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by dealers, and mislead the public, is a finding 6. SAME. of fact which must stand unless it is plainly
In an action by an assignee in insolvency,
where the evidence shows a payment through wrong. The evidence on which the finding
an agent of a note fully secured by collateral, was made is not all before us. It does
which was surrendered on the payment being not appear that the finding is wrong. The made, a ruling of law as to the effect of knowldefendant cannot seriously suffer from it,
edge of an agent of a creditor in receiving a
preference is not applicable. as the word "Creamalt" was coined by the
7. SAME. plaintiff as a name for its bread, and there
In an action by an assignee in insolvency, is nothing to show that there was any reason evidence of a payment by an agent of the insolfor the adoption by the defendants of the vent of a note indorsed by the insolvent, the
payment being made when the maker was solvname "Crown Malt," except its similarity
ent and when it was not known that he would to the name adopted by the plaintiff. In be unable to pay it at maturity, does not review of what we have stated, it is unneces- quire a ruling of law as to the effect of knowl
edge of the creditor's agent in receiving a prefsary to consider the defendants' exceptions
erence. particularly. Many of them are to findings
8. SAME. of fact by the master, upon evidence which
In an action by an assignee in insolvency, is not reported. The plaintiff is entitled where the evidence tends to show that a creditor, to an injunction, the terms of which will be on information furnished by a third person, re
ceived a stock of goods from the insolvent for fixed by a single justice, and to an assess
less than their real value, a ruling of law as to ment of damages.
the effect of knowledge of a creditor's agent in Decree accordingly.
receiving a preference is applicable.
In an action by an assignee in insolvency,
where the only preference shown to have been (191 Mass. 415)
received by a creditor was the payment of a JAQUITH V. DAVENPORT. SAME V. note indorsed by the insolvent, the payment RICO. SAME V. MORRILL.
being made while the maker was solvent, a
ruling of law that, where part of the purpose (Supreme Judicial Court of Massachusetts. of a conveyance to a creditor is fraudulent, the Suffolk. April 9, 1906.)
whole is void, is not applicable. 1. INSOLVENCY-ACTION BY ASSIGNEE-FIND- 10. SAME.
In an action by an assignee in insolvency, ING-CONSTRUCTIONS.
In an action by an assignee in insolvency, where there was evidence that a creditor rea statement that the court did not find, as a
ceived a stock of goods from the insolvent at fact, that the sale of goods and payments by considerably less than their real value, a ruling
that, where part of the purpose of a conveyance the insolvent were made in fraud of the laws relating to insolvency, is not to be construed as to a creditor is fraudulent, the whole is void, is
applicable. a finding that the sales and payments were not made by the insolvent with the necessary
11. TRIAL-DECISION-EFFECT OF ALTERNAintent, but as finding that they were not made in TIVE RULINGS. fraud of the laws; that is, with the necessary
Where a decision rests on one of two alterintent on the part of the insolvent, and the natives, one considered under a correct ruling,
and the other under an incorrect one, the denecessary reason to believe on the part of the creditors.
cision cannot be sustained. 2. PRINCIPAL AND AGENT-KNOWLEDGE OF
Exceptions from Superior Court, Suffolk AGENT.
If a preference is obtained from an insol- County ; Wm. B. Stevens, Judge. vent for a creditor by his agent, or if a con- Actions by one Jaquith, assignee in insolveyance fraudulent under the insolvency stat
vency, against Davenport, Rico, and Morrill. ute is made to a creditor with knowledge of the
Findings for defendants and plaintiff excepts. fraud on the part of an agent acting for him, he is bound by the agent's knowledge and in- Exceptions overruled in the action against tent.
Rico. Exceptions sustained on the second, 3. INSOLVENCY-PREFERENCES TO CREDITORS- third, fourth, fifth, and sixth counts in the FRAUD IN PART.
action against Davenport. Exceptions susWhere any part of the purpose of a sale
tained in the action against Morrill. or conveyance by an insolvent to a creditor is fraudulent, the whole is void.
H. J. Jaquith and Wm. Reed Bigelow, for [Ed. Note.—For cases in point, see vol. 28, Cent. Dig. Insolvency, § 83.]
plaintiff. Chas. W. Bartlett, Elbridge R.
