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Report from supreme court, Hampden county; John A. Aiken. Judge.

Petition of the Guuning System and others to be admitted as plaintiffs to an action by George A. Graves and others against E. Morgan and others. Decrees admitting petitioners as plaintiffs were entered, and the petitions were reported for consideration of the full court. Affirmed.

Wallace R. Heady and Knight & Brewster, for petitioners. Chas. H. Beckwith, for defendants.

BARKER, J. Each of the petitioners is in a similar position. Each has signed and delivered a writing not under seal, thereby assenting to the terms of an indenture, called in the instrument of assent an "assignment,” bearing date May 24, 1901, and executed by the president and treasurer of the Bullard Camera Company and assignee under a vote of the company to assign for the benefit of its creditors all of its property to said assignee. The indenture was tripartite, with the company as party of the first part, the assignee as party of the second part, and as parties of the third part such creditors of the company as should assent in writing to its terms, either by signing the indenture, or by signing and delivering to the assignee any other writing expressing an assent to the terms of the indenture. Each of the petitioners and divers other creditors of the company has signed and delivered to the assignee a writing stating that the signer thereby assents "to the terms of the assignment of the Bullard Camera Company to you, dated May 24, 1901." No creditor has signed the indenture itself. One of its terms is that the "parties of the third part do hereby severally and respectively, each and every one of them, release, acquit, and forever discharge said party of the first part from all such claims, debts, and demands, excepting as hereinafter provided, viz.: And provided, further, that no party of the third part holding security shall or does hereby release or impair or in any manner affect his right to such security." The bill to which the petitioners ask leave to be admitted as parties plaintiff is brought by an execution creditor of the company to enforce against the defendants, as its officers, a joint and several liability for its debts under the provisions of Rev. Laws, c. 110. The answers to the petitions deny the right of the petitioners to be made parties to the bill, on the ground that they are not creditors of the company, and have released and discharged it by assenting to the terms of the indenture of May 24, 1901. No replications have been filed, and in this state of the pleadings the petitions have been heard upon the evidence of the parties by a judge of the superior court, who has entered decrees to the effect that the matters answered

and offered in defense by the respondents do not bar the petitioners from being admitted as parties plaintiff to the bill, and admitting each of them as a plaintiff to prosecute the suit. The judge who entered the decrees, being of opinion that they so affect the merits of the controversy that the matter ought to be determined by the full court before further proceedings, has reported the petitions to us, and by the terms of his report the decrees, if right, are to be affirmed; otherwise the petitions are to be dismissed.

There is no report of the evidence, save a statement that the respondents offered in evidence the matters set out in the report. It states that the indenture was recorded on May 25, 1901, in the clerk's office of the city of Springfield, and that on or about that day the assignee sent to all the creditors identical communications, consisting of a circular letter, a statement of the financial condition of the company, and a printed form of assent, and that in response he received assent slips signed by each of the petitioners. None of them had then seen the indenture of May 24th, or any copy of it, and none had any further information or knowledge about it than was contained in the circular letter. After the receipt of the slips by the assignee, the petitioners sent their claims to local attorneys to prosecute them against the company, and, upon learning the facts set out in the bill in equity, directed the bringing of these petitions to join in the bill. The original plaintiffs in the bill were judgment creditors, and entitled to bring it. There are other creditors of the company who have signed similar slips, and the report finds that all signatures of assent were obtained by the same method, and given in the same manner, and upon the same information conveyed as had been stated with reference to the petitioners. Up to the time of the hearing on the petitions, nothing had been paid or tendered to any of the creditors under the assignment, and no dividend had been declared under it, but the assignee was then ready to declare a first and final dividend of less than 10 per cent.

