Savoy Finance Co. v. De Biase

• Decision Date: 06 January 1933
• Citation: 281 Mass. 425,183 N.E. 742
• Parties: SAVOY FINANCE CO. v. DE BIASE et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

281 Mass. 425

183 N.E. 742

SAVOY FINANCE CO.

v.DE BIASE et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Jan. 6, 1933.

Acceal from Municipal Court of Boston, Appellate Division; F. Delano Putnam, Judge.

Action by the Savoy Finance Company against Enrico De Biase and others. From an order of the appellate division dismissing a report from the municipal court after a decision in favor of the plaintiff, the defendants appeal.

Order affirmed.Joseph H. Cinamon, of Boston, for plaintiff.

J. C. Coughlin, of Boston, for defendants.

PIERCE, J.

This is an action of contract in which the plaintiff seeks to recover upon a promissory note as set forth in its declaration. The answer is a general denial, payment, want of consideration, and the further answer that the note was void for illegality. At the trial the defendants waived so much of their answer as contained a denial of the genuineness of the signature and denial of the existence of the corporation. The plaintiff offered the note in evidence and rested. ‘The parties agreed to leave the question of counsel fee to the court, without offering any evidence on that point.’

The case was tried in the municipal court of the city of Boston. The report contains all the evidence material to the questions reported. At the trial the defendants presented twelve requests for findings and rulings. On these requests the trial judge ruled that those numbered one, two, three, four, five, eight and ten are requests for findings of fact and refused to pass upon them. He ruled that requests numbered six, seven and nine are not applicable to the facts found by him and for that reason denied them. He denied requests numbered eleven and twelve and found for the plaintiff. In the appellate division the report was dismissed and the case is before this court on the appeal of the defendants from the decision of the appellate court.

The evidence of the defendants discloses that Enrico De Biase (hereafter referred to as the defendant), the maker of the note in action, on January 31, 1930, was adjudicated a bankrupt; that at that time he was indebted to the plaintiff in the sum of $500 on a promissory note, dated June 7, 1929, secured by a chattel mortgage of the stock and fixtures of his barber shop; that shortly after said adjudication he was requested by the president of the plaintiff corporation to pay the amount due to plaintiff at the time of the said adjudication, and he said he could not pay the note; that after several talks he stated ‘that the stock market was active and if the plaintiff was willing to loan him $500 with which to ‘play the market,’ he would try to make sufficient money to repay the amount owed the plaintiff at the time of his bankruptcy'; that subsequently, on February 27, 1930, an agreement under seal was executed by and between the plaintiff and the defendant. This agreement is referred to in, and attached to, the report. It recites the indebtedness of the defendant to the plaintiff in the sum of $500 upon a promissory note; that the defendant was adjudged a bankrupt on January 31, 1930; that the defendant desires to borrow from the plaintiff an additional sum of $500; and it contains the statement: ‘Now Therefore, in consideration of the Savoy Finance Co. making said $500.00 additional loan to the said Enrico De Biase, it is understood and agreed’ that ‘Enrico De Biase is to cause to be opened a so-called margin account to be carried in the name of Joseph H. Cinamon on a margin basis of not less than 50%, said Joseph H. Cinamon to buy such securities as said Enrico De Biase may direct upon the said basis, and to sell the same when, in the opinion of said De Biase, and said Cinamon, a sale ought to be made; said account and security to be in trust for the benefit of said De Biase and as a security for the note hereinbefore mentioned.’

The evidence of the defendants tended to prove that pursuant to the executed agreement the plaintiff handed to the defendant a check for $500 which the defendant in turn delivered to Cinamon, the attorney for the plaintiffand trustee named in the agreement; that at the same time the defendant, pursuant to the agreement, delivered to Cinamon two notes each for $500 and each dated February 27, 1930; that Cinamon opened an account with a broker for the purchase and sale of stocks on margin, and, as directed by the defendant, ordered the purchase of two lots of stocks which were later sold by Cinamon with the consent of the defendant at a profit of $621; that on April 28, 1930, the day of the sale of the last lot, Cinamon withdrew from deposit with the broker $616.50, which was the net profit arising from both sales, less certain payments to the defendant by the broker and a deduction of $50 on an old account; that this left the original deposit of $500 to the credit of the defendant or Cinamon in the margin account. The testimony further intended to show that on the last mentioned day Cinamon, with the consent of the defendant, purchased one hundred shares of Appalachian Gas Stock; that the stock declined in the market and the broker made demands for additional margin; that Cinamon informed the defendant of the broker's demands, but the defendant did not supply the requested funds and the broker sold out the stock at a loss on June 18, 1930, leaving a credit balance of $7.49, as shown in a statement of the account annexed to the report. There was further evidence that on April 29, 1930, the day after the withdrawal of $616.50 from the margin account, Cinamon paid the plaintiff the sum of $562.80 and turned over the balance of $53.70 to the defendant; and that the payment of $562.80 to the plaintiff was sufficient to pay in full the principal amount of one of the notes made and delivered in pursuance of the agreement, and the interest on both notes up to that date.

By agreement of counsel it is stated in the report that, after the account was sold out...