Anderson, Arthur T. Smith, and Fred C. 4. TRIAL-HEARING BY COURT-RULINGS OF LAW.
Gilpatric, for defendants. On trial by the court, a party asking a ruling correct in law has a right to know LORING, J. These are three
three actions whether in deciding the case against him the
brought by an assignee in insolvency of a judge acted on the rule of law stated. 5. INSOLVENCY-ACTION BY ASSIGNEE-RUL
firm made up of one Davis and one Hathaway, ING OF LAW-APPLICABILITY TO EVIDENCE. to recover for goods sold and payments made
In an action by an assignee in insolvency in violation of the insolvency laws. The inagainst a creditor to recover preferences, where
solvency petition was an involuntary one, and the evidence shows sales and payments by an agent of the insolvent to the creditor, which were
was originally filed on April 25, 1896, against applied on an amount loaned by the creditor Davis alone. It afterwards was amended nominally to the agent, but really for the bene
to include the partnership, and the assignee fit of the insolvent, a ruling of law as to the effect of the knowledge and intent of an agent
was appointed assignee of the joint and separof the creditor in receiving a' preference is ap
ate estates of both partners. There was a plicable, and should be given.
prior involuntary petition against Hathaway
in Bristol county. But that does not enter into the matters on which the decision here depends. The case went to an auditor, who found in favor of the plaintiff in all three cases for some of the matters complained of. In the action against Davenport he found for the plaintiff on counts 2 and 3 for two sales of cigars. One lot worth $1,890 was sold on March 11, 1896; the other, worth $1,390, was sold on March 31, 1896. He also found for the plaintiff on counts 4, 5, and 6, for the payments of $61.02 on November 1, 1895, $60 on November 3, 1895, and $300 on December 12, 1895. The other count (count 1) against Davenport was waived. In the action against Rico he found for the plaintiff on count 1 for the sale of 5 bales of tobacco on February 28, 1896, worth $1,999.92, and he found for the defendant on counts 2, 3, and 4, in which the plaintiff undertook to recover from Rico three payments of $400 each, made by Davis to Rico, on January 11, 1896. He also found for the defendant on counts 7 and 9 for the payment to Rico, on or about April 25, 1896, of a note for $150 made by one Torrey and indorsed by Davis. The eighth count was for the same cause of action and was inserted as a matter of pleading only. In the action against Morrill he found for the plaintiff for the sales of two lots of cigars; one lot on February 25, 1896, worth $2,562.50, the other on March 10, 1896, worth $3,040. The cases were heard in the superior court by a judge sitting without a jury, who found for the defendant in each case, and made no further finding, except that, in refusing a ruling as to the effect of the insolvency proceedings in Bristol against Hathaway alone, he stated that this ruling became immaterial, because he "did not find as a fact, upon all the evidence, that the sale of the goods and the payments were made in fraud of the laws relating to insolvency."
The plaintiff asked for the following rulings, among others, in all three cases : The defendants are bound by the knowledge and intent which their agents had, and if any preference was obtained for any defendant by an agent, attorney, or representative acting for him in the transaction, or if any conveyance fraudulent under the insolvency statute was made to any defendant, with a knowledge of the fraud on the part of any agent, attorney, or representative in the transaction acting for him, the defendant is bound by the agent's knowledge and intent.” “(4) If any part of the purpose of any sale or conveyance to any of these defendants, from the insolvent debtors represented by the plaintiff, was fraudulent, the whole was void.” The judge declined "to rule in accordance with the third request and the fourth in the terms given.” If the special finding made in connection with the ruling asked as to the effect of the insolvency proceedings in Bristol is to be interpreted to mean that he did not find that the insolvents made the sales
and payments with the necessary intent, the third and fourth rulings were immaterial. But we do not think that that is the true meaning of that finding. It is in terms a finding that the sales and payments were not made in fraud of the laws; that is to say, with the necessary intent on the part of the insolvents, and 'the necessary reason to believe on the part of the defendants. The correctness of this conclusion is borne out by the fact that the judge did not refuse the third and fourth rulings asked for on the ground on which he refused the eighth, namely, that the finding made them immaterial. Both rulings requested were correct statements of law. As to the third ruling, see Bush v. Moore, 133 Mass. 198; Saunders v. Russell, 171 Mass. 74, 50 N. E. 463; Hill v. Marston, 178 Mass. 285, 286, 59 N. E. 766; Atlantic Mills v. Indian Orchard Mills, 147 Mass. 268, 17 N. E. 496, 9 Am. St. Rep. 698. As to the fourth ruling, see