133 Mass. 26 (Mass. 1882), First National Bank of Easton v. Smith

Citation:133 Mass. 26
Opinion Judge:Devens, J.
Party Name:First National Bank of Easton v. Charles F. Smith & others
Attorney:H. D. Hyde & H. R. Bailey, for the plaintiff, and by J. B. Warner, for the defendants and reargued in March 1882, by Hyde & Bailey, for the plaintiff, and by Warner, (J. J. Myers with him,) for the defendants.
Judge Panel:Devens, J. Endicott & Field, JJ., absent.
Case Date:May 15, 1882
Court:Supreme Judicial Court of Massachusetts
 
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Page 26

133 Mass. 26 (Mass. 1882)

First National Bank of Easton

v.

Charles F. Smith & others

Supreme Court of Massachusetts

May 15, 1882

Argued March 16, 1881

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[Syllabus Material]

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[Syllabus Material]

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Suffolk. Bill in equity, filed May 17, 1880, against Charles F. Smith, Caleb H. Warner, Thomas Upham, all of this Commonwealth, and John W. Draper, formerly of this Commonwealth, but now a resident of the State of Texas, alleging that, on August 17, 1875, the Hickory Coal Company made a promissory note for $ 5000, payable in four months after date to its own order, which it indorsed, and that the note before its maturity was indorsed by the defendants Upham and Draper, and became the property of the plaintiff; that at its maturity the plaintiff, being the holder thereof for value, duly demanded payment thereof of the Hickory Coal Company, which neglected to pay the same, and due notice of its nonpayment was given to Upham and Draper; that Upham and Draper, prior to February 2, 1876, were indebted to the plaintiff to the amount of said note, the expense of protest and the interest thereon, and that said indebtedness had in no part been paid; that on or about February 2, 1876, Upham and Draper, being unable to pay their debts in full, with the intent of applying all their property for the equal benefit of all their creditors, and in order that all their creditors might eventually be paid in full, entered into an indenture with the defendants Smith and Warner, and with their creditors, whereby Upham and Draper agreed to give new notes, payable in twelve, eighteen, twenty-four and thirty months, to each of the creditors who should become parties to said indenture within two months, and to pay the indebtedness of such creditors made up as cash of the date of February 15, 1876; that by said indenture they conveyed and assigned all their personal property and assets, as set forth in certain schedules annexed thereto, to Smith and Warner in trust, to receive, manage and dispose of the same, and to divide the proceeds thereof ratably among said creditors; and the creditors covenanted not to sue their original demands, unless default was made in the payment of the new notes at their maturity; that the indenture was duly executed by the four defendants, and Smith and Warner accepted said trust and took possession of the property and assets thereby assigned; that the plaintiff then had, and still has, a right to become a party to the indenture; that certain creditors of Upham and Draper were notified of the execution of the indenture, and were invited to become parties thereto, of whom some accepted and signed the same, and others refused; that the plaintiff was not notified of the indenture, and had no opportunity to become a party thereto, until, as Smith and Warner allege, the time within which a creditor might sign the same had expired; that, in contravention of the intent and terms of the indenture, the defendants wilfully and intentionally withheld notice from the plaintiff of the intended indenture and assignment, in order to deprive the plaintiff of its share of the property thereby assigned; that the plaintiff did not know that the indenture had been made, or that the assignment thereby made was contemplated, until about...

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