Court Opinion

ID: 6432498
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:09:31.383881+00
Date Added: 2024-06-11T15:52:15.331392
License: Public Domain

Braley, J.
The single justice found that, unless the bankrupt, to whose rights the plaintiff has succeeded, cotild obtain a transfer of the liquor license and of the innholder’s license from the defendant Potter, the remaining personal property enumerated in the contract of sale would be of no value to him. It was upon this mutual understanding, as he further finds, that the contract was entered into under which the partial payments of the price were made. The correlative finding, that the licenses “were the principal things contracted for,” makes their obtainment the main object or the essence of the contract. The licensing board having refused consent, thére was a failure of consideration which generally would entitle the buyer to rescind, and upon rescission to have the money advanced upon the purchase price refunded. Ballou v. Billings, 136 Mass. 307.
The defenses of waiver and abandonment were questions of fact, and may be dismissed, as the judge has found the conditions of sale to be “still in full force and effect.” Metropolitan Coal *371Co. v. Boutell Transportation & Towing Co. 185 Mass. 391. New York Central & Hudson River Railroad v. Chelsea, 213 Mass. 40, 45.
It is urged, that, the payments having been made pursuant to the contract, where no misrepresentations were made by the defendant, and the buyer knew of the uncertainty of procuring the board’s approval, such payments were voluntary. Hill v. Green, 4 Pick. 114. But this defense also is disposed of by the findings, that both parties throughout the negotiations relied on the expectation that eventually the licenses would be transferred, and that neither had actual knowledge until the event, that the action of the board would be adverse. Appleton Bank v. McGilvray, 4 Gray, 518.
The rule, moreover, that where a party pays what the law would not have compelled him to pay, but which in equity and good conscience he ought to pay, he cannot recover the payment back in an action for money had and received, is inapplicable where it is sought to recover amounts paid on a contract the consideration of which has wholly failed, or where-the plaintiff has a right to rescind because the defendant has failed to perform without fault on his part, or cannot perform. Sargent v. Adams, 3 Gray, 72, 81, 82. Homer v. Shaw, 212 Mass. 113. It may be in the present case that performance became impossible without fault of either party, but this would not confer on the defendant the right in equity to retain money for which no equivalent had been given. Foote v. Cotting, 195 Mass. 55. Newell v. Hadley, 206 Mass. 335, 342, 343.
But the defendant’s main contention seems to be, that, as the sale included the personal property in the hotel which the bankrupt took possession of and removed, the consideration is entire and unapportionable, nor can the existing state of things at the date of the contract be restored if rescission is decreed. It appears, that the defendant, after the board refused to recognize the bankrupt as licensee, sold the licenses to a third party for a price which gave her full compensation for all that she had proposed to part with to the bankrupt, and the board as a condition of making the transfer required her to deposit with the defendant Bolster' so much of the money as would fully cover the payments made under the contract in question. The bill seeks to recover the *372moneys paid and to charge this fund in payment. The authority of the license commissioners to make this order, not having been questioned by the parties, need not be considered, and the fund may be treated as deposited for the bankrupt’s use, if the right of rescission existed at the date of adjudication.
The acts of the bankrupt in taking possession of the furniture and fixtures, removing them from the hotel and placing a part of them in his own name in a storage warehouse, and the sale of the remainder with the receipt of.the proceeds, preclude any right to rescind at law. Drohan v. Lake Shore & Michigan Southern Railway, 162 Mass. 435,439, and cases cited. It is plain, however, that to permit the defendant to retain this fund would be inequitable, and the bill can be maintained for leave to rescind in so far as rescission is possible, and in granting relief conditions can be imposed which will fully preserve the defendant’s rights. Thomas v. Beals, 154 Mass. 51, 55. Parker v. Simpson, 180 Mass. 334, 343. Long v. Athol, 196 Mass. 497.. Warren v. Para Rubber Shoe Co. 166 Mass. 97. Hayward v. Leeson, 176 Mass. 310. Hayes v. Hall, 188 Mass. 510, 512. . Braman v. Foss, 204 Mass. 404.
The interlocutory decree ordered by the single justice, that the plaintiff is entitled to recover from the defendant the amount paid to her by the bankrupt less such sum as may be due on account of the furniture and fixtures, adjudging the fund to be held for the benefit of the plaintiff, directing that it be applied in payment, and referring the case to a master to state the account, was rightly entered.
The exceptions of each party to the master’s report remain. The history of the bankrupt’s possession, and the necessity which arose requiring prompt removal of the property from the hotel, is detailed in the report. It is expressly found, that he acted in good faith and that in disposing of the property his conduct was that of an ordinarily prudent and careful business man.
' But the defendant’s second sale did not cover the personal property. If the plaintiff asks for rescission he must in so far as possible restore the situation as of the date of the contract. The premises have passed from the defendant’s control, and the furniture and fixtures having been converted cannot be restored. The master allowed the defendant the fair market value, with interest, of the articles which the bankrupt himself had sold. This is the meas*373ure of damages in actions for conversion, and the amount assessed gives full compensation. Lorain Steel Co. v. Norfolk & Bristol Street Railway, 187 Mass. 500, 506. Boles v. Merrill, 173 Mass. 491. But as some of the articles had been placed in storage and remained unsold, the plaintiff upon his appointment offered to return them to the defendant. The offer was rejected. No obligation to return property which after the notice was at the owner’s risk if rescission was made out, rested, upon the plaintiff. Alden v. Hart, 161 Mass. 576. St. 1908, c. 237, § 50. The master, however, having determined that upon the defendant’s refusal the sale by the plaintiff was the best thing to do in the interest of the parties, and that it was made at public auction in a proper manner, the defendant is to be credited with the proceeds after deducting the commission of the auctioneer. It is hardly necessary to point out, that the rule which obtains where the resale is by the seller for the buyer’s account upon his refusal of acceptance, has no application. Putnam v. Glidden, 159 Mass. 47, 50. See St. 1908, c. 237, § 60. The charge for storage should not be deducted.
The St. of 1907, c. 582, §§ 28, 29, relied on by the plaintiff, gives a lien to the warehouseman against the true owner, where the goods are deposited by a person liable as debtor, if he has been so entrusted with possession that a pledge of the goods by him would have been valid to a pledgee who took them for value and in good faith. The plaintiff under the master’s findings is not remitted to the right of the warehouseman, for, the bankrupt having stored the goods for his own convenience, his estate should pay the charges.
The exceptions of each party to the report should be overruled, the report confirmed, and in accordance with the interlocutory decree the total credits as stated by the master deducted from the sum due the plaintiff. If the fund is insufficient to satisfy the demands, execution is to issue for the balance remaining due.

Decree accordingly with costs.