Crafts V. Belden, 99 Mass. 535; Peabody v. Knapp, 153 Mass. 242, 243, 26 N. E. 696; Hill v. Marston, 178 Mass. 285, 287, 59 N. E. 766. The parties are not agreed as to the proper construction of the statement in the bill of exceptions as to the way these two rulings were dealt with by the judge. The plaintiff's contention is that the third ruling was refused absolutely, and the fourth in the terms stated. The defendants' contention, on the other hand, is that both were refused in the terms stated. If it were material, we should agree with the plaintiff; but in our opinion it is not material. The rulings were right and if applicable to the case should have been given, certainly in substance. In our opinion (on grounds which we shall state later on) the rulings were applicable in the Davenport and Morrill cases. That means that, in deciding the facts in these two cases, the judge should have proceeded under the rules laid down in these two rulings respectively. The plaintiff, on asking for a ruling which is correct in law and is applicable to the case to be tried, has a right to know whether in deciding that case against him the judge did or did not act under the rule of law stated in the ruling asked for. The judge here does not state whether he did or did not act under it, when he says that he declined to give it in the terms stated, and does not state what ruling he adopted. The case does not come within the rule applied in Schendel v. Stevenson, 153 Mass. 351, 355, 26 N. E. 689, relied on by the defendants. It remains to consider whether these rulings were applicable to the cases tried.
Dealing first with the third ruling. In the action against Davenport, the plaintiff's case was, in substance, that in 1893 Davis and his then partner, Chard, who were dealers in cigars and tobacco, failed. At that time one Oliver, a cigar broker, borrowed over $10,000 of the defendant Davenport to "settle" the affairs of Davis and Chard.
Beginning in October or November, 1895, and down to the insolvency in April, 1896, Davis and Hathaway, through Oliver, who acted as their agent in carrying on their partnership affairs, bought and sold cigars and tobacco with the proceeds of notes signed by Hathaway or by Davis & Co., and indorsed by Hathaway. Hathaway's credit in the beginning was good. Davis was insolvent throughout. The auditor found that the two lots of cigars sold to Davenport were bought by Oliver with the proceeds of notes, as above stated; also that, although the defendant testified that he bought these cigars through Oliver of one Von Der Heide, as owner, who was a clerk of Oliver's, and who claimed also to have been a dealer on his own account, carrying on his business in Oliver's store, the sale was really a sale by the partnership to Davenport; Von Der Heide's name being used as a cover. The cigars were found to be worth $1,870 and $1,390, and were sold for $1,160 and $1,000, or about 66 per cent. of their true value. Davenport died after the hearing before the auditor, and his deposition was read at the trial. He testified that he bought the cigars as the goods of Von Der Heide, through Oliver as a broker, and that "he did not know where the goods in counts 2 and 3 of the declaration in his case came from, and did not inquire, and that he had no occasion to make any inquiry of the sort”; that he paid for both lots by checks payable to Von Der Heide, which were indorsed to Oliver and by Oliver deposited in the bank. The three payments in the Davenport case are not intelligibly described anywhere in the bill of exceptions, except in the testimony of Davenport, and we assume that that statement of them is correct. The $61.02 paid on November 1, 1895, was a payment made by Davis & Co. in settlement of a note for $59.50, signed by one Kelman, payable to Davis & Co., protested at maturity, and finally paid by Davis & Co., with protest fees of $1.50 on the date named. Davenport testified that the note was received by him from Oliver, with the understanding that Oliver was to be credited with the proceeds; "and that Oliver was at this time indebted to him (Davenport). The payments of $60 and $300 were received in settlement of Davis & Co.'s indorsements of two other notes payable to them, and received by Davenport from Oliver on the same terms. The auditor found that these payments were credited on the debt due to the defendant by reason of the $10,000 lent Oliver to "settle" Chard & Davis's affairs in 1893; that these notes "were all paid by checks of Davis at a time when he was insolvent or in contemplation of insolvency, and were paid with a view to preferring a creditor or a person under liability for him; that the defendant knew, or had reasonable cause to believe, that Davis was so insolvent or in contemplation of insolvency; and that the payments were made in fraud of the insolvency laws.” On this evidence the
judge would be warranted in finding that in the two sales and the three payments Oliver was getting payment for Davenport for the $10,000 lent by Davenport to "settle" the affairs of Chard & Davis, although nominally lent to Oliver; and the third ruling requested was applicable.
