Gramatan Nat. Bank & Trust Co. v. Pierce, 728

CourtUnited States State Supreme Court of Vermont
Citation121 Vt. 406,159 A.2d 781
Docket NumberNo. 728,728
PartiesGRAMATAN NATIONAL BANK AND TRUST COMPANY v. Carl W. PIERCE and Edith M. Pierce and Trustees.
Decision Date02 March 1960

Earle J. Bishop, Rutland, for plaintiff.

Clifton G. Parker, Morrisville, for defendants.


SHANGRAW, Justice.

This is an action in general assumpsit, with specifications seeking to recover on a note. The defendants answered by way of a general denial, and by special matters in defense alleged that the note was obtained through trickery, fraud, and unlawful combination and conspiracy between the payee therein named and the plaintiff. The defendants also claimed lack of consideration. Hearing was had by the court, findings of fact were made and judgment entered for the defendants. The plaintiff appealed and is here on exceptions to: (a) the exclusion of evidence offered by the plaintiff; (b) the admission of evidence objected to; (c) certain findings of fact; and, (d) to the judgment.

At the outset of the trial counsel stipulated that the evidence introduced, concessions of counsel, and stipulations and exhibits in the companion case of The Gramatan National Bank and Trust Company v. Henry A. Morey, et al., No. 2805, Lamoille County Court, might be considered in this case.

We now summarize the undisputed facts. On or about September 8, 1955, the defendants negotiated with a representative of the Globe Remodeling Co., Inc. doing business at Rutland, Vermont, for the purchase of house siding for their house. As a result of these negotiations on September 8, 1955 the defendants executed and delivered to the Globe Remodeling Co., Inc. their note in the principal sum of $3,044.40, for which they were to receive a sufficient quantity of siding to cover their house, also $1,200 in cash. This note was executed and delivered to the Globe Remodeling Co., Inc. before the company had delivered any of the siding material, or paid the defendants $1,200. The note was payable in monthly installments of $50.74. The note in question was endorsed by the Globe Remodeling Co., Inc. and on September 9, 1955 the plaintiff purchased it from The Gramatan Co., Inc. paying therefor the sum of $2,250. The defendants then resided in Morrisville, Vermont. The principal places of business of the plaintiff and The Gramatan Co., Inc. were in Bronxville, County of Westchester, New York. The defendants received for their note a quantity of packaged siding materials, and $400 in cash from the Globe Remodeling Co., Inc. The siding so delivered was never placed on the house by the Globe Remodeling Co., Inc. The defendants made no payment on the note. Sometime in the late fall of 1955, the defendants received a communication from the Globe Remodeling Co., Inc. requesting that the payment book furnished the defendants be forwarded to it, as this company desired to 'check' it. The defendants forwarded the book to the Globe Remodeling Co., Inc. and within a few days the book was returned with five installment payment sheets detached. The plaintiff received the five installment payments of $50.75. It does not know who made these payments but suspects the Globe Remodeling Co., Inc. may have made them.

The Gramatan Co., Inc., from which the plaintiff purchased the note in question, is engaged primarily in the business of handling commercial paper. A Mr. Henry Wunder, assistant cashier of the plaintiff, serviced notes similar to the one in question for the plaintiff for the past ten years, and purchased for the plaintiff a large number of Globe Remodeling Co., Inc. notes before purchasing the one in question. He also purchased notes for the plaintiff of Marvin S. Berger while he, Berger, was doing business as an individual and when he, Berger, did business under the firm and style name of the Globe Remodeling Co., and later after Mr. Berger incorporated as the Globe Remodeling Co., Inc. Many of the notes so purchased by the plaintiff bank, wherein the Globe Remodeling Co. or the Globe Remodeling Co., Inc. were the payees, were so-called F.H.A. notes. In the middle of 1954, several months before the plaintiff purchased the defendants' note, the Globe Remodeling Co., Inc. in banking parlance, was placed on 'precautionary.' This action by the Federal Government, in so far as F.H.A. notes were concerned, meant that greater precaution should be taken in the acquisition of Globe Remodeling Co., Inc., notes. In December 1955, approximately three and one-half months after purchasing defendants' note, the plaintiff discontinued altogether buying Globe Remodeling Co., Inc. and/or Berger notes.

