299 Mass. 565 | Mass. | 1938
The defendants, husband and wife, are sued upon their indorsements of a renewal note for $14,-027.58, given on May 18, 1932, and payable July 18, 1932, to the order of the plaintiff. The maker was a corporation called C. B. Yule & Sons, Inc., engaged in the garage business, and owned and operated by the father and brothers of the female defendant.
After the introduction of the note, the plaintiff rested. Evidence for the defendants showed that their signatures to the original note, dated December 15, 1930, of which the note sued on was the last of a series of renewals, were obtained under the following circumstances. The president of the plaintiff told the female defendant, who kept the books for the garage corporation, that the plaintiff held a miscellaneous collection of defaulted notes and overdrafts of the garage corporation, that the transactions would not be approved by the bank examiners, and that he wished a new note covering the entire indebtedness, about $14,000. Such a note was sent to the president of the plaintiff, but he sent it back for the indorsements of the owners of the corporation. These were obtained. The president of the plaintiff then told the female defendant that he wanted two new names as indorsers, because "this is going before the bank examiners, and I would like to have two new names on that note, because the garage business is bad. ... I would like to have Elmer and you [the defendants] sign it.” To her objections he answered that some of the earlier notes were "balloon notes” which were against good banking practice, that he would like to get them out of the bank files because the bank examiners would not look favorably upon them, that he had
The judge denied, subject to the exception of the plaintiff, a motion for a directed verdict for the plaintiff. The jury returned a verdict for the defendants.
A contemporaneous oral agreement that a promissory note given for consideration shall not actually create the obligation that its words express, is of no effect. Wolff v. Perkins, 254 Mass. 10, 13. Buckley v. Hacking, 258 Mass. 525. Dodge v. Bowen, 264 Mass. 208, 213. Starks v. O’Hara, 266 Mass. 310, 314. Reardon v. Murdock, 292 Mass. 362, 364. But in the present case the defendants received no consideration. Even if the earlier notes were extinguished by the note of December 15, 1930, there is no evidence that such extinguishment was the consideration for the indorsements. The delivery of a note “may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument.” G. L. (Ter. Ed.) c. 107, § 38. “Absence ... of consideration is matter of defence as against any person not a holder in due course.” § 51. An indorser is not liable to one for whose accommodation the indorser
The plaintiff contends, however, that the defendants cannot make this defence to the renewal note, because their indorsements of the original note were intended to give the plaintiff an apparent soundness, the reality of which the defendants cannot be permitted to deny or impair. It is true that circumstances somewhat like those in the present case might create an estoppel against such a defence. Prudential Trust Co. v. Moore, 245 Mass. 311, 316. International Trust Co. v. Wattendorf, 256 Mass. 323. Schmid v. Haines, 115 N. J. L. 271, 274. But the present record contains nothing to show an estoppel. It does not appear that the impending visit of the bank examiners ever took place, much less that the notes in question had any actual effect upon the situation of creditors of the
Exceptions overruled.