The case made out by the plaintiff in the second, third, and fourth counts of the action against Rico was that in October or November, 1895, to accommodate Oliver, and without receiving payment therefor, Rico swapped three notes for $400 each, with Davis & Co. Rico's notes were not secured. Davis & Co.'s were secured by 50,000 cigars. Rico paid his notes at maturity. When Davis & Co.'s notes fell due, the auditor found that Rico "knew of Davis & Hathaway's impending insolvency.” In spite of that knowledge Rico accepted from Davis payment of the notes. The auditor finds that "the collateral was returned to Oliver and subsequently sold to pay for Davis' debts.” The auditor also found "that the insolvent's assets were not diminished, and no harm accrued to any creditor through such a transaction.” We do not see how the third ruling asked for was applicable to this case. The exceptions to the fifth, sixth, tenth, and eleventh counts were waived at the argument. This leaves the seventh and ninth. The statement of this claim made by the auditor is as follows: This “count was to recover payment of a note of one Torrey, indorsed by Davis, which Rico received from Oliver in the course of business. I find that this was paid by the check of Davis at a period when Davis was in contemplation of insolvency, and Rico had reason to
reason to know it; that Torrey had became insolvent in the meantime. I am unable to find that, at the time Rico took this note, it was known to him or intended by Davis as a fraudulent preference, and it was not known then, for all that appeared before me, that Torrey could not pay it at maturity. I find that it was undoubtedly a preference to pay it, but I do not find that there was any fraudulent intent proven or any knowledge of such intent on the part of Rico, and I therefore find that the plaintiff ought not to recover on this count." The third ruling was not applicable here.
The case made out in the action against Morrill was that Morrill was a teamster, and met Hathaway and Oliver at the Hotel Reynolds; and, on being told by Oliver that Hathaway was overstocked with goods and needed to raise money, agreed that he would advance the money to pay for two lots of cigars; one worth $2,562.50, the other worth $3,040. What he paid did not appear, but it was found by the auditor to be "considerably below the real value." The auditor found that in the two sales to Morrill "Oliver was Morrill's agent and partner in the transactions." Although the evidence warranted a finding that this was not the fact, yet, report. The twenty-first ruling was rightly refused, and the twenty-second falls with it. The twentieth was waived.
The defendants have argued that the evidence warranted the finding that the cigars sold in the Davenport case, and the tobacco sold in the Morrill case, were the individual property of Hathaway; that the eighth ruling requested was wrong, and the findings on those counts can be supported on that ground; and they have made similar arguments in the other claims of the plaintiff. But a general verdict cannot be supported which rests on one of two alternatives, one of which is left to the jury under a correct ruling, and the other under an incorrect one.
The result is that in the several actions there must be the following entries:
In the action against Rico, exceptions overruled.
In that against Davenport, exceptions sustained on the second, third, fourth, fifth, and sixth counts.
In that against Morrill, exceptions sustained.
so far as we know, the judge may have found that Oliver was Morrill's agent and thought Oliver's knowledge immaterial. The exception to the refusal to give the third ruling in the Morrill case must be sustained on all four counts.
We come now to the fourth ruling requested. In the Davenport case it might well be found that the real purpose of all five transactions was to make payment to Davenport on account of the $10,000 borrowed by Oliver to "settle” Davis' previous insolvency. If it was, each transaction was wholly void. We do not see how it is applicable in the action against Rico. In the action against Morrill, it is plainly applicable, from what has been said as to the nature of that claim.
