Cosmopolitan Trust Co. v. Lyons
| Citation | 244 Mass. 115,138 N.E. 325 |
| Parties | COSMOPOLITAN TRUST CO. v. LYONS et al. |
| Decision Date | 01 March 1923 |
| Court | United States State Supreme Judicial Court of Massachusetts |
OPINION TEXT STARTS HERE
Exceptions from Superior Court, Suffolk County; Cushing Wait, Judge.
Action of contract by the Cosmopolitan Trust Company against John H. Lyons and another on a negotiable promissory note made by defendants and indorsed to plaintiff by the payee. Directed verdict for plaintiff for $4,325.60, and defendants bring exceptions. Exceptions overruled.
The answer was a general denial and plea of payment. By amendment, defendants alleged payment by the payee to the authorized agent of the bank commissioner, who was then in charge of plaintiff's property and business, by giving his check to the order of the bank commissioner against his account with plaintiff, and by paying a further sum in cash. Defendants' exceptions were to the admission of a letter from the assistant bank examiner to the payee, and to the refusal of requested rulings as to the effect of the alleged payment by the payee. The letter in question was as follows:
‘October 28, 1920.
‘Mr. Jacob Swartz, Kimball Bldg., Rm 621, Boston, Mass.-Dear Sir: We wish to call your attention to your note No. 71764, due on October 5, 1920.
‘As the signature on your note and that on the check given us as offset does not agree, we cannot accept this check, but must ask you to make other arrangements for payment.
‘Assistant Bank Examiner.’
Samuel M. Child, of Boston, for plaintiff.
A. M. Burroughs and John F. Volk, both of Boston, for defendants.
This is an action of contract by the indorsee before maturity and holder for value of a negotiable promissory note against the makers. The note fell due on October 1, 1920, and was payable to one Swartz, who indorsed it in blank. The genuiness of all signatures was admitted or proved. It was agreed that the commissioner of banks took possession of the plaintiff trust company on September 25, 1920, and had no authority on October 1, 1920, from any justice of the Supreme Judicial Court, authorizing the compromise of any claims against the trust company, and that his representative had the same authority which the commissioner would have had concerning the transaction with Swartz now to be narrated. Swartz, the payee, testified that, in a conversation with the representative of the bank commissioner two or three days after possession had been taken, he called attention to the note, stated that the defendants as makers were not prepared to pay it and that he as indorser was going to take it up; that agreement was made whereby his account in the trust company at its face value was to be used toward payment of the note and the balance paid in cash; that, pursuant to this arrangement, on the due date of the note, he handed his check on the trust company for the face of his balance on deposit and cash for the amount due on the note above that balance, the representative of the commissioner saying that that would constitute payment of the note, which would be returned to him ‘in the usual time,’ and giving him a receipt acknowledging ‘set-off of $3,906.44 to apply note, * * *’ and that he had never received the check or the note from the plaintiff. This action is brought to recover the balance on the note after deducting the cash payment made by Swartz.
This record does not present questions which would arise in an action by the commissioner against Swartz as indorser, and with them we are not now concerned. The arrangement between Swartz and the commissioner does not afford a defense to the defendants as makers upon the facts here revealed.
[1][2] The payee and indorser of the note, Swartz, did not have an absolute right to set off the balance to his credit as depositor in the payment of the note. His liability on it was as indorser. The makers were primarily liable. The liability of the makers constituted a security for the indebtedness represented by the note in addition to the...
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Cosmopolitan Trust Co. v. Suffolk Knitting Mills
...133 N. E. 625; Commissioner of Banks v. Thurston (In re Prudential Trust Co.) 244 Mass. 64, 72, 138 N. E. 702;Cosmopolitan Trust Co. v. Lyons, 244 Mass. 115, 121, 138 N. E. 325. It would be closing our eyes to the obvious to proceed on any other footing. The second action is a cross-action ......
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Rossi Bros., Inc. v. Comm'r of Banks in Possession of Highland Trust Co.
...involved in the case at bar. Cases like Cosmopolitan Trust Co. v. S. Vorenberg Co., 245 Mass. 317, 139 N. E. 482;Cosmopolitan Trust Co. v. Lyons, 244 Mass. 115, 138 N. E. 325;Cosmopolitan Trust Co. v. Wasserman, 251 Mass. 514, 146 N. E. 772;Cosmopolitan Trust Co. v. Golub, 252 Mass. 574, 14......
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