Holmes v. First National Bank

126 Mass. 353 | Mass. | 1879

Colt, J.

There is nothing in the report of this case which leads us to doubt that the decree ordered by the single justice of this court, at the hearing before him, was right.

The bank acquired the shares of stock in question by a title valid against proceedings in bankruptcy. They were received as security, at the time'the debt was contracted, January 1, and did not constitute a preference. The check of Easton & Milne, drawn on their Boston bankers, and given to the bank in the forenoon of January 5, upon the surrender of the stock certificates, was not a payment of the debt, because it was drawn with no funds, and no reasonable expectation of funds, in the hands of the drawees, to meet it, and no reasonable expectation that it would be honored. Taylor v. Wilson, 11 Met. 44, 51. The delivery of the securities did not terminate the pledge, or transfer the title of the bank, because they were obtained wrongfully; the act of returning them was not a new pledge^ but simply restoring the bank to its rights. Way v. Davidson, 12 Gray, 465.

The principal question is, whether the transactions between the parties in the after part of the same day (January 5), amounted to a payment of the debt for which the securities were pledged. This is a question of fact upon the evidence reported, upon which the finding of the single judge will not be reversed, unless it appear to be clearly erroneous. Reed v. Reed, 114 Mass. 372. Montgomery v. Pickering, 116 Mass. 227.

It appears that, upon the discovery of the fact that Easton 5c Milne were in failing circumstances, it was proposed that the several banks in the city should raise a sum of money to be apportioned among them, sufficient to carry the firm through its difficulties. Pending the completion of this arrangement, the defendant bank, with its own funds, took up the checks, which it had received of the firm, drawn on its Boston bankers; and was left in the condition in which it was before it received the check of the firm, and gave up the securities. No part of the money to pay these checks was furnished by the firm. If , the plan had been carried out, then the amount apportioned would have been a new loan; but it was abandoned, and the defendant’s right to its securities remained as before. It cannot make any difference, that the checks were taken up in the name of the firm, and that the bank received nothing in place of the checks. The real nature of the transaction is to be considered. The president of the bank had stated to all parties interested, when the plan for relief was under consideration, that the defendant held these securities, and there is no evidence of an understanding that they were to be given up. They were securities for the loan; and the loss of the memorandum check, or its delivery to the firm without payment, would not discharge the claim of the bank upon them. The evidence of payment, afforded by the course pursued and the forms adopted, is controlled by the undisputed circumstances and the real intention of the parties. The defendant is entitled to the benefit of the presumption, that it could not have intended to give up its securities until its debt was actually paid. Butts v. Dean, 2 Met. 76. Curtis v. Hubbard, 9 Met. 322, 328. And, upon the whole, the clear preponderance of the evidence is in favor of the validity of the defendant’s title.

Bill dismissed, with costs.