This brings us to the separate rulings requested in the Rico case. The seventeenth request was rightly refused. The evidence warranted a finding that the tobacco was not sold to Rico, but to one Miller, through Oliver, to whom Miller paid the purchase money, which was in turn paid by him to Hathaway by giving him credit for it on account. The tobacco was ultimately transferred to Miller by Davis on July 10, 1896, after the plaintiff's appointment as assignee, in whose name it turned out that it had stood in the custom house. If the judge believed that testimony the plaintiff's case against Rico for a conversion of the tobacco wholly failed. We find nothing in the cases relied on by the plaintiff (Burpee v. Sparhawk, 97 Mass. 312; Crafts v. Belden, 99 Mass. 535, 539; Copeland v. Barnes, 147 Mass. 388, 390, 18 N. E. 65; Hill v. Marston, 178 Mass. 286, 287, 59 N. E. 766) which conflicts with this. The twenty-third ruling requested was rightly refused. If the tobacco was not sold to Rico, but to Miller, and the transfer to him was not made use of, the fact that it was not in the usual course of business is immaterial. The eighteenth ruling asked for was rightly refused. There was no evidence that the three notes which were paid to Rico were paid out of the collateral. The only evidence is the finding of the auditor "that the Davis notes were paid by Oliver, or new notes of Von Der Heide's were given for them, and the collateral was returned to Oliver and subsequently sold to pay for Davis' debts."
The twenty-fourth ruling was rightly refused. The auditor found that the swapping of notes and payment of the Davis notes which released collateral did not diminish the insolvent's estate, and there was no evidence that it did. His conclusion that the plaintiff made out no case here was right. Clarke v. Second National Bank, 177 Mass. 257, 59 N. E. 121. The only ground on which the plaintiff argues that the twenty-first ruling should have been given is that Rico relied on Oliver in the matter. But that fact is not found by the auditor, and there was no evidence on the seventh and ninth counts except the auditor's
(191 Mass. 433) SHUTE V. BILLS et al. (Supreme Judicial Court of Massachusetts.
Suffolk. May 14, 1906.) 1. LANDLORD AND TENANT-DEFECTIVE PREM
ISES-HIDDEN DEFECTS-INJURIES TO THIRD PERSONS-KNOWLEDGE OF DANGER.
A third person, living with a tenant, cannot recover against the landlord for injuries sustained by an alleged hidden defect in the premises, in the absence of proof that the landIord knew, or should have known, of the existing danger.
[Ed. Note.--For cases in point, see vol. 32, Cent. Dig. Landlord and Tenant, $$ 669, 676, 679.] 2. SAME-COMMUNICATION TO TENANT.
Where a landlord discovers a hidden defect in the premises after the beginning of the tenancy, he is under no obligation to communicate such discovery to the tenant, 3. CUSTOMS AND USAGES—LANDLORDS–LIABILITY FOR OUTSIDE REPAIRS.
In an action by a third person living with a tenant against the landlord for injuries sustained by an alleged hidden defect in the outside of the premises, evidence was admissible to prove a custom or usage, in the city where the property was located, by which, when houses like that in question were leased to a single tenant at will, the landlord furnished the outside repairs. 4. LANDLORD AND TENANT – INJURIES
TO THIRD PERSON-EVIDENCE-FINDINGS.
In an action by a third person living with a tenant against the landlord for injuries sustained by an alleged hidden defect in the outside of the preinises, evidence held sufficient to support a finding that the landlord had assumed to repair such defects, that notice thereof had been given to the landlord's agent, and that the landlord, through the agent, had unsuccessfully undertaken to repair the defect. 5. SAME-NEGLIGENCE-EVIDENCE.
Where a landlord, who was bound to repair a leak in the gutters of the premises, attempted to make such repair, but the work was ineffectual to stop the leak, proof of such fact was sufficient to justify an inference that the work was negligently done.
6. CUSTOME AND USAGES-VALIDITY-LEASE v. Richards, 155 Mass. 381, 29 N. E. 591; OF PREMISES.
Cutter v. Hamlen, 147 Mass. 471, 18 N. E. Where a single dwelling house was rented to a tenant at will, a custom of the place where
397, 1 L. R. A. 429; Cowen v. Sunderland, the property was located, by which in the 145 Mass. 363, 14 N. E. 117, 1 Am. St. Rep. letting of such houses the landlord retained
469; Bowe V. Hunking, 135 Mass. 381, 46 control of the outside, yard, roof of house, etc.,
Am. Rep. 471; Minor v. Sharon, 112 Mass. was invalid. 7. LANDLORD
Even if the landlord
477, 17 Am. Rep. 122. AND TENANT - INJURIES TO THIRD PERSON-CONTROL OF PROPERTY-EVI- should discover such a defect after the beDENCE.