We are of opinion that the decrees entered properly could be made upon the pleadings and the facts stated in the report. Whether the indenture was or was not under seal, does not appear. The written assents signed by the petitioners were simple contracts, which they could rescind for fraud; and, if they constituted an obstacle to the petitioners becoming parties plaintiff to the bill, it might be found that the bringing of the petitions was a recession of the assents. may lie in suppression or concealment. The situation of the company, of the assignee, and of the assenting creditors is to be taken into account. The request for the assents came from the assignee, and in asking for it he held himself out simply as a trustee appointed by

Fraud

the company to take its property for the
benefit of its creditors. The circular letter
stated his appointment to be such a trus
tee, and that it was his purpose to convert
the assets of the company into cash, and pay
the creditors the proceeds, to be divided pro
rata, and asked the early co-operation of the
creditors, by executing and returning the as-
sents at their earliest convenience. It con-
tained no intimation of any release of the
company from the claims of the creditors,
nor any statement from which it could be
inferred that such a release was one of the
terms of the proposed arrangement. It did not
state that there was an indenture of three par-
ties, one of which was the company; another,
the assignee; and the third, the assenting
creditors. With reference to any instrument
it said only that, in consequence of the crisis
in the financial affairs of the company, it
had been "deemed best to appoint a trustee,
and assign the property of the company to
him for the benefit of the creditors," and
that it was "the purpose of the trustee to
convert the assets of the company into cash,
and pay the creditors the proceeds, to be di-
vided pro rata." Nor did the form of assent
purport to be an assent to a release of the
company, nor to anything more than to the
terms of an assignment from the company
to the writer of the circular letter. In the
light of the situation as it was known to the
company and to the assignee, and of the ac-
tual tenor of the indenture, which was much
more than an assignment by the company of
its property for the benefit of its creditors,
we think the omission of all statement of and
of all reference to the release of the company
from its debts could be found to be a sup-
pression and concealment of material facts
which the assenting creditors had a right to
have disclosed to them when asked to sign
the assent, and which, not being disclosed,
they well might suppose not to exist. The
statement of the circular that "any further
information will be furnished upon applica-
tion" was not enough to bar them from re-
scinding their contracts of assent when they
were informed of their true nature and extent.
That statement is to be read with the infor-
mation explicitly conveyed, that the instru-
ment to which assent was asked was an as-
signment of the property of the company for
the benefit of its creditors, and the suppres-
sion of the fact that it contained a release of
It seems to
the corporation from its debts.
us that the bringing of these petitions upon
obtaining knowledge of the true situation was
a sufficient rescission of the implied contract
to release the company. The circular letter,
with its partial and fragmentary statements,
containing no intimation of a release of the
company from its debts, and so drawn as to
lead naturally to the inference that the in-
strument to which it asked assent was mere-
ly a conveyance of property in trust for the

benefit of creditors, was also a communication from a person in the position of a trustee to persons whom he was asking to become beneficiaries of his trust, and this proposed relation called for a full and complete disclosure of all material facts known to the proposed trustee, and of which the creditors might be and were in fact uninformed.

Holding these views, we find it unnecessary to consider the effect of the proviso of the indenture which states that no creditor holding security shall or does by the indenture release or impair or in any manner affect his right to such security. If, as is possible, the construction which we have given to the report is not that intended by the judge who entered the decrees, such course can be taken in the superior court as will do justice between the parties. Decrees affirmed.

SAWYER et al. v. COMMONWEALTH.
(Supreme Judicial Court of Massachusetts.
Worcester. Oct. 30, 1902.)
EMINENT DOMAIN-INJURY TO BUSINESS-AS-
SESSMENT OF DAMAGES-RIGHT
TO JURY TRIAL.

1. Injury to established business, in consequence of carrying out the metropolitan water supply act (St. 1895, c. 488), is not an appropriation of property under the right of eminent domain, for which the constitution requires that compensation shall be made.

2. The metropolitan water supply act (St. 1895, c. 488, § 15), providing that any person whose "property is taken under the right of eminent domain or entered upon or injured." if dissatisfied with the determination of the damages assessed by a commission, may claim a trial by jury, does not confer upon petitioners for the assessment of damages to an established business, in consequence of carrying out the metropolitan water supply act, the right to a jury trial their "business" not being "property," under the act.

