First National Bank of Easton v. Smith

Decision Date15 May 1882
Citation133 Mass. 26
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court
PartiesFirst National Bank of Easton v. Charles F. Smith & others

Argued March 16, 1881 [Syllabus Material] [Syllabus Material]

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 July 1879; that thereupon the plaintiff applied to Smith and Warner, and asked to be allowed to sign the indenture, and to become a party thereto, on a footing with the other creditors who signed the same; but that Smith and Warner declined to allow the plaintiff to sign, and refused, and have ever since refused, to allow it to sign, or to recognize it as a party to the indenture, and have refused to, and withheld from, the plaintiff all benefit of the assignment; and that by said indenture Upham and Draper assigned and conveyed all their respective property and assets to Smith and Warner, and neither Upham nor Draper had any property, other than that assigned by the indenture, which could be reached by proceedings at law or in equity, to be applied to the payment of the debt to the plaintiff.

The prayer of the bill was that the defendants might be decreed to allow the plaintiff, as a creditor of the defendants Upham and Draper, to become a party to the indenture, and that thereupon it might be subject to and have the benefit of the provisions thereof, as if it had executed the same simultaneously with the other creditors; that the defendants might be decreed to do such acts and execute such papers as shall be necessary under the terms of the indenture to secure to the plaintiff its equitable share in the proceeds of the property thereby conveyed and assigned; and for further relief.

The bill was taken for confessed as against the defendants Upham and Draper.

The following facts were agreed: All the parties who executed the deed did so within two months of its date. The signatures of the creditors were obtained chiefly by Draper, acting for himself and Upham, with the latter's consent. The trustees did not attempt to procure signatures, nor were they requested by any person to do so; but the trust deed was put into their hands fully executed. The trustees had no knowledge that the plaintiff was a creditor of Upham or Draper until about August 1878. Several creditors of Upham and Draper had no notice of the trust until after the expiration of the two months limited in the deed, and have never become parties thereto; and other creditors were seasonably notified, but declined to become parties. The plaintiff received, and still holds, a promissory note indorsed by Draper and Upham, as alleged in the bill, and it has been duly protested, and the indorsers duly charged. New notes have been received from Draper and Upham by the creditors who are parties to the trust deed, as therein provided. The trustees have received the property assigned to them by Upham by the trust deed, but have received nothing of any value whatever from Draper.

On April 7, 1879, the trustees paid to the creditors who became parties to the deed a partial dividend of seven per cent upon the...

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5 cases
  • Nat'l Union Bank of Boston v. Copeland
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 26 Febrero 1886
    ...the privilege of acceding to or executing the deed after such time has elapsed. While this is conceded in First Nat. Bank v. Smith, 133 Mass. 26, which is the latest case in which the subject is adverted to, the decision of the case is, however, put wholly on the ground that it was then imp......
  • Nat'l Bank of Commerce v. Bailey
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 19 Junio 1901
    ...distributed among themselves. Battles v. Fobes, 21 Pick. 239;Id., 2 Metc. 93; President, etc., v. Richards, Id. 105; Bank v. Smith, 133 Mass. 26;Bank v. Copeland, 141 Mass. 257, 4 N. E. 794. Assuming that the right to refuse his consent is not an arbitrary right, to be exercised by the assi......
  • Sawyer v. Levy
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 18 Octubre 1894
    ... ... the debtor. This has often been adjudged. National ... Mechanics' & Traders' Bank v. Eagle Sugar ... Kendall, 137 Mass. 366; Bank ... v. Smith ... ...
  • National Union Bank of Boston v. Copeland
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 26 Febrero 1886
    ...to creditors the privilege of acceding to or executing the deed after such time has elapsed. While this is conceded in First Nat. Bank v. Smith, 133 Mass. 26, which is latest case in which the subject is adverted to, the decision of the case is, however, put wholly on the ground that it was......
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