United States Fid. & Guar. Co. v. English Const. Co.

• Decision Date: 26 April 1939
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: UNITED STATES FIDELITY & GUARANTY CO. v. ENGLISH CONST. CO. SAME v. SHEEHAN.

303 Mass. 105

20 N.E.2d 939

UNITED STATES FIDELITY & GUARANTY CO.

v.ENGLISH CONST. CO.

SAME

v.SHEEHAN.

Supreme Judicial Court of Massachusetts, Middlesex.

April 26, 1939.

Exceptions from Land Court, Middlesex County; J. E. Fenton, Judge.

Writs of entry by the United States Fidelity & Guaranty Company against the English Construction Company, and by the same demandant against Mary L. Sheehan. Judgment for demandant was ordered in each case after the reports of an auditor, and each tenant brings exceptions.

Exceptions overruled in the case against the English Construction Company, and sustained in the case against Mary L. Sheehan. W. D. Regan, of Lowell, for tenants.

W. F. Howard, of Lowell, for demandant.

LUMMUS, Justice.

These are writs of entry for different parcels of land. On June 10, 1930, the demandant, as assignee of a judgment recovered in New York by one Mullen against Dennis E. Conners and a corporation named Conners Brothers Company, brought an action upon the judgment in a district court in this Commonwealth, and made a special attachment of the right, title and interest of Conners Brothers Company in twelve parcels of land standing in the name of the tenant English Construction Company, a corporation, and in nine other parcels of land standing in the name of the tenant Mary L. Sheehan, then Mary L. Conners. On December 15, 1933, judgment was recovered against Conners Brothers Company for $24,955.96 damages and $28.32 costs. On January 6, 1934, execution was issued. On January 9, 1934, levy was made upon the land specially attached. On April 14, 1934, the land was sold on execution to the demandant for $19,670, and the sheriff on April 25, 1934, gave a deed to the demandant, which was recorded on May 4, 1934. The sheriff made his return on April 24, 1934.

Conners Brothers Company was engaged in the contracting business. From 1914 on it was wholly dominated and controlled by Dennis E. Conners, the father of Mary L. Sheehan. The claim which resulted in the Mullen judgment originated in a bond for $20,000 executed on February 17, 1916, given by Conners Brothers Company to Bass Construction Company, conditioned upon the performance by the former company of a building contract. The demandant and another surety company were sureties upon this bond. An action was brought in New York upon this bond on June 28, 1918, and ultimately on June 29, 1922, the sureties were compelled to pay $25,615.46. Of this they were repaid $7,716.16. They assigned to Mullen their claims against Conners Brothers Company and Dennis E. Conners, and Mullen recovered judgment against them in New York on March 22, 1926, for $17,046.41, which judgment was assigned to the demandant on March 24, 1926.

During the litigation in New York, Dennis E. Conners, his wife Margaret V. Conners, and his daughter Mary L. Sheehan, organized the tenant English Construction Company under the laws of Delaware. They constituted all the directors. Dennis E. Conners owned nine hundred ninety-seven shares and Margaret V. Conners owned one share. There was no other stockholder. Dennis E. Conners caused Conners Brothers Company, in December, 1921, to convey all its real estate, valued at $56,970, without consideration, through himself or his wife to English Construction Company. The auditor found that the conveyance left Conners Brothers Company insolvent. All three persons named knew the financial condition of Conners Brothers Company, and consequently knew that the effect of the transaction was to leave that corporation insolvent.

The land standing in the name of Mary L. Sheehan at the time of the special attachment was worth $30,000. It came to her in this way: One Edward F. Conners had a claim against Dennis E. Conners, which was settled by a mortgage for $5,700 given by English Construction Company on February 25, 1925, covering nine parcels of land which had been the property of Conners Brothers Company and had been conveyed to English Construction Company as already described. Edward F. Conners had no claim against either corporation. He not only released his claim against Dennis E. Conners in consideration of the mortgage, but also assigned to English Construction Company an interest in life insurance policies upon which English Construction Company ultimately received $5,816.22, more than the principal of the mortgage. But a default in the mortgage occurred, and on November 23, 1925, the land covered by the mortgage was sold at foreclosure sale to the tenant Mary L. Sheehan for $8,600. What happened to the surplus above the mortgage debt did not appear.

Judgment for the demandant was ordered in each case. Each tenant filed a bill of exceptions.

The facts already recited appear in the report of an auditor whose findings of fact by agreement were to be final. The report of such an auditor constitutes a case stated. Merrimac Chemical Co. v. Moore, 279 Mass. 147, 181 N.E. 219;Untersee v. Untersee, Mass., 13 N.E.2d 29;Vigneault v. Dr. Hewson Dental Co., Mass., 15 N.E.2d 185;Pesce v. Brecher, Mass., 19 N.E.2d 36. Although his subsidiary findings must stand unless it appears that there was no evidence sufficient in law to warrant them, his conclusions of fact reached by inference from those subsidiary findings are open to review as matter of fact not only by the trial court but also by this court when the case comes here ‘upon appeal, exceptions, report or other proceedings in the nature of an appeal.’ G.L.(Ter.Ed.) c. 231, § 126; Untersee v. Untersee, Mass., 13 N.E.2d 29. See also Farrington v. Boston Safe Deposit & Trust Co., 280 Mass. 121, 127, 181 N.E. 779. This was assumed in Bloom, South & Gurney, Inc. v. Mitchell, 289 Mass. 376, 379, 194 N.E. 114, and in Brodie v. Donovan, Mass., 9 N.E.2d 386, and cannot be doubted in view of the statute, which was designed to make the practice on appeal upon cases stated at law conform to the practiceon appeal in equity cases submitted upon agreed facts (Stuart v. Sargent, 283 Mass. 536, 541, 186 N.E. 649;Hannah v. Frawley, 285 Mass. 28, 31, 188 N.E. 385;McMurdo v. Getter, Mass., 10 N.E.2d 139), or upon the report of a master. MacLeod v. Davis, 290 Mass. 335, 195 N.E. 315. This constitutes a statutory exceptions to the general rule that ‘the drawing of permissible inferences in an action at law is a question of fact; it is a function of the fact finding tribunal and not of this court on review of questions of law.’ Commercial Credit Corp. v. Commonwealth Mortgage & Loan Co., Inc., 276 Mass. 335, 340, 177 N.E. 88, 90;Jones v. Clark, 272 Mass. 146, 172 N.E. 250;Worcester v. L. Rocheford & Son, Inc., Mass., 15 N.E.2d 266;Cook v. Farm Service Stores, Inc., Mass., 17 N.E.2d 890. There are in a number of reported cases expressions which may be thought to tend towards making unreviewable by this court the conclusions drawn by the trial judge from the subsidiary findings of such an auditor, if those conclusions are warranted as matter of law; but that is not the correct rule of practice, since St.1913, c. 716, § 5 (G.L. [Ter.Ed.] c. 231, § 126). See Boston Lodge, No. 10, Benevolent & Protective Order of Elks v. Boston, 217 Mass. 176, 177, 104 N.E. 453;Smith v. Middlesex Mutual Fire Ins. Co., 228 Mass. 301, 304, 117 N.E. 331;Standard Oil Co. of New York v. Malaguti, 269 Mass. 126, 129, 168 N.E. 535;Rosenthal v. Liss, 269 Mass. 373, 374, 169 N.E. 142;Lukiwesky v. Kuporotz, 283 Mass. 524, 528, 186 N.E. 560;Bratton v. Rudnick, 283 Mass. 556, 558, 186 N.E. 669;Scott v. Lieberman, 284 Mass. 325, 327, 187 N.E. 629;Sojka v. Dlugosz, Mass., 200 N.E. 554;Boston & Albany Railroad v. Commonwealth, Mass., 6 N.E.2d 613.

If any finding of fact by an auditor whose findings of fact are final ‘appears in the report to be based upon an erroneous opinion of law, or upon inadmissible evidence’ (G.L.[Ter.Ed.] c. 221, § 56), the point is now presented, under Rule 89 of the Superior Court (1932), not as formerly by a simple motion to recommit (Spilios v. Papps, 288 Mass. 23, 192 N.E. 155), but by bringing in to the auditor within ten days after the settling of the draft of his report, written objections thereto which are appended to the report as filed, and which form the sole basis for an obligatory recommittal. Rule 6 of the Land Court, adopted on March 28, 1935, and approved by this court to take effect from and after Arpil 30, 1935, provides as follows: ‘All proceedings shall be governed by the rules of the superior court as the same now are or may hereafter be established, so far as applicable,’ with an immaterial exception.

Some of the questions argued as to the conduct of the auditor and his findings are not open in the absence of an objection under Rule 89 of the Superior Court (1932). Others cannot be dealt with because of the failure of the tenants to cause the facts and evidence upon which the objection is based to appear in the report of the auditor. Carleton & Hovey Co. v. Burns, 285 Mass. 479, 483, 484, 189 N.E. 612;Pearson v. Mulloney, 289 Mass. 508, 513, 194 N.E. 458;Morin v. Clark, Mass., 6 N.E.2d 830;Krauss v. Kuechler, Mass., 15 N.E.2d 207, 117 A.L.R. 1355;Markey v. Smith, Mass., 16 N.E.2d 20, 118 A.L.R. 274;Wilbur v. Newton, Mass., 18 N.E.2d 365. Other objections brought in have not been argued and therefore are waived. Boston v. Dolan, Mass., 10 N.E.2d 275. Only a few require discussion.

(1) The auditor was not required to believe the testimony of Dennis E. Conners that there was consideration for the conveyance of land from Conners Brothers Company to English Construction Company, and that the conveyance did not make the former company insolvent, even though he was called as a witness by the demandant. The demandant was not bound by his testimony. Haun v. LeGrand, 268 Mass. 582, 584, 168 N.E. 180;Griffin v. New York, New Haven & Hartford Railroad, 279 Mass. 511, 516, 181 N.E. 839;Canavan v. George, 292 Mass. 245, 198 N.E. 270; Sluskonis v. Boston & Maine Railroad, Mass., 12 N.E.2d 858. The doubt on this...