Barker, J., dissenting.

Case reserved from supreme judicial court, Worcester county; John W. Hammond, Judge.

Petition by Henry O. Sawyer and others, doing business under the firm name of H. O. Sawyer & Co., against the commonwealth, for the assessment of damages caused by the metropolitan water board acting under the metropolitan water supply act. Motion, on the hearing of the report of the commissioners appointed to assess the damages, by the petitioners for a jury trial. Motion reserved for the determination of the full court. Motion denied.

Thayer & Rugg, for petitioners. Arthur W. De Goosh, Asst. Atty. Gen., for the Commonwealth.

HOLMES, C. J. This is a petition for the determination of damages caused by a decrease in value of the petitioners' business, in consequence of the carrying out of the Metro

politan Water Supply act.

St. 1895, c. 488, § 14. After the decision in Sawyer v. Board, 178 Mass. 267, 59 N. E. 658, the case was referred to a commission upon the present petition, and the petitioners, being dissatisfied with the determination, again claim a trial by jury-this time under section 15 of the act. The material words are as follows: "Said water board, or any person whose property is taken under the right of eminent domain, or entered upon or injured by the taking of said water, if dissatisfied with any determination of damages made by any commission, may * claim a trial by jury," &c. The question is whether the petitioners come within these words, and have the right which they claim.

3 Allen, 133, 142; Edmands v. City of Boston, 108 Mass. 535, 549; Cobb v. Same, 109 Mass. 438, 444; Maynard v. City of Northampton, 157 Mass. 218, 31 N. E. 1062; Williams v. Com., 168 Mass. 364, 366, 47 N. E. 115; Railroad Co. v. Blacker, 178 Mass. 386, 392, 59 N. E. 1020. See Stadler v. City of Milwaukee, 34 Wis. 98; Coster v. Mayor, etc., 43 N. Y. 399; In re Mt. Washington Road Co., 35 N. E. 134, 147; Moses v. Sanford, 11 Lea, 731; Fuller v. Edings, .11 Rich. Law, 239; Eddings v. Seabrook, 12 Rich. Law, 504; Ricket v. Railway Co., L. R. 2 H. L. 175; Board v. McCarthy, L. R. 7 H. L. 243; Lewis, Em. Dom. (2d Ed.) §§ 147, 487. See, also, Butchers' Slaughtering & Melting Ass'n v. Com., 169 Mass. 103, 118, 47 N. E. 599.

Assuming that the petitioners have no right under the Constitution, we have only to construe the statute in a natural way. The words which we have cited seem to us inapt to give the right which the petitioners claim.

