Court Opinion

ID: 6410166
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:52:05.020445+00
Date Added: 2024-06-11T15:51:20.723764
License: Public Domain

Shaw, C. J.
The question in this case arises mainly upon a somewhat complicated state of facts, to be found by the court, upon evidence agreed to. It is an appeal from the decision of the commissioner of insolvency, allowing a claim against the estate of John Hull & Co., insolvents, as indorsers of a note made by Dean & Hull, and held by the Fall River Union Bank. Without stating the result of an investigation of facts, the court are of opinion, that the bank have no good cause of action against said insolvents, as indorsers, and, therefore, that this claim ought not to be allowed against then estate.
1. It is clearly established, that the note was indorsed by John Hull, in the name of the firm of John Hull & Co., without the knowledge or consent of Howard, his partner, to raise money to pay a separate debt of his own, and was, of course, a fraud upon his partner and upon the partnership creditors. This fact was known to Coggeshall, the cashier of the bank, through whose agency the title of the bank was acquired, and by whose knowledge the bank must stand affected. The note was not discounted in the ordinary course of business, but was received in payment of a smaller note lying at the bank dishonored.
2. But, if John Hull had power to bind his partner, and as between them to make a valid indorsement of the note, we think there is evidence, if not conclusive, at least proper to go to a jury, to prove that the note was indorsed as collateral security for an outstanding debt, in contemplation of insolvency, and so would be held void as against the creditors of the firm.
But being of opinion, upon the other ground stated, that the bank have no right to prove this claim, the decision of the commissioner of insolvency is reversed, and the claim disallowed. Certificate to this effect, to be sent to the commissioner.