Central Sav. Bank v. O'Connor

• Decision Date: 30 March 1903
• Citation: 132 Mich. 578,94 N.W. 11
• Parties: CENTRAL SAV. BANK v. O'CONNOR et al.
• Court: Michigan Supreme Court

94 N.W. 11

132 Mich. 578

CENTRAL SAV. BANK v. O'CONNOR et al.

Supreme Court of Michigan

March 30, 1903

Error to Circuit Court, Wayne County; Joseph W. Donovan, Judge.

Action by the Central Savings Bank against George M. O'Connor and another. Judgment for plaintiff, and defendants bring error. Reversed.

Charles W. Casgrain (E. A. Fink, of counsel), for appellants.

Dwight C. Rexford, for appellee.

MONTGOMERY, J.

This action is brought upon two promissory notes aggregating $1,523.47, made by the defendant O'Connor, and indorsed by the defendant Hammond. The notes bear date February 1 1901. The plaintiff made its case by introducing them in evidence. The defendants then offered to show by a parol agreement made at the time said notes were executed, and which is set out in a notice under the general issue, in substance as follows: That the notes were given for the amount of a chattel mortgage which plaintiff held upon property of the J. R. Pearson Company, which property defendant O'Connor had purchased; that the title to said notes never passed to said plaintiff; that the notes were delivered to plaintiff upon the clear and distinct understanding and condition, agreed to by said plaintiff that in case the said J. R. Pearson Company should thereafter be forced into bankruptcy by any of its creditors, upon proceedings instituted by them for that purpose, and adjudicated a bankrupt, said notes would thereupon, in the event of the happening of such contingency, become and be null and of no effect, and were not to be paid, and that it was upon said condition said notes were delivered to said plaintiff; and that it accepted and held, and still holds them, and each of them. The evidence of the defendant upon this subject, which is most favorable to the defense, is, in substance, this: That the notes were executed in consideration of the transfer by the plaintiff to the defendant of a chattel mortgage and accompanying note of the J. R. Pearson Company, which note was indorsed by J. R Pearson, F. H. Crawford, and A. J. Franklin. Defendant testified that, after the note was signed and indorsed, he then said to Mr. Fox, plaintiff's representative 'These notes are delivered to you on the condition that if this concern is put in bankruptcy by reason of any of these creditors petitioning because of this chattel mortgage having been given, or an execution having been levied and the goods sold under the execution, which are both acts of bankruptcy, then the notes are to be null and void; and Mr. Fox says that is my understanding of it, and I accept them so; and he says you know that there is nothing going to be done about it.' On the trial of the case the court submitted the case to the jury upon the instruction that, if the claim set up by the defense is true, the plaintiff could not recover. The jury returned a verdict for the defendants. Afterward a motion for a new trial or for the entry of a judgment non obstante veredicto was entered, and the court, after consideration, entered a judgment for the plaintiff non obstante veredicto. The defendants bring error.

The...