A majority of the court is of opinion that the petitioners are not entitled to a jury. If indeed the loss which they have suffered were within the protection of the Constitution, there would be the strongest reason for construing the statute as giving them whatever rights Their business is not "taken under the right the Constitution secures (compare Salem of eminent domain," or alleged to be. It Turnpike & C. Bridge Corp. v. Essex Co., 100 could not be "entered upon." It is not "inMass. 282, 286, 287; Gen. St. c. 48, commis- jured by the taking of said water." Its valsioners' note; Bauman v. Ross, 167 U. S. 548, ue is decreased by the carrying out of the 593, 17 Sup. Ct. 966, 42 L. Ed. 270; Lewis, act, that is, we presume, by the occupation Em. Dom. [2d Ed.] § 311), but it hardly would of the land where it was carried on and the be contended that the Constitution is concern- adjoining land where customers dwelt,-mated. It generally has been assumed, we think, ters quite different from those mentioned. that injury to a business is not an appropria- Their business is not "property" within the tion of property which must be paid for. meaning of the act, unless it be held that the There are many serious pecuniary injuries statute gives it the character of property by which may be inflicted without compensation. providing compensation, and thereupon in secIt would be impracticable to forbid all laws tion 15 uses the word in a looser and broader which might result in such damage, unless sense than that in which it had used it bethey provided a quid pro quo. No doubt a fore. In sections 12, 13, "property" seems to business may be property in a broad sense of be used with what may be called its constithe word, and property of great value. It tutional meaning, as was intimated in Sawmay be assumed for the purposes of this case yer v. Board, 178 Mass. 267, 270, 59 N. E. that there might be such a taking of it as re- 658. Moreover we may notice for what it is quired compensation. But a business is less worth that the remedy given to the petitiontangible in nature and more uncertain in its ers by section 14 is to have their damages devicissitudes than the rights which the Consti- termined in the manner "herein before" protution undertakes absolutely to protect. It vided. That which they claim is provided seems to us, in like manner, that the diminu- thereinafter in section 15. It seems to us tion of its value is a vaguer injury than the that the provision relied upon plainly corretaking or appropriation with which the Con- sponds to the first part of section 14 and has stitution deals. A business might be destroy- nothing to do with the petitioners, who come ed by the construction of a more popular in by an afterclap at the end of the section. street into which travel was diverted, as well The statute has provided for ordinary constias by competition, but there would be as lit- tutional rights in sections 12, 13, including tle claim in the one case as in the other. See a jury trial. Then in section 14 it gives a Smith v. City of Boston, 7 Cush. 254; Stan- commission to certain owners of real estate wood v. Malden, 157 Mass. 17, 31 N. E. 702, taken or injured by the taking of the waters 16 L. R. A. 591. It seems to us that the case of the Nashua river, or directly or indirectly stands no differently when the business is de- decreased in value. It will be seen how stroyed by taking the land on which it was closely related the words of section 15 are to carried on, except so far as it may have en- the rights thus given. The rights dealt with hanced the value of the land. See Railroad are constitutional rights or very near to such, Co. v. Blacker, 178 Mass. 386, 390, 59 N. E. and the jury is preserved. But when the 1020. statute did an act of supererogation, however just, it did not enhance its gratuity by leaving it to be determined by a tribunal not peculiarly adapted to deal with the problems involved. It certainly did not do so with any clearness, and the petitioners' rights must

We believe that what we have said is in accord with the general understanding of the profession, although the cases sometimes cited for the proposition may not have gone far enough to decide it. Whitman v. Railroad,

be confined to what the statute distinctly says.

Motion denied.

BARKER, J. (dissenting). I am unable to agree with the opinion of the court. In my opinion, it was the intention of the legislature by St. 1895, c. 488, § 15, to give all parties aggrieved by the decision of a board of commissioners appointed under section 14 of the statute a right to claim a trial by jury to determine their damages. The metropolitan water board clearly has this right in every instance, whatever may be the nature of the claim against the commonwealth, and it is not to be presumed that the legislature gave to the representatives of the commonwealth the privilege of revising the award of the commissioners by a jury, and denied that privilege to the adverse party to the litigation. Further, I think that the words of the statute, "any persons whose property is taken under the right of eminent domain or entered upon or injured by the taking of said water," should receive a liberal construction in favor of the subject whose property is injured, and that within the meaning of section 15 any person whose property is injured by the operations carried on under the authority of the statute is a person whose property is "injured by the taking of said water."

KANE ▼. WORCESTER CONSOL. ST. RY.
(Supreme Judicial Court of Massachusetts.
Worcester. Oct. 30, 1902.)
STREET RAILWAYS-COLLISIONS-MISTAKE IN
JUDGMENT.

1. A mistake of judgment in driving off a street car track in the wrong direction, in an effort to avoid collision with an approaching car, will not necessarily preciude recovery for injuries received in the collision which follows.

Exceptions from superior court, Worcester county; Francis A. Gaskill, Judge.

