Stern v. Lieberman

• Decision Date: 31 October 1940
• Citation: 29 N.E.2d 839,307 Mass. 77
• Parties: STERN et al. v. LIEBERMAN.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

307 Mass. 77

29 N.E.2d 839

STERN et al.

v.LIEBERMAN.

Supreme Judicial Court of Massachusetts, Suffolk.

Oct. 31, 1940.

Exceptions from Superior Court, Suffolk County; Giles, Judge.

Action by Yermie Stern and others against Frederick E. Lieberman to recover rental for certain theater equipment. The judge of the superior court found for defendant, and plaintiffs bring exceptions.

Exceptions overruled.

Argued before FIELD, C. J., and DONAHUE, LUMMUS, QUA, and RONAN, JJ.

A. A. Ginzberg, of Boston, for plaintiffs.

H. M. Pakulski and M. H. Slobodkin, both of Boston, for defendant.

RONAN, Justice.

The plaintiffs seek to recover the rental for certain equipment shipped by them to two theatres, in Boston, which they allege was leased by them to the defendant. The record shows that, after considerable correspondence between the parties, the plaintiffs, in New York, sent two unsigned contracts (one for the equipment for each theatre) to the defendant, and after one was signed ‘Preferred Pictures, Inc., by F. E. Lieberman’ and the other ‘Greater Boston Theaters, Inc., by F. E. Lieberman’ they were returned to the plaintiffs, who executed them. The defendant was described in each contract as the party of the second part, and both contracts contained certain terms to be performed by him, including the obligation to pay the specified rentals. The defendant filed a general denial. He did not deny the genuineness of his signature and makes no contention that he did not execute these contracts in the form just stated. The judge found for the defendant. The case is here upon exceptions of the plaintiffs to the refusal of the judge to grant three requests for rulings which, in substance, were that the contract binds the signer thereof personally, that the contract in question is one on which the defendant is bound, and that the defendant is bound personally by all the correspondence. We assume that the term ‘contract’ in these requests applies to each of the leases in question.

Each of the contracts provided that its construction was governed by the law of New York. Each contained a recital that the parties had affixed their seals. One of the contracts shows the letters ‘LS' after the name of the defendant, but the other contract does not show that any seal had been attached. Out attention has not been directed by counsel, in either their briefs or arguments, to any statute or decision of the State of New York determining when a contract is to be considered as a sealed instrument. The case is considered as presented by the parties, whose rights are to be determined by the common law as understood in this Commonwealth before the enactment of what is now G.L.(Ter.Ed.) c. 4, § 9A. That common law, in the absence of anything to indicate the contrary, is presumed to prevail in the State of New York. Miller v. United States Fidelity & Guaranty Co., 291 Mass. 445, 197 N.E. 75;Baker v. Allen, 292 Mass. 169, 172, 197 N.E. 521; Bradbury v. Central Vermont Railway, 299 Mass. 230, 12 N.E.2d 732;Smith v. Brown, 302 Mass. 432, 19 N.E.2d 732.

The letters ‘LS' appearing after a signature upon an instrument reciting that a seal is attached is an appropriate method of showing in a record on appeal that the document was sealed. Smith v. Butler, 25 N.H. 521, 524;Cannon v. Gorham, 136 Ga. 167, 169, 71 S.E. 142, Ann.Cas.1912C, 39;Altschul v. Casey, 45 Or. 182, 185, 186, 76 P. 1083. We have not seen this contract and we cannot, upon the record, say that it was not a sealed instrument. But a seal was not necessary to its validity and a seal may be disregarded where the substantive rights of the parties are not thereby impaired. Milton v. Mosher, 7 Metc. 244;Sherman v. Fitch, 98 Mass. 59;Blanchard v. Inhabitants of Blackstone, 102 Mass. 343;Clarke v. Pierce, 215 Mass. 552, 102 N.E. 1094, Ann.Cas.1914D, 421;Alfano v. Donnelly, 285 Mass. 554, 189 N.E. 610;Adamowicz v. Iwanicki, 286 Mass. 453, 190 N.E. 711;Moran v. Manning, Mass., 28 N.E.2d 478. The difference between a specialty and a simple contract has been either entirely eliminated or greatly narrowed by legislation in some jurisdictions. See 1 Williston, Contracts, § 297. For instance, in New York an undisclosed principal can be held liable upon a sealed instrument since the enactment of Laws of 1936, c. 685, amending Civil Practice Act, § 342, Briggs v. Partridge, 64 N.Y. 357, 21 Am.Rep. 617;Crowley v. Lewis, 239 N.Y. 264, 146 N.E. 374. Since the grounds upon which our conclusion rests are unaffected by considering this contract as unsealed, we are willing to make that assumption in favor of the plaintiffs and hereafter regard both contracts as simple contracts.

