansas v. Colorado, 185 U.S. 125, 22 S.Ct. 552, 46 L.Ed. 838; Commonwealth of Virginia v. West Virginia, 206 U.S. 290, 27 S.Ct. 732, 51 L.Ed. 1068; State of Wisconsin v. Illinois, 270 U.S. 634, 46 S.Ct. 354, 70 L.Ed. 772. See also Stratton v. Hernon, 154 Mass. 310, 313, 28 N.E. 269; Saltman v. Nesson, 201 Mass. 534, 540, 88 N.E. 3; Glover v. Waltham Laundry Co., 235 Mass. 330, 339, 127 N.E. 420; Cram v. Cram, 262 Mass. 509, 513, 160 N.E. 337; Rule 28 of the Superior Court (1932).

On June 10, 1933, by consent of all parties except the intervener, the plaintiff's bill was dismissed. This had no effect upon the intervening petition, which remained for hearing and decision. Gunnells v. Latta, 86 Ark. 304, 111 S.W. 273; McKesson & Hunt v. Mendenhall, 64 N.C. 502. See, also, President, etc., of Atlas Bank v. Nahant Bank, 23 Pick. 480, 492; Hirshfield v. Fitzgerald, 157 N.Y. 166, 51 N.E. 997,46 L.R.A. 839; Blume v. Oil-O-Chron, Inc. (Mass.) 191 N.E. 131; 91 A.L.R. 594. Hearings proceeded before a master upon the intervening petition, to which the original plaintiff and the individual defendants had answered. The only objections to the master's report were those brought in by the original plaintiff, the receiver. He moved also to recommit the report, and this motion was denied on March 21, 1934. On the same day his exceptions to the master's report were overruled, the report was confirmed, and the demurrer to the intervening petition was overruled. On April 16, 1934, the receiver was formally made a party defendant to the intervening petition, as of March 6, 1933, the day when as the original plaintiff he had answered to the intervening petition. On April 17, 1934, a final decree was entered, establishing the mortgage of the intervener as superior to any right, title or interest of the Federal National Bank of Boston or its receiver, and restraining the individual defendants from interfering with the rights of the intervener under its mortgage.

The case comes here on appeals by the receiver from (1) the denial of his motion to recommit the master's report, (2) the overruling of his exceptions to the master's report and the confirmation of the report, (3) the making of the receiver a party defendant to the intervening petition, (4) the overruling of the demurrer to that petition, and (5) the final decree.

1. (a) In part, the motion to recommit was for the purpose of requiring the master to report his rulings upon evidence. The order by which he was appointed required him, in accordance with Rule 86 of the Superior Court (1932), to report ‘ such questions of law, arising in the course of his duty, as any party may request,’ and such questions include questions of evidence. Cook v. Scheffreen, 215 Mass. 444, 447, 448, 102 N.E. 715; Flaherty v. Goldinger, 249 Mass. 564, 567, 144 N.E. 374; A. T. Stearns Lumber Co. v. Howlett, 260 Mass. 45, 69, 157 N.E. 82, 52 A.L.R. 1125. But when a master fails to do this, the party aggrieved must seek his remedy in accordance with law and the rules of court. Burnham v. Dowd, 217 Mass. 351, 353, 104 N.E. 841,51 L.R.A. (N. S.) 778; Arnold v. Maxwell, 230 Mass. 441, 444, 119 N.E. 776; Narragansett Amusement Co. v. Riverside Park Amusement Co., 260 Mass. 265, 277, 157 N.E. 532; Commissioner of Banks v. Tremont Trust Co., 267 Mass. 331, 336, 337, 166 N.E. 848. In a long hearing, counsel often save questions of evidence which appear to be of merely ephemeral interest, and a master reasonably may decide not to burden his report with them. If a party still desires to present them to the court, Rule 90 of the Superior Court (1932) prescribes his remedy. He must bring in a written objection to the ruling as to evidence alleged to be erroneous, and, bearing in mind the principle that an exception can be sustained only where the master's report itself demonstrates his error, the party must present with the written objection a written request that the master append to his report a ‘ brief, accurate and fair summary of so much of the evidence as shall be necessary’ to present the question of law. In the present case, the master appended such a summary with respect to every objection as to evidence, included in the written request, and thus apparently performed his whole duty. If the summary did not satisfy the receiver, the burden was upon him to show by the record that there was error in denying his motion to recommit for a further report of the rulings made and the evidence pertinent thereto. He failed to support his motion to recommit by any affidavit (Rule 46 of the Superior Court [1932]), showing that any question of evidence not reported was properly saved, or what such question was, or what would constitute a ‘ brief, accurate and fair summary’ to be appended to the report. In the absence of such a showing of error by the record, his appeal from the denial of the motion to recommit is without merit. Epstein v. Epstein (Mass.) 191 N.E. 418, 419.

(b) The other reasons assigned for the motion to recommit fall within the elementary rule re-stated in Epstein v. Epstein (Mass.) 191 N.E. 418, 419, in these words, ‘ How far findings of fact made by a master shall be subjected to analysis by recommitting the case to him with directions to report subsidiary facts of evidence by which the correctness of his findings in point of fact may be tested, is discretionary with the court that appointed him.’ To the same effect, as to auditors, see J. W. Grady Co. v. Herrick (Mass.) 192 N.E. 748. The record contains nothing to show that the judge was wrong in refusing to recommit the report.

2. The exceptions to the master's report were properly overruled, and the report was properly confirmed. None of the exceptions, which of course are identical in form with the written objections appended to the master's report, appear to us worthy of discussion.

The receiver handed to the master, with the objections and the written request for a summary of evidence necessary to present the questions of law raised by the objections, another paper which he entitled, ‘ Exceptions of respondent Herbert Pearson, receiver, to admission and exclusion of evidence.’ That paper had no standing in equity practice, and ought not to have been received, filed or printed in the record. Quimby v. Tapley, 202 Mass. 601, 89 N.E. 167. It cannot be considered. Under the present practice, there can be no exceptions to a master's report, without ‘ a special order of the court,’ except those which are the implied result of written objections brought in and appended by the master to his report. Equity Rule 26 (252 Mass. 608).Rule 90 of the Superior Court (1932). These rules have eliminated the formal step, previously necessary, of filing written exceptions referring to and founded upon written objections already brought in and appended to the report. Chancery Rule 31 (136 Mass. 608).O'Brien v. Keefe, 175 Mass. 274, 276, 56 N.E. 588.

3. Probably it was unnecessary to make the receiver a party defendant to the intervening petition, for the receiver as the original plaintiff and all the defendants had already answered to the intervening petition, and the receiver at least had contested it all through the case, and still contests it. If, however, the judge deemed it best to allow an amendment...

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