Action by Kane against the Worcester Consolidated Street Railway. From a judg ment in favor of defendant, plaintiff brings exceptions. Exceptions sustained.

Charles T. Latman and William A. Gile, for plaintiff. Herbert Parker, Charles C. Milton, and Chandler Bullock, for defendant.

HOLMES, C. J. This is an action for personal injuries caused by a collision between a watering cart on which the plaintiff was driving and one of the defendant's cars. The plaintiff was driving on the right of the track and toward the car, with his left wheels inside the right rail. When he began to turn off the track he turned to the left, across the track, and his cart was struck. The case is here on exceptions to the instructions given and refused at the trial. We are embarrassed in dealing with the case by the fact that we cannot doubt that the presiding judge perfectly understood the rudimentary

principles of law which he was called on to state. Indeed he stated them in the course of his charge, and it may be that if we could have heard the trial we should have been satisfied that the jury were not misled. But on the question of the plaintiff's turning to the right or the left, upon which it was not denied that he had a right to go to the jury, the jury were told in various forms that a mistake of judgment on the plaintiff's part as to which was the safer course would prevent his recovery. This was an error, unless the judge was prepared to direct a verdict for the defendant. A choice may be mistaken and yet prudent. Exceptions sustained.

HOLYOKE ENVELOPE CO. v. UNITED STATES ENVELOPE CO.

(Supreme Judicial Court of Massachusetts. Hampden. Oct. 30, 1902.) CORPORATIONS-PROMOTION-CONTRACTS— PLEADING

1. A corporation cannot be a party to a contract made before its organization.

2. Plaintiff declared that it contracted with D. & S., agents of the defendant corporation, whereby plaintiff agreed that it would transfer its property and business to D. & S. or their appointee; that defendant became the appointee of D. & S., and on demand by defendant and D. & S. plaintiff had transferred its property to defendant, who had failed to make payments and accountings according to the time and conditions of the contract. At the date of the contract defendant was not yet organized as a corporation. Held that, the plaintiff not having alleged that the document was an alternative offer both to D. & S., to whom it was delivered, and to the contemplated corporation, which later accepted it, or that the defendant corporation, though not privy to the offer, later accepted the conveyance with knowledge of it, and with an express or implied undertaking to perform the conditions, the complaint did not state a cause of action. Appeal from superior court, Hampden county.

Action by the Holyoke Envelope Company against the United States Envelope Company. From a judgment sustaining a demurrer to the complaint, plaintiff appeals. Affirmed.

Plaintiff's amended declaration was as fol

lows:

Plaintiff alleged: "That it entered into a contract in writing * with Dean & Shibley, agents of the defendant, and whose appointees under and within the meaning of said contract the defendant became, to sell to said Dean & Shibley or their appointees, 'all its real estate situated in Holyoke, machinery, stock of all kinds, manufactured and unmanufactured, tools, pulleys, patterns, shafting, boilers, office furniture, and such other appliances and appurtenances now in use and necessary for the conducting of its business, as at present, contained in their buildings in said Holyoke; and all its busi

1. See Corporations, vol. 12, Cent. Dig. § 1791.

ness and good will as a going concern,' etc.,for a valuable consideration therein expressed. That the defendant was the appointee of said Dean & Shibley under said contract, and at the demand and request of it and of said Dean & Shibley the plaintiff conveyed to said defendant all the real and personal estate it then owned in said Holyoke, and all property so agreed to be conveyed in said contract, and in entire compliance therewith and with the terms thereof obligatory upon it, the plaintiff, to perform. And said business became the property of said defendant from and after December 31, 1897. That in pursuance of the conditions of said contract the plaintiff has delivered to the defendant all matters and things therein required, and has performed all the conditions and agreements of said contract on its part to be performed. That all things have happened and been done, and all times elapsed, to entitle the plaintiff to maintain this action for the breach thereof hereinafter alleged, and that nothing has happened or been done to prevent it from maintaining the same; but the defendant has neglected and refused to perform the conditions and agreements of said contract on its part to be performed, and has failed to make all proper accountings and adjustments and payments as it agreed and covenanted to do in said contract. Whereby, and by reason whereof, the plaintiff says that the defendant owes it the sum of thirty thousand eight hundred and seventy-nine dollars and seventeen cents."