The plaintiff excepts to that portion of finding No. 1 wherein the court found that the defendants negotiated for 'the purchase of a house 'siding' job' and also that portion of finding No. 2 wherein it was found that 'The Globe Remodeling Company, Inc. agreed to cover the defendants' house with siding material,' as not being supported by the evidence. The plaintiff urges that there was no agreement on part of the Globe Remodeling Co., Inc. to install the siding, however in finding No. 8, to which exceptions were taken, but not briefed and therefore waived, the court therein found, 'The siding delivered to defendants' home was never placed on the house by the Globe Remodeling Co., Inc.' We infer from this latter finding that the installation of the siding was to be made at the expense of the Globe Remodeling Co., Inc. To say the least, it is however an undisputed fact that a sufficient quantity of the siding was to be furnished the defendants to cover their house. This was not done, as only a part of the siding was delivered. These exceptions are not sustained.

The plaintiff's exceptions to the exclusion of evidence offered by the plaintiff, exceptions to the admission of evidence objected to, and exceptions to findings Nos. 8 and 12 have not been briefed and are therefore waived. Petition of Lyndonville Village, 121 Vt. 185, 187, 151 A.2d 319; State v. Severance, 120 Vt. 268, 275, 138 A.2d 425.

Findings Nos. 16 and 17, excepted to by the plaintiff read:

'16. Prior to the purchase of defendants' note (Plaintiff's Exhibit 1) in September, 1955, the plaintiff had experienced considerable trouble with Globe Remodeling Co., Inc. notes, or, as they were referred to, the 'Berger Notes.'

'17. Complaints reached the plaintiff bank in a number of cases that Globe Remodeling Co., Inc. had not delivered materials, had not performed the labor, and, in some instances like here, the cash consideration had not been paid. In many cases, the maker or makers of the notes had refused to pay and the plaintiff had instituted suit, as here.'

In our disposition of exceptions to findings we bear in mind that a finding must stand if supported by any substantial evidence, although there may be inconsistencies, or even substantial evidence to the contrary. In re Petition of Bolduc, 121 Vt. 20, 22, 146 A.2d 240; Petition of Stowell, 119 Vt. 298, 302, 305, 125 A.2d 807; and Petition of Citizens Utilities Co., 117 Vt. 285, 287, 91 A.2d 687. We must read the evidence in support of the findings, if reasonably possible, when considered as a whole. New England Road Machinery Co. v. Calkins, 121 Vt. 118, 120, 149 A.2d 734. In considering findings Nos. 16, and 17, it is sufficient to say, without going into detail, that there was evidence fairly and reasonably tending to support these findings.

Exceptions were also taken to the following findings:

'19. Mr. Wunder also testified that he exercised the usual precautions in purchasing defendants' note, however, we are unable to find that he, as Assistant Cashier of the plaintiff bank, or the firm from whom the plaintiff bank claims it acquired title to said note, did anything to determine the circumstances under which Globe Remodeling Co., Inc. obtained the note in question from the defendants. Had the plaintiff dispatched a letter to the defendants, similar to plaintiff's exhibit 2, in the Morey case, No. 2805, it would have been immediately alerted to the true facts and it is inconceivable it would have then purchased the note which is the subject of this litigation.

'20. At a time prior to the purchase of plaintiff's exhibit 1 by the plaintiff bank, it came to the attention of the officers of plaintiff bank that Federal Law enforcement officials were concerning themselves with the activities of Marvin S. Berger and/or Globe Remodeling Co. Inc. and, in fact, interrogated officers of the plaintiff bank relative to Globe Remodeling Co. Inc. and/or Berger notes. This, in and of itself, should have been sufficient to alarm plaintiff bank and to indicate to it that all was not 'complete and regular' and that an inquiry was in order.'

'22. In the face of all this, can it be said that the plaintiff purchased defendants' note, plaintiff's exhibit 1, in good faith as that term is defined by our Supreme Court ([Barre Trust Co. v. Ladd] 103 Vt. at page 406 )? We think not.

'23. The Court finds that plaintiff had knowledge of such facts pertaining to the payee of the note in question, that its action in purchasing the note under the circumstances revealed by the evidence amounted to bad faith and it cannot rightfully claim to be an innocent holder in due course merely by hiding behind the tainted garb of Gramatan Co. Inc., the intermediate agent in this case.

'24. To enter judgment against the defendants in this case for Two Thousand, Seven Hundred Ninety Dollars and Seventy Cents, ($2,790.70) plus 6% interest plus 18% attorney fees, with taxable costs, under the circumstances would be a rank injustice. This Court will have