Massachusetts Supreme Judicial Court, 1928

Modern Heating & Engineering Co. v. Franklin Finance & Mortgage Corp.

Modern Heating & Engineering Co. v. Franklin Finance & Mortgage Corp.
Massachusetts Supreme Judicial Court · Decided April 4, 1928 · Sanderson
263 Mass. 327; 160 N.E. 794; 1928 Mass. LEXIS 1129

Modern Heating & Engineering Co. v. Franklin Finance & Mortgage Corp.

Opinion of the Court

Sanderson, J.

The defendant Franklin Finance and Mortgage Corporation was the maker of the note in which the plaintiff is named as payee, and upon which this action is brought. The defendant Robb was an indorser of that note before delivery. The order in which the names of the indorsers appeared on the back of the note at the time of trial was: Modern Heating & Engineering Co., R. D. Mayo, Treas.; Warren F. Scott; Ralph H. Robb; Modern Heating & Engineering Co., R. D. Mayo, Treas.; and R. D. Mayo. A default was entered against the defendant corporation, and the jury found for the plaintiff against the defendant Robb, having answered “No” to the question “Was the defendant Robb an accommodation indorser for the benefit of the plaintiff?”

The declaration alleged, among other things, that the defendant corporation made a promissory note, a copy of which with indorsements is annexed; that the defendants Scott and Robb indorsed it before delivery to the plaintiff. The defendant Robb set up in his answer as one of his defences that his indorsement was for the accommodation of the plaintiff.

Section 91 of the negotiable instruments act (G. L. c. 107) is in the following terms: “As respects one another endorsers are liable prima facie in the order in which they endorse; but evidence is admissible to show that as between or among themselves they have agreed otherwise.”

Evidence was introduced without objection that the plaintiff’s treasurer, Mayo, in the presence of Robb, asked Scott, the president of the defendant corporation, for the payment of an overdue account for merchandise, and Scott said the defendant corporation could not pay the indebtedness in cash but would give its note indorsed by Scott and Robb; *329and the note on which the action was brought was then given. Subject to the defendant Robb’s exception, Mayo testified that he presented the note to a trust company for discount with indorsements thereon in the following order; Warren F. Scott; Ralph H. Robb; Modern Heating & Engineering Company, by Robert D. Mayo, Treasurer; and Robert D. Mayo; and that a day or two later in consequence of a talk with an officer of the trust company he again indorsed the name Modern Heating & Engineering Company, this time placing the name above that of Scott, so that the name of the payee then appeared twice on the back of the note when discounted.

The case was reported with the stipulation by the parties that, if the paroi evidence, to which exception was saved by the defendant Robb, was properly admitted, judgment is to be entered on the verdict; and if the ruling was erroneous judgment is to be entered for the defendant Robb.

The evidence to which objection was made was competent to prove that Robb did not indorse for the accommodation of the plaintiff. An inference in support of that defence might have been drawn from the appearance of the plaintiff’s name above that of Robb, if it were unexplained. This fact would cease to have significance on that issue when the evidence to prove when and why the name came to be placed upon the note above that of Robb was introduced. Inasmuch as the evidence was admissible on this issue, judgment is to be entered on the verdict in accordance with the stipulation of the parties. We need not consider whether it was admissible in support of any other issue.

Judgment for the plaintiff on the verdict.

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