The agreement was in part as follows: "Whereas, Dean & Shibley, of Providence, Rhode Island, have proposed the consolidation of the properties, business, and good will of the Springfield Envelope Company, the White, Corbin & Company, the Whitcomb Envelope Company, Plimpton Manufacturing Company, the Morgan Envelope Company, Holyoke Envelope Company, Logan, Swift & Brigham Envelope Company, W. H. Hill Envelope Company, P. P. Kellogg & Company, and National Envelope Company, either by the formation of a corporation to take over the same, or by such other plan as shall be found practicable, and have undertaken, as bankers and brokers, to negotiate the consolidation aforesaid: Now, therefore, in consideration of one dollar, paid by said Dean & Shibley, and of their agreement to give said undertakings their further attention and effort, the undersigned hereby agrees, subject to the conditions herein stated, as follows: It will sell and convey to such new company, or to said Dean & Shibley and their associates or appointees, all its real estate situated in Holyoke, machinery, stock of all kinds, manufactured and unmanufactured, tools, pulleys, patterns, shafting, boilers, office furniture, and such other appliances and appurtenances now in use and necessary for the conducting of its business, as at present, contained in their buildings in said Holyoke, and all its business and good will as a going

concern, taking payment therefor such sum of money in cash as the Audit Company of New York, or its appointee, acting as appraiser in the premises, shall determine in their or his opinion a fair value therefor, plus fifty per cent. thereof, plus ten per cent. of the aggregate amount of the determined value and fifty per cent. addition, which ten per cent. shall not be less than sixty-two thousand six hundred (62,600) dollars: provided, always, that the value determined as aforesaid, and exclusive of the fifty per cent. and ten per cent. additions, shall not be less than four hundred and seventeen thousand three hundred and thirty-three and 33/100 (417,333.33) dollars."

The alleged contract further recited plaintiff's agreement to make all necessary conveyances, etc., and the conditions of time, payment, etc., imposed on defendant.

The defendant demurred, and assigned specially as the cause of demurrer "that said amended declaration does not set forth a legal cause of action, it not appearing therein that the defendant was a party to the agreement set forth in said declarations; but it expressly appearing that it was not such a party, and was not bound by any of the provisions in said agreement contained."

E. H. Lathrop, for plaintiff. Long, for defendant.

Chas. L

We as

HOLMES, C. J. The document declared on discloses no signature and does not indicate that a signature by any one other than the plaintiff was contemplated. We assume however that at its date it was at least a parol offer on the plaintiff's part. sume further that at that time the defendant corporation had not been created. This is stated very candidly by the plaintiff and the contrary does not appear from the count. Under such circumstances, if the alleged contract was made at its date the defendant could not be a party to it. Abbott v. Hapgood, 150 Mass. 248, 252, 22 N. E. 907, 5 L. R. A. 586, 15 Am. St. Rep. 193; Match Co. v. Same, 141 Mass. 145, 7 N. E. 22.

If

Two possible modes occur to us in which the defendant could be made liable either on the document or according to its terms, It may be that, construed with reference to the facts, the document was an alternative offer, both to Dean & Shibley to whom it was delivered, and also to the corporation contemplated by it as possibly to be formed. the words "It will sell and convey to such new company" be taken to have addressed the new company when it came into being and if the company then accepted the offer, there is no trouble in holding the latter to the stipulations in the plaintiff's favor. Ferry Co. v. Balch, 8 Gray, 303, 311. On the other hand if the defendant was not privy to the offer it may have contracted later according to its terms. There are indications that the defendant was not privy to the of

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