Fed. Nat. Bank v. O'Keefe

• Decision Date: 09 April 1929
• Citation: 267 Mass. 75,165 N.E. 897
• Parties: FEDERAL NAT. BANK v. O'KEEFE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

267 Mass. 75

165 N.E. 897

FEDERAL NAT. BANK

v.O'KEEFE.

Supreme Judicial Court of Massachusetts, Suffolk.

April 9, 1929.

Exceptions from Superior Court, Suffolk County; Frederick J. Macleod, Judge.

Action by the Federal National Bank against Thomas J. O'Keefe. Verdict for defendant, and both parties bring exceptions. Plaintiff's exceptions sustained; defendant's exceptions overruled.

S. L. Bailen, of Boston, for plaintiff.

F. M. Carroll, of Boston, for defendant.

PIERCE, J.

This is an action of contract brought by a writ, dated August 1, 1923, to recover upon a promissory note, payable to the order of the Federal Trust Company for $5,040, and dated July 30, 1919. The ad damnum is in the amount of $6,500. The defendant's answer set up the plea of payment.

On April 11, 1927, the judge allowed the addition to the declaration of ‘Count 2,’ which reads: ‘And the plaintiff says that it is the successor to the Federal Trust Company, in accordance with provisions of laws in such cases made and provided; that the defendant executed an instrument, in writing, reading as follows: Boston, Mass., September 4, 1919. In consideration of one dollar and other valuable considerations paid to me by the Federal Trust Company, the receipt whereof is hereby acknowledged, I hereby guarantee to said company, its successors or assigns, payment at maturity of the obligation described below, waiving the right of demand and notice. I further guarantee the payment of all legal and other expenses in the collection of said obligation and also agree to sign on demand a similar guaranty of any renewal of the whole or any part thereof, this guaranty to remain in full force until delivery of said new guaranty. (1) Demand note of American Belting and Tanning Company, dated July 30, 1919, in the amount of $17,250.51, to the order of Federal Trust Company. (2) All indebtedness due or to become due from said American Belting and Tanning Company to said Federal Trust Company.’ On the same day the plaintiff filed in court the following stipulation: ‘It is hereby stipulated by counsel for the plaintiff that the second count of the plaintiff's declaration covers and includes the claim in the first count, and that both counts are for the same cause of action. The plaintiff does not claim more than $5,040 with interest on either count.’ At the trial the plaintiff waived the first count of its declaration.

After a trial to a jury and a verdict for the defendant, the case comes before us upon the defendant's exceptions to the allowance of ‘Count 2’ as an amendment to the plaintiff's declaration, and upon the plaintiff's exceptions to the admission of certain evidence and to the charge of the presiding judge.

[1] The first and fundamental question is, Had the judge authority to allow the addition, ‘Count 2,’ to the declaration? Upon the record it must be assumed the judge, who allowed the motion after a hearing, heard evidence or at least statements of counsel, and upon such evidence or statements found that the addition would enable the plaintiff to sustain the action for the cause for which it was intended to be brought. G. L. c. 231, §§ 51, 138; Mann v. Brewer, 7 Allen, 202;Driscoll v. Holt, 170 Mass. 262, 265, 49 N. E. 309;Clark v. New England Telephone & Telegraph Co., 229 Mass. 1, 5, 6, 118 N. E. 348;Holmes v. Carraher, 251 Mass. 536, 539, 146 N. E. 900. See Weinstein v. Miller, 251 Mass. 503, 146 N. E. 902. The defendant's exceptions are overruled.

At the trial on ‘Count 2’ of the declaration, there was evidence ‘that in June, 1919, the company, of which the defendant was President and Treasurer, was petitioned into bankruptcy; that, at that time, the plaintiff had a claim against the company of $6,300.00, represented by sundry notes, which were all endorsed by the defendant individually; that as a result of negotiations between the plaintiff and the defendant, the plaintiff agreed to put up money necessary to make a composition settlement with the company's creditors; and accordingly, a twenty per cent. composition offer was made and accepted by creditors; that the plaintiff advanced the money needed for the composition settlement and received from the company two promissory notes, both dated July 30, 1919, and payable on demand, one in the amount of $17,520.51, and one in the amount of $5,040.00, the latter being endorsed by the defendant as guarantor. * * * On September 4, 1919, in consequence of an agreement between the defendant and the plaintiff to the effect that the latter would forbear to demand payment of the above notes then, the defendant executed and delivered to the plaintiff the written guaranty which was introduced in evidence as Exhibit 1 and a copy of which appears in the second count of the declaration, and the company executed and delivered to the plaintiff a chattel mortgage of its personal property, which mortgage recites in the preamble ‘In consideration of one dollar and the forbearance of the grantee from demanding payment of the notes hereinafter described (the $17,520.51 and $5,040.00 notes) and other considerations.’'

‘There was evidence from the records of the plaintiff bank that the larger note was credited on the following dates with the following amounts: May 28, 1920, $5,040; June 24, 1920, $5,000; and October 5, 1920, $2,500. An assistant cashier testified that the amount of a note of $5,980.51 dated December 7, 1920, and signed by the company, was made up by the consolidation of one note of Thomas F. O'Keefe of $1,000 and the balance on the $17,520.51 note of the company, $4,980.51. The defendant testified that he received the $17,520.51 note, stamped ‘Paid,’ about that time, from the then treasurer of the company, and further testified that he had no knowledge of the $5,980.51 note; no credits appeared on the books of the plaintiff on either the $5,040 or $5,980.51 notes except payments of interest on both to June 1, 1921.'

‘There was further evidence that about October 31, 1921, a mortgage covering the assets of the company was foreclosed by the plaintiff and the assets sold at auction at which an agent of the plaintiff bid in the property for $6,000. Upon the plaintiff's books, in court, no entry appeared relating to the $6,000 from the sale of the personal property at said foreclosure sale. The defendant testified that the sale of the assets did not include accounts receivable.’

‘During the progress of the trial, counsel for plaintiff stated in open court that the plaintiff's claim in this case (based on the guaranty which is Exhibit 1) is the recovery of $5,040, it being admitted by the plaintiff that the bid of $6,000 for the assets of the company wiped away the indebtedness of $5,980.51 due from the company, and that there then remained on the books of the plaintiff as due from the company $5,040.00.’

[2] Subject to the exception of the plaintiff ‘the defendant testified that about December 7, 1920, a United Belting & Supply Company gave the company a Trade Acceptance of between $5,000 and $5,500, which was delivered to the bank; and in response to a question whether the bank collected on it the answer was ‘I presume so’; when asked ‘What bank?’ the defendant replied ‘The Federal Trust Company; I can't identify that’; that about...