Clark v. Patterson

• Decision Date: 03 March 1893
• Citation: 33 N.E. 589,158 Mass. 388
• Parties: CLARK v. PATTERSON et al. CONDIT v. SAME.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

158 Mass. 388

33 N.E. 589

CLARK

v.PATTERSON et al.

CONDIT

v.SAME.

Supreme Judicial Court of Massachusetts, Suffolk.

March 3, 1893.

Appeal from superior court, Suffolk county.

Bill by Mary E. Clark against John B. Patterson and others to recover the value of two bonds pledged by Linus E. Clark to defendant the Broadway National Bank, or to compel defendant Stephen G. Condit to pay the value of said bonds, by virtue of an agreement entered into by said Condit for the benefit of the creditors of the insolvent firm of Patterson & Clark. Also, bill by Stephen G. Condit against the same defendants and Mary E. Clark, asking for the cancellation of said agreement, on the ground of mistake, should the court hold in favor of plaintiff in the first action. The bills in both cases were dismissed, and the plaintiffs in both actions appeal. Affirmed.John Lowell and A.F. Means, for Condit and Patterson.

G.L. Huntress, for Sughrue.

LATHROP, J.

The first case is a bill in equity against John B. Patterson, Michael J. Sughrue, Stephen G. Condit, and the Broadway National Bank. The case was heard on the merits in the superior court, and a decree was entered, dismissing the bill. From this decree the plaintiff appealed, and the case comes before us on the pleadings and a report of the evidence taken in the court below. Most of the facts of the case are not in dispute,while as to others there is a controversy. We find them to be as follows: In May, 1890, Linus E. Clark, the husband of the plaintiff, entered into partnership with the defendant Patterson. By the terms of the articles of copartnership, Clark agreed to contribute to the partnership the sum of $1,000 in cash. Clark had no money, but said to Patterson that he had a bond on which he could realize the money. The bond in question was for the sum of $1,000, and was issued by a water company, and was payable to bearer. It belonged to the plaintiff, and she lent this bond to her husband, and took from him an instrument, in writing, of the foollwing tenor: “$1,000. Boston, May 5, 1890. For value received, pay to the order of Mary E. Clark one thousand dollars, value received, and charge the same to account of Linus E. Clark. To Mary E. Clark.” This instrument was indorsed in blank by the defendant Patterson, by writing his own name upon it. With this bond as collateral security, the defendant bank lent the firm of Patterson & Clark the sum of $1,000, payable on demand, and took the firm note therefor. On August 5, 1890, the plaintiff lent her husband a coupon bond of another water company, payable to bearer, for $1,000. She received therefor, from her husband, the promissory note of the firm of Patterson & Clark for the sum of $1,000, payable to her order on demand. With this bond as collateral security, the firm of Patterson & Clark borrowed of the defendant bank the sum of $800, and gave their promissory note therefor. The bank had no notice of the plaintiff's interest in either bond. Some time after the latter transaction with the bank, the firm of Patterson & Clark failed, and on September 29, 1890, executed an instrument of assignment to the defendant Sughrue of all their assets, in trust, for the creditors of the firm who should become parties thereto. This instrument authorized the assignee, among other things, “to sell and dispose of all the trust property as by him deemed wise, and to collect or sell choses in action, using a reasonable discretion as to the times and modes of selling and disposing thereof, for cash or on credit, at public or private sale.” When Patterson & Clark failed the plaintiff made claim for the amount of the two instruments delivered to her by her husband,and wished to assent to the instrument of assignment as a creditor, and did what she could to become a party thereto. She was told by the assignee that, by the laws of this commonwealth, such a claim was not authorized, and was advised to employ counsel. She did employ counsel, who advised her that she had no claim on the assets of the firm. On October 10, 1890, with the advice and consent of her counsel, she signed the following paper: “It is agreed that the bonds held by the Broadway National Bank may be sold by said bank at private sale, and the proceeds, after payment of the bank's claim, may be held by the bank, and paid to whomsoever is entitled to thereto, as soon as same may be determined or settled. This agreement is understood to be without prejudice to the rights or titles of either party.” The bank did not become a party to the assignment, and, on November 29, 1890, sold the bonds, under a...