If a contract discloses the name of the principal and contains promises by the principal to the other party to the contract but contains no personal undertaking by the person who, upon the face of the instrument, appears to have signed it in behalf of the principal, then the contract is construed as that of the latter and in binding upon him if the agent was authorized to execute it. Kingman v. Kelsie, 3 Cush. 339;Abbey v. Chase, 6 Cush. 54;Ellis v. Pulsifer, 4 Allen 165;Sherman v. Fitch, 98 Mass. 59;Blanchard v. Inhabitants of Blackstone, 102 Mass. 343;Carpenter v. Farnsworth, 106 Mass. 561, 8 Am.Rep. 360;Chipman v. Foster, 119 Mass. 189;Cutler v. Inhabitants of Ashland, 121 Mass. 588; Goodenough v. Thayer, 132 Mass. 152;Terry v. Brightman, 132 Mass. 318. But where the signature of the person who executes a bilateral contract, when construed with all the provisions in the body of the contract, leaves it doubtful whether the obligation is the personal undertaking of the person who signed the contract or whether it was an obligation of some third person as his principal, then the circumstances surrounding the execution of the contract may be shown in order to ascertain the intention of the parties in entering upon the undertaking. Guernsey v. Cook, 117 Mass. 548;Lunn & Sweet Co. v. Wolfman, 268 Mass. 345, 353, 167 N.E. 641;Erskine v. United States, 9 Cir., 84 F.2d 690;Lutz v. Van Heynigen Brokerage Co., 199 Ala. 620, 75 So. 284;Pacific Improvement Co. v. Jones, 164 Cal. 260, 128 P. 404;Austin, Nichols & Co., Inc. v. Gross, 98 Conn. 782, 120 A. 596;United Surety Co. v. Meenan, 211 N.Y. 39, 105 N.E. 106;Hernandez v. Brookdale Mills, Inc., 194 App.Div. 369, 185 N.Y.S. 485;Dormont Savings & Trust Co. v. Kommer, 338 Pa. 548, 13 A.2d 525;Germania National Bank v. Mariner, 129 Wis. 544, 109 N.W. 574; Am.Law Inst. Restatement: Agency, § 323(2).

The burden was upon the plaintiffs to show that the defendant became a party to these contracts. The defendant would have been shown to be a party if the plaintiffs had proved that the names in which the contracts were executed were trade names under which he did business. His trade name, if he had one, would bind him as effectually as his personal name. Melledge v. Boston Iron Co., 5 Cush. 158,51 Am.Dec. 59;Rand v. Farquhar, 226 Mass. 91, 115 N.E. 286;Nerrimac Chemical Co. v. Moore, 279 Mass. 147, 181 N.E. 219;Farnum v. Bankers' & Shippers' Ins. Co., 281 Mass. 364, 183 N.E. 718. There was, however, no evidence that Lieberman had adopted any such business names.

The names in which Lieberman executed the contracts would seem to indicate that they were corporate names. Contracts made in the name of a principal by an authorized agent are the contracts of the principal, Goodenough v. Thayer, 132 Mass. 152;Cass v. Lord, 236 Mass. 430, 128 N.E. 716, and a usual method of executing a contract by an agent is to do so in the name of the principal by his agent. Gardner v. Gardner, 5 Cush. 483,52 Am.Dec. 740;Mussey v. Scott, 7 Cush. 215,54 Am.Dec. 719;Jefts v. York, 10 Cush. 392;Conant v. Alvord, 166 Mass. 311, 44 N.E. 250;Grafton National Bank v. Wing, 172 Mass. 513, 52 N.E. 1067, 43 L.R.A. 831, 70 Am.St.Rep. 303; Sun Printing & Publishing Association v. Moore, 183 U.S. 642, 647, 22 S.Ct. 240, 46 L.Ed. 366;Bussing v. Lowell Film Productions, Inc., 233 App.Div. 493, 253 N.Y.S. 719.

If the signatures represented existing corporations then the plaintiffs could recover if they showed that in executing the contracts the corporations were acting as agents of Lieberman. Byington v. Simpson, 134 Mass. 169, 45 Am.Rep. 314;Crawford v. Moran, 168 Mass. 446, 47 N.E. 132;Elwell v. State Mutual Life Assurance Co., 230 Mass. 248, 119 N.E. 794. Lieberman could execute the contracts on his own account either in his own name or in the name of an agent, Schmaltz v. Avery, 16 Q.B. 655; Hushion v. McBride, 296 Mass. 4, 4 N.E.2d 443, or he could have the signers execute them in their own right and for their sole benefit. The form of the signatures does not disclose whether the signers executed the contracts in behalf of Lieberman or in their own behalf. The intent of Lieberman in attaching these signatures to the contract was material. Jefferds v. Alvard, 151 Mass. 94, 23 N.E. 734;Metropolitan Coal Co. v. Boutell Transportation & Towing Co., 196 Mass. 72, 84, 81 N.E. 645;Estes v. Aaron, 227 Mass. 96, 116 N.E. 392;Friend Lumber Co., Inc., v. Armstrong Building Finish Co., 276 Mass. 361, 177 N.E. 794, 80 A.L.R. 599. His intent shed some light upon his relationship to the contracts and the identity of the parties thereto. Lunn & Sweet Co. v. Wolfman, 256 Mass. 436, 152 N.E. 893;Associates Discount Corp. v. Haynes Garage, Inc., Mass., 24 N.E.2d 685. The evidence does not show whether each of these signatories conducted a theatre and had requested Lieberman to secure the plaintiffs' equipment for them. The judge found that Lieberman did not intend to bind himself personally, and in the circumstances this was the equivalent to a finding that he did not intend that the signatories that he supplied should act as his agents. Proof of agency is ordinarily a question of fact. Hamilton v. Coster, 249 Mass. 391, 394, 144 N.E. 226;Raymond Syndicate, Inc. v. American Radio & Research Corp., 263 Mass. 147, 152, 160 N.E. 821. The general...