Schuster v. Baskin
| Decision Date | 03 April 1968 |
| Citation | 354 Mass. 137,236 N.E.2d 205 |
| Parties | Gerald SCHUSTER v. Carl BASKIN et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Robert J. Sherer, Boston, for defendants.
Joseph B. Abrams, Boston, for plaintiff.
Before WILKINS, C.J., and WHITTEMORE, CUTTER and KIRK, JJ.
Schuster obtained a verdict of $24,931.62 for breach of an alleged oral contract between him and the defendants. Their outline bill of exceptions presents issues concerning the trial judge's denial of a motion for a directed verdict, rulings on evidence, and portions of the charge. The facts are stated in their aspect most favorable to Schuster.
Schuster was in the real estate business. In 1960, he had a chance to buy land in Brighton, upon which he proposed to erect buildings with Federal Housing Administration (F.H.A.) assistance. He obtained the cooperation of a construction man named Turner and an architect named Schwartz. To obtain financing assistance, they interested the defendants (Baskin and his brother, both 'well-informed real estate people,' and Charles McLaughlin who was connected with a mortgage company). The defendants 'facilitated the F.H.A. financing,' took care of arranging an F.H.A. insured mortgage loan from a bank, and 'agreed to put in' the necessary equity financing above the mortgage. This was to be done through Hancock Capital Company (Hancock), a small business investment corporation. Sinclair Construction Company, Inc. (Sinclair) was formed to be the general contractor. Regency Arms, Inc. (Regency) and Chiswick Arms, Inc. (Chiswick) were organized, each to hold one of the two pieces of land used in the project. 1
Sinclair made contracts with Regency and Chiswick to construct the buildings. Performance bonds were required. The application for the bonds was by Sinclair and it was guaranteed by Schuster, Schwartz, and Turner and by their wives. Hancock lent $60,000 to Regency and the same sum to Chiswick. Each loan was secured by pledges of the stock (in the borrowing company) owned by Schuster, Schwartz, and Turner.
In March, 1962, the projects were in financial trouble because the buildings had cost more than had been estimated and because the advances, secured by the bank mortgage, were not adequate. On April 11, 1962, Schuster, his father-in-law Benjamin Siegel, Turner, Schwartz, McLaughlin, and the Baskins, with their attorneys, attended a meeting to discuss the situation. The projects were then about (or more than) seventy per cent complete. Schuster was outvoted on his proposal to sell the projects to a New York securities company. At length, so Schuster and Siegel testified, there was 'final agreement' that 'Schuster, Schwartz, and Turner, would turn over * * * (their) stock and relinquish any interest in the (Regency and Chiswick) corporations' to the two Baskins and McLaughlin and that the Baskins and McLaughlin 'would in turn put all the necessary capital into the projects to complete them as quickly as possible.' 2 This alleged oral agreement is the contract for breach of which this action is brought. Schuster himself testified (as did Siegel) that 'there was no written agreement' with relation to the defendants' undertaking 'to put in whatever money was necessary and hold * * * (him) harmless to the bonding company,' although he 'asked for it to be in writing.'
In any event, Schuster, Schwartz, and Turner did assign their Regency and Chiswick stock to the defendants and resigned their positions in these two corporations. They also on that day executed as sealed instruments general releases running to the several corporations, to McLaughlin, and to each of the Baskins. These were in the usual broad form covering 'all claims and demands.' Schuster was then represented by his attorney, Mr. Goldstein.
In August, 1962, Schuster and his wife received letters from an attorney for the bonding company which had written the performance bond asking that they, as indemnitors, take action to save the bonding company harmless from loss. Later he was sued by that company on his guaranty of the performance bond. There was evidence that the bonding company participated in finishing the projects, and that at least Turner, as guarantor of the bond agreement, had paid $15,000 for a release by the bonding company from his guarantor's obligation. Upon receipt of the bonding company's demand, Schuster paid a retainer of $1,500 to his attorney, Mr. Goldstein, and also a $1,500 retainer to his present trial counsel.
At the close of the evidence, counsel for the defendants moved for a directed verdict in their favor, upon the pleadings and the evidence. This motion was denied.
1. The defendants' principal contention is that the general release under seal given by Schuster to each of them bars any recovery in this action. The release was pleaded and there is no dispute that the release was signed and delivered on April 11, 1962. Schuster gave a similar release to Schwartz and to Turner.
So far as the printed record and record appendix reveal, the defendants did not file any request for instructions relating to the releases nor did they specify the releases as one of the grounds for their motion for a directed verdict. The judge did not ask counsel to specify the grounds upon which the defendants relied, so issues based on the release are open to them. Trites v. City of Melrose, 318 Mass. 378, 380, 61 N.E.2d 656. 3 The release was in evidence and, on Schuster's own evidence, its execution and delivery were not in dispute. If as matter of law the release barred recovery, a verdict for the defendants...
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