Jewett v. Geiger, 263 Mass. 525

263 Mass. 525 | Mass. | 1928

Braley, J.

The first of these actions, which were tried together, is on a promissory note for $17,500 dated May 5, 1926, signed by Albert Geiger, Jr. as maker and indorsed by Gertrude R. Geiger his wife. It was payable sixty days from date to the order of John C. Avery, who made this indorsement on the back of the note, “Pay to Estate of George F. Jewett or order.” The declaration alleged that Gertrude R. Geiger indorsed the note before delivery for the accommodation of her husband, and that the plaintiff became the holder before maturity, and that due notice of nonpayment was given. The defendants’ answer is a general denial with averments that the note was given by Albert Geiger with certain shares of common and preferred stock of the R. H. Booth Sales Company to one John C. Avery on account of commissions arising from the sale of stock, and that said stock was made subject to a “side agreement” between the defendant Albert Geiger and Avery, whereby Avery was to proceed with the sale of the stock until the note should be liquidated, but that Avery failed and neglected to sell the stock and to liquidate the note which he has since transferred in violation of the agreement. It is further averred that the plaintiff took the note “either with knowledge or under such circumstances as to charge her with knowledge of said agreement,” and that owing to the failure of Avery to sell the stock promptly and to liquidate the note the stock has fallen greatly in value. The defendants ask that they may be permitted to recoup “any damage by reason thereof.” The defendants did not deny their signatures and the plaintiff introduced the note and rested.

It appeared in the uncontradicted evidence of one MacGill, a witness called by the defendants, that protest was duly made, and that MacGill handled a number of financial matters for his father-in-law, George F. Jewett, who lent the money, and upon his death April 25,1926, MacGill continued to act for the estate of the decedent of which the plaintiff, his widow, is administratrix. The defendants however at the trial called for and offered in evidence a prior note held by the plaintiff for $19,840, dated March 26, 1926, and payable to George F. Jewett or order, which Avery as maker had given to Jewett. The payment of this note was secured by a pledge by Avery of certificates of the common and preferred stock of the R. H. Booth Sales Company, and on May 5, 1926, Avery wrote Geiger that when the note “you have given me this day for $17,500 ... is paid I hereby agree to turn over to Mrs. Geiger the 311 shares of preferred stock and 236 shares of common stock of the R. H. Booth Sales Coi, being the amount of shares held in my name as collateral security for this note.” It does not appear that MacGill knew of this arrangement. The financial condition of the Booth Company-appeared to MacGill to be so uncertain that he notified Avery, that unless the note was paid at maturity the collateral security would be sold as he was anxious about the matter because of Jewett’s death, as well as the necessity of the settlement of the estate. And on February 9,1927, MacGill, who held the note in suit for $17,500, sold some of the collateral listed in the note for $19,840.

It is plain on the evidence put in by the defendants that the note for $19,840 and the note for $17,500 were distinct, and that the proceeds of the sale of the stock held as security on the prior note for $19,840 were to be applied on that note. The plaintiff therefore was a holder in due course, and, the various offers of proof of the defendants relating to the pledged stock as being applicable to the note declared on having been properly excluded, the verdict for the plaintiff was rightly ordered. G. L. c. 107, § 75. Merchants National Bank v. Marden, Orth & Hastings Co. 234 Mass. 161.

The second case is in tort for the conversion by the defendant individually of two hundred eight shares of the common stock, and three hundred eleven shares of the preferred stock of the R. H. Booth Sales Company pledged by Avery on the note for $19,840. It was wholly immaterial whether Avery told MacGill how much of the stock pledged was Avery’s stock, and that MacGill knew that Avery owned only fifty shares. The certificates were in Avery’s name by transference from Geiger, who knew that the pledge was to be made in order to obtain the loan. The power of sale contained in the note provides that, upon default, the holder may sell without notice the stock at public auction, and may purchase at such sale. The sale at public auction February 9,1927, when the stock was bid in for the benefit of the estate at five cents a share, which now holds it, was valid. Jennings v. Wyzansici, 188 Mass. 285. Eddy v. Fogg, 192 Mass. 543, 546. The plaintiff failed to offer any admissible evidence showing a conversion of the stock, and the verdict for the defendant Abigail *Fay Jewett was directed rightly.

The entry in each case must be,

Exceptions overruled.