267 Mass. 483 | Mass. | 1929
This is an action against a corporation as indorser waiving demand and notice on a promissory note made by the Kittery Garage Company to the order of the plaintiff and payable at its banking house. The defendant pleaded in answer, among other defences not now material, a general denial, want of authority of its treasurer to waive demand and notice, that the indorsement was ultra vires the corporate power of the defendant, and that the defendant was an accommodation indorser.
The president of the plaintiff testified that the note was given to him on the day of its date, that it was signed by the maker by Neil Burgess as its president and indorsed by the defendant by Neil Burgess as its treasurer, and also indorsed by Neil Burgess personally, and that this all was done at his desk before the note was delivered to him; that he thought the defendant through Burgess made an indorsement on the
During the argument at the bar, it was agreed in behalf of both parties to the action that the law of New Hampshire, where the note was made, indorsed and delivered, so far as material to the issues here depending, is the same as that of this Commonwealth. Therefore no reference is made to statutes or decisions of New Hampshire.
There was evidence to support a finding that the plaintiff received the note in complete form for value before maturity. This was sufficient to constitute the plaintiff a holder. Every holder is deemed prima facie to be a holder in due course. G. L. c. 107, § 82. The payee of a note may be a holder in due course. G. L. c. 107, § 75. Liberty Trust Co. v. Tilton,
These principles do not reach to the facts in the case at bar, where the defendant became indorser of the note in the presence of and before delivery to the payee. In its essential facts the case at bar is like J. C. Brill Co. v. Norton & Taunton Street Railway, 189 Mass. 431, 437. In that opinion the principle of Merchants National Bank v. Citizens’ Gas Light Co. 159 Mass. 505, was stated in slightly different form and then it was said at pages 437, 438: “If the note sued on in such a case is signed by the treasurer and there is no evidence of actual authority, the implied authority of a treasurer to sign notes has to be considered. But in the case at bar where by the terms of the note and the fact that it is taken by the plaintiff for a debt due not from one to whom it appears to have been negotiated but from one for whose accommodation it appears to have been indorsed, no such question arises. For it is settled that where a note is taken from the payee, in payment of a debt due from him, indorsed by a third person, the indorsement is prima facie an accommodation indorsement, and the person who takes it is chargeable with knowledge that the indorsement is an accommodation indorsement.
The defence of ultra vires stands on a different footing. That defence is that the indorsement of a negotiable instrument before delivery by a corporation not otherwise a party to the instrument, for the accommodation of another, is not commonly within the power of an ordinary commercial corporation, and that therefore, if the holder of negotiable paper takes it with knowledge or notice of the fact of such accommodation indorsement, it is open to such accommodation indorser to set up such knowledge coupled with evidence of the ultra vires nature of the indorsement in defence to an action on the negotiable instrument. Boston Box Co. Inc. v.
Although it is provided by G. L. c. 107, § 52, that an accommodation party “is liable to a holder .in due course notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party,” this was not designed to change the law as to corporations and their legal powers even when read in conjunction with §§82 and 47 already referred to. The General Court has not thereby extended the powers of every corporation to include the making of accommodation indorsements. This in substance was decided by J. G. Brill Co. v. Norton & Taunton Street Railway, 189 Mass. 431. See Oppenheim v. Simon Reigel Cigar Co. 90 N. Y. Supp. (Appellate Division) 355. The circumstances already narrated, under which the note here in suit was made, indorsed and delivered, were sufficient to give notice to the plaintiff that the defendant was an accommodation indorser and that the defence of the ultra vires was open to the defendant.
Although the point is rather close, we are of opinion that the corporate powers of the defendant under its charter did not extend to the making of accommodation indorsements. That is an unusual power to exist in a business corporation. Although the charter of the defendant was broad, it did not include this. The case is distinguishable from Bennett v. Corporation Finance Co., Inc. 258 Mass. 306, 313, 314, where the corporate powers were much broader. See Beacon Trust Co. v. Souther, 183 Mass. 413, 418, and Edwards v. International Pavement Co. 227 Mass. 206, 213, 214. It is somewhat analogous to decisions that an ordinary business corporation is without authority to become surety or guarantor for another. Davis v. Old Colony Railroad, 131 Mass. 258. Commercial Casualty Ins. Co. v. Daniel Russell Boiler Works, Inc. 258 Mass. 453, 455.
Exceptions overruled.