Case Name: Louis H. Jacobs vs. Lyle A. Brown & others
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1927-04-08
Citations: 259 Mass. 232
Docket Number: 
Parties: Louis H. Jacobs vs. Lyle A. Brown & others.
Judges: 
Reporter: Massachusetts Reports
Volume: 259
Pages: 232–238

Head Matter:
Louis H. Jacobs vs. Lyle A. Brown & others.
Suffolk.
January 27, 1927.
April 8, 1927.
Present: Bjjgg, C.J., Bbaley, Crosby, Pierce, & Wait, JJ.
J. L. Sheehan, for the defendants.
J. M. Graham, for the plaintiff.

Opinion:
Braley, J.
This is an action of contract to recover the principal and interest of two promissory notes, each payable to the plaintiff or his order, signed by the corporation as maker and by the defendants Brown, Kenyon and Ginn as indorsers. The plaintiff having discontinued as to the corporation, the trial proceeded against the indorsers, and, the plaintiff having obtained a verdict, the case is here on the defendants' exceptions to the denial of a motion for a directed verdict, to the rulings on evidence, to the refusal to give certain requests, and to portions of the instructions to the jury.
It is contended that the discontinuance prevented further prosecution of the action. But, even if the maker ceased to be a party, the plaintiff could maintain the action against the indorsers, upon proof of liability, although Brown had no authority as president of the corporation to affix its name to the notes. Matheson v. O'Kane, 211 Mass. 91. The plaintiff had no notice of this infirmity, and the notes on their face purported to be regular. The signatures of the indorsers were admitted, and by their indorsement without qualification they warranted that they had a good title, and that all prior parties had capacity to contract, and that the notes were valid subsisting obligations. G. L. c. 107, § 86. Leonard v. Draper, 187 Mass. 536.
The defendants also contend that the plaintiff cannot recover because he failed to prove a demand for payment on the maker, and notice of dishonor to them as indorsers. The notarial certificates of protest, however, copies of which are part of the record, were prima facie evidence of the facts therein stated. G. L. c. 107, § 13. Manufacturers National Bank v. Simon, 245 Mass. 325. These certificates show that all the steps necessary to charge the indorsers were taken. Demelman v. Brazier, 198 Mass. 458, 463. The plaintiff, who was the last indorser, also testified that on receiving the notices he mailed on the same day postage prepaid copies duly addressed to Brown and to Kenyon, and carried one copy to Ginn, who said, "I will see Brown, and see if he can't fix this matter up." The question of notice was for the jury, to whom it was submitted under suitable instructions. Lamkin v. Edgerly, 151 Mass. 348.
It appears in the record that the notes in suit were given in consequence of an earlier transaction between the plaintiff and the defendant Kenyon. The jury on conflicting evidence, all of which was admissible, warrantably could find, that on January 7, 1924, the defendant Brown solicited the plaintiff for a loan of $2,500 for the use of the Shawmut Paper Box Company, a corporation of which Brown was president, and of which the plaintiff was a stockholder. The plaintiff declined to advance the money, and asked Brown why he did not get Kenyon, also a stockholder, to aid him. In substance Brown replied, that Kenyon could not help as he had outstanding notes at the bank, and that Kenyon had-said, that if he could get the plaintiff's note he would indorse it, present the note to the bank for discount and obtain the money. A note for $2,500 was then prepared by Brown which the plaintiff signed as maker. It was payable April 7, 1924, and shortly before maturity Brown informed the plaintiff that only $250 and the interest could be paid. The plaintiff replied, that he wanted it, meaning the note, paid. But, after further conversation the plaintiff signed and gave to Brown a note for $2,250 payable to the order of the defendant Kenyon. This note was dated April 7, 1924, and matured July 7, 1924. When this note was given, Brown gave the plaintiff the notes in suit, one for $1,000 and the second for $1,250 indorsed by the defendants, each dated April 7,1924, and respectively maturing May 15 and June 15, 1924. In response to his inquiries the plaintiff was informed by Brown that he would have the money on these notes before the note for $2,500 became due. But no payment was made, and the plaintiff on July 7, 1924, paid the note for $2,250 to the holder. It would follow on these findings that the jury further could find that the note for $2,500 was not indorsed by Kenyon for the accommodation of the plaintiff, but was given by the plaintiff to Kenyon at his request, and for his accommodation, and that the note for $2,250 which the plaintiff gave was in renewal of the balance of the note for $2,500, to the payment of which "the two notes in suit were given" by the defendants "as collateral." The judge correctly instructed the jury that, if they found as a fact that the original note for $2,500 was given because the plaintiff was borrowing the money from the bank, and that Kenyon was lending his name to the plaintiff, then the plaintiff could not recover. But, if they took the view that the plaintiff lent his name to Kenyon, and Kenyon was borrowing the money from the bank, and the defendants Brown and Ginn indors'ed for the accommodation of Kenyon, the plaintiff could recover. G. L. c. 107, § 47, 48, 52. It is plain that notwithstanding the defendants' contention the plaintiff could be found to be a holder for value. Goodman v. Gaull, 244 Mass. 528, 529. The motion for a directed verdict was denied rightly.
The defendants' first request that on all the evidence the plaintiff could not recover was not in conformity with the rules of the trial court. The remaining requests, in so far as they related to the corporation and its connection with the litigation were immaterial by reason of the discontinuance, and in so far as they related to the consideration of any of the notes, or whether the defendants or either of them indorsed for the accommodation of the plaintiff, or whether notice of dishonor was seasonably given, or whether the plaintiff was an accommodation maker, could not have been granted in terms. G. L. c. 107, § 47, 88, 89. Mumford v. Coghlin, 249 Mass. 184,190. And in so far as appropriate they were fully covered by the instructions. Whitney v. Wellesley & Boston Street Railway 197 Mass. 495.
We also find no error in the instructions to which the defendants excepted. The judge properly said that, while the corporation was no longer a party, this fact was not conclusive as to the legal rights of the indorsers, or of the plaintiff. The instructions as to the sufficiency of the protest for nonpayment were in accordance with G. L. c. 107, § 108. The instruction, that the burden of proof was on the plaintiff to show by a fair preponderance of the evidence that Brown and Ginn signed the notes in suit for the accommodation of Kenyon before those indorsers could be held, was right. The charge, when reviewed, clearly and adequately stated the issues upon which the jury were to pass, and, finding no reversible error of law in the conduct of the trial, the entry must be
Exceptions overruled.