Davis v. Randall

• Decision Date: 11 September 1874
• Parties: Theodore M. Davis, receiver, v. George H. Randall
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

115 Mass. 547

Theodore M. Davis, receiver, v. George H. Randall

Supreme Court of Massachusetts

September 11, 1874

[Syllabus Material] [Syllabus Material]

Suffolk. Contract against the acceptor of two bills of exchange. Trial in the Superior Court, before Devens, J., who reported the case for the consideration of this court in substance as follows: The plaintiff, to maintain the issues on his part, proved that the Ocean National Bank, of the city of New York, a national banking association, formed pursuant to the laws of the United States, and located in the city of New York, having failed to redeem its circulation notes, when payment thereof was legally demanded at the office of said association, he was on December 12, 1871, duly appointed by the comptroller of the currency of the treasury department of the United States, receiver of said Ocean National Bank; that he accepted said office, took possession of the assets of the bank, and that the drafts in suit had come into his possession as such receiver as part of the assets of said bank; that William B. Fiske & Company, a firm doing business in New York city, made the bills and drafts in suit, payable to their own order, and indorsed the same to said Ocean National Bank, presenting the same for discount at New York city, accepted by the defendant; that said bank discounted one of the drafts for $ 684.11, on September 16, 1871, and the other for $ 843.07, on November 11, 1871, and passed the proceeds to the credit of said W. B. Fiske & Co., less the discount; that said drafts were severally unpaid. The drafts were put in evidence, and the plaintiff rested his case.

The defendant, to sustain the issues on his part, proved, under objection, the evidence being admitted to be considered if competent; that on or about August 1, 1871, said firm of W B. Fiske & Co. obtained a loan of five thousand dollars of said Ocean National Bank, through C. S. Stevenson, its president, and secured the same by a mortgage to the bank of real estate to the amount of five thousand dollars, agreeing to pay twelve per cent. per annum, the rate required by said bank for said loan; that the amount of said loan was passed to the credit of said W. B. Fiske & Co., who were entitled to draw the same at sight; that on applying to the bank for the money on said loan, the bank, through its president, requested Fiske & Co. not to draw out said loan at once, but to present drafts or bills to said bank on sixty and ninety days, or other short periods, as they might need the money, up to said five thousand dollars, so that the same would look more bankable, and that said bank would discount the same at the rate of twelve per cent. per annum, and keep on discounting drafts as fast as the same matured; that Fiske & Co., in order to oblige or accommodate the bank, through its president, in this respect, agreed to avail themselves of the loan in this way, but informed the president that such paper would have to be accommodation paper; that they knew several parties, amongst others the defendant in this action, who might be willing to accept for their accommodation, but it must be understood and agreed by the bank that the parties so accepting drafts or bills were not to be looked to for payment, or to be held liable thereon in any way; but the bank must look to its mortgage security for the amounts received by said firm on said bills or drafts, so to be presented to said bank for discount, and that the acceptors must be informed of this arrangement to induce them to accept; that the president replied all right, the bank will discount such paper for you; that thereafter Fiske & Co. informed the defendant fully of the loan secured by mortgage, and of the understanding and agreement with said bank as above stated, and Fiske & Co. solicited the defendant to accept drafts to be drawn by said firm upon the defendant, informing him the bank had agreed not to look to him for payment in any way, and knew that his acceptances were to be wholly for accommodation; that the defendant having no business relations with Fiske & Co., and being in no ways indebted to them, and having no effects of said firm in his possession or control, and...