Woodbury v. Print

• Decision Date: 01 March 1905
• Citation: 187 Mass. 426,73 N.E. 547
• Parties: WOODBURY et al. v. SPARRELL PRINT et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

187 Mass. 426

73 N.E. 547

WOODBURY et al.

v.SPARRELL PRINT et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 1, 1905.

Appeal from Superior Court, Suffolk County.

Bill by one Woodbury and others against the Sparrell Print and others. From a decree for plaintiffs, defendants appeal. Reversed.Wm. H. Brown, for plaintiffs.

G. C. Abbott, for defendants.

KNOWLTON, C. J.

This is a bill in equity, brought under Rev. Laws, c. 159, § 3, cl. 8, to reach, and apply in payment of a debt, property alleged to have been fraudulently conveyed by the debtor with intent to defeat, delay, or defraud his creditors. The defendants filed a demurrer, which was sustained in part and overruled in part, and the case comes before us on the defendants' appeal from the order overruling a part of the demurrer, and from the final decree for the plaintiffs which overruled exceptions taken by the defendants at the hearing before the master.

The plaintiffs' principal claim is for rent accruing under a lease for a term of years, and the defendants' first ground of demurrer is that the statute does not apply to a case in which the debt accrued after the conveyance was made. But it is familiar law that a conveyance fraudulent under St. 13 Eliz. c. 5, as against existing creditors at the time of its delivery, may also be avoided by subsequent creditors. Parkman v. Welch, 19 Pick. 231;Livermore v. Boutelle, 11 Gray, 217, 71 Am. Dec. 708. On the allegations of the bill, a demurrer on this ground cannot be sustained.

One of the provisions of the lease on which plaintiffs' claim is founded is as follows: ‘And in case of such determination [of the lease by the lessors for a breach of the covenants], the lessee shall be liable to the lessors for all loss and damage sustained by the lessors on account of the premises remaining unleased, or being let for the remainder of the term for a less rent than that herein reserved.’ The second ground of demurrer is that the claim in the bill is for ‘rent and for loss of rent.’ This stipulation is an agreement, which is binding as a contract in the nature of a covenant, to pay the lessors the amount of their loss or damage on account of the premises remaining unleased after a determination of the lease for a breach of the covenants. It also includes an agreement to pay for the loss, if any, on account of the premises being let at a less rent for the remainder of the term. The liability thus created is as much contractual as the obligation under the covenant to pay the rent monthly. The only difference is that the amount is unliquidated; and this brings us to the question whether the word ‘debt’ in Rev. Laws, c. 159, § 3, cl. 8, which is used also in the same way in clause 7 of this section, is to be given a narrow, technical meaning, or is used in a broad sense to include ordinary obligations founded on contract, when the amount due has not been definitely ascertained. We are of opinion that in this statute it is used in its broad sense. There is no reason why a liability founded on a judgment, or a formal covenant, or an instrument under seal, should in legal effect be any different, in regard to a fraudulent conveyance by the debtor, from other kinds of contractual liability, even if the amount to be paid is unliquidated. In Mill Dam Foundry Company v. Hovey, 21 Pick. 417-455, Chief Justice Shaw said, in reference to a statute which imposed upon stockholders of corporations a liability for its debts: ‘Though a question was made whether such a claim for unliquidated damages is a debt within the meaning of the statute, we do not think it admits of a reasonable doubt that all such claims for damages were intended to be included in the term ‘debts.” So in Gray v. Bennett, 3 Metc. 522-526, the court said, in construing an act for the relief of insolvent debtors, that ‘the word ‘debt’ is of large import, including not only debts of record, or judgments and debts by specialty, but also obligations arising under simple contract, to a very wide extent, and in its popular sense includes all that is due to a man under any form of obligation or promise.' See, also, Atlas Bank v. Nahant Bank, 3 Metc. 581, 582;Wyman v. American Power Co., 8 Cush. 168-182;Stratton v. Hernon, 154 Mass. 310, 28 N. E. 269;Nichols v. Eaton, 91 U. S. 716, 725, 23 L. Ed. 254; Frazer v. Tunis, 1 Bin. (Pa.) 254; New Haven Steam Sawmill Co. v. Fowler, 28 Conn. 103, 108; Haynes v. Brown, 36 N. H. 545;Fisher v. Consequa, 2 Wash. (C. C.) 385, Fed. Cas. No. 4,816;Stiff v. Fisher, 2 Tex. Civ. App. 346, 21 S. W. 291. We are of opinion that a claim for loss of rent under the agreement is a debt within the meaning of this statute.

The third ground of demurrer is that the defendants' claim is not stated with sufficient certainty. The averment is that the defendants ‘owe them for accrued installments of rent, and for loss of rent, under the covenants of said lease, the sum of $1,762,50 * * * according to the account hereto annexed.’ The account annexed contains a charge of an item on the first day of each month in the words, ‘Installment due under lease, $212.50.’ Upon the findings of the master, the loss of rent from month to month after the determination of the lease was the same in amount as the rent itself before its determination. While the averment would have been...