Rice v. Winslow

• Decision Date: 25 November 1902
• Parties: RICE v. WINSLOW.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

182 Mass. 273

65 N.E. 366

RICE v. WINSLOW.

Supreme Judicial Court of Massachusetts, Worcester.

November 25, 1902

COUNSEL

Thayer & Rugg, for plaintiff.

Herbert Parker and R. A. Stewart, for defendant.

OPINION

MORTON J.

This is a bill to have a note and mortgage declared void, and the defendant enjoined from prosecuting a pending action at law on the mortgage note against the plaintiff, and from proceeding with a foreclosure sale of the premises described in the mortgage. There was a demurrer, which was overruled and the defendant appealed. Thereupon the presiding justice being of opinion that the matter ought to be determined before further proceedings were had, reported to this court the questions of law arising upon the demurrer and appeal.

The bill alleges that the defendant is a broker buying and selling upon margin and upon credit stocks, securities commodities, and bonds; that at different times in 1899 (naming them) the plaintiff contracted with him to buy upon margin and credit certain stocks (describing them), having at each of said times no intention to perform the contracts by the actual delivery and receipt of the stocks and payment of the price therefor, and the defendant having at all of said times reasonable cause to believe that there was no intention on the part of the plaintiff to perform said contracts, or any of them, by the actual receipt and delivery of the stocks and the payment of the price therefor; that the plaintiff deposited with the defendant at divers times small sums as margins upon said stocks, to be held by him against the rise and fall of said stocks; and that on or about the 20th of December, 1899, the defendant called on the plaintiff for more margins against the further decline of said stocks, and the plaintiff, not being able to advance the money, executed and delivered to the defendant the mortgage in question to protect such margin accounts. The bill further alleges that subsequently, in February, 1900, contrary to the direction of the plaintiff, and against his wishes, the defendant closed out said accounts, as well as certain like accounts in the name of plaintiff's wife, with the result, as the defendant asserted, that there was due from the plaintiff to him the sum of $5,034.31 on account of said transactions, and from the plaintiff's wife the further sum of $601.38; that the plaintiff and his wife have brought actions at law to recover back the money paid by them as margins; and that the defendant has begun foreclosure proceedings under said mortgage for default in the payment of the principal and interest alleged to be due on said note, and concurrently with the foreclosure proceedings has brought suit upon the mortgage note. The bill contains an offer to pay what, if anything, should be found due. This of itself warranted the overruling of the demurrer (Brown v. Bank, 148 Mass. 300, 19 N.E. 382), and would justify us in affirming the decree of the superior court. But such a disposition of the case would leave undetermined the principal questions at issue between the parties, and which must necessarily come up in any hearing upon the merits. We proceed, therefore, to consider those questions.

The transactions described in the bill come within St. 1890, c 437, § 2. But the defendant contends that the remedy there given by action of contract is exclusive, and that a court of equity has no jurisdiction to grant the relief prayed for. He further contends...