ginning of the tenancy, he is under no obliA landlord is not liable for injuries to a
gation to communicate it to the tenant. third person living with a tenant from a defect in the roof and gutter of the house leased,
Bertie v. Flagg, 161 Mass. 504, 37 N. E. 572. because of the landlord's retention of control The action cannot be maintained upon this of such roof and gutter, in the absence of proof ground. that the gutter did not remain in as good con
2. There was evidence from Mrs. Tabor dition as when the house was let.
that after she had moved into the house, Exception from Superior Court, Suffolk
"when the roof leaked and run down through County; Wm. Cushing Wait, Judge.
into the chambers, from the gutter on the Action by one Shute against one Bills and
front step," she spoke to the defendants' others. A verdict was directed for defend- agent about that, and he sent a man who put ants, and plaintiff brings exceptions. Sus
some new shingles and she thought pieces tained.
of tin on the roof and cleaned out some of Frank H. Noyes, for plaintiff. Frank N. the gutter. The defendants' agent also testiNay and Leon M. Abbott, for defendants.
fied that he had had repairs made on the
roof and the gutter, that the shingles of the SHELDON, J. The plaintiff with her hus- roof had been repaired and the gutter cleanband and mother occupied a one-family dwell- ed out and put in order. The plaintiff's husing house owned by the defendants and sit- band also testified that he saw a cleat which uated in Roxbury, the house being hired by had been nailed to the thick outer edge of her mother under a verbal arrangement with the gutter, but there was nothing to show the defendants' agent. Early in the morning
Early in the morning whether this was or was not there before of Sunday, December 8, 1901, while she was the beginning of the tenancy. The plaintiff's leaving the house by the front door, she mother also testified that the defendants' slipped upon the top step, fell and was in- agent promised when she hired the house to jured. It had snowed shortly before, and the do "aný repairing needed, anything within jury might have found that her fall was due reason.” The plaintiff also put in evidence to water having dripped during the day from against the objection and exception of the a leak in a gutter overhead and frozen after defendants that there was a known custom sunset, leaving a thin skimming of ice upon or usage in Boston by which when houses are the step. She claims to hold the defendants entirely let without any written lease to a for her injuries, on the ground that this leak
single tenant at will, the owner does the outin the gutter constituted a concealed defect side repairs, such as the roof and gutters existing at the time when the defendants let and conductors. We cannot say that this the house, which they then knew or should evidence was incompetent, or that such a have known, but of which they gave no in- usage, if the jury found its existence to be formation either to the plaintiff or to her proved, would be a bad one. See Pickering mother, the tenant; and also on the ground v. Weld, 159 Mass. 522, 34 N. E. 1081; Hutthat on its discovery after occupancy had chins v. Webster, 165 Mass. 439, 43 N. E. begun the defendants' agent was notified and 186; A. J. Tower Co. v. Southern Pacific Co., requested to repair it, but neglected so to do, 184 Mass. 472, 69 N. E. 348. Taking all the although bound to make such repairs by ex- evidence together, we think that the jury press contract and also by contract implied might have found that the defendants had from a general custom, by which they were assumed the obligation to make repairs, at bound to keep the roof and gutter in repair; any rate such outside repairs as might be
; and also upon the ground that the roof and needed in the roof and gutters; that notice gutter did not pass by the contract of let- of the alleged leak in the gutter had been ting, but remained in the control of the given to their agent, and that they, acting defendants; and that having undertaken to through their agent, undertook to repair this repair, the defendants repaired the roof and leak, but that in spite of the repairs which gutter in a negligent manner.
were made the leak continued as before. It 1. Assuming without deciding that there is true that the plaintiff herself testified was a leak in the gutter which might have that no repairs were made upon the gutter; been found to be a hidden defect, there was but the jury might have believed the testiabsolutely no evidence that its existence was mony of the defendants' agent upon this known or ought to have been known before the question. In that event, the defendants' lialetting to the defendants. But to sustain bility in this action would depend upon the action upon this ground it must appear whether or not the repairs upon the gutter that the defendant either knew or ought to were made negligently. "The general rule have known of the existing danger. Martin in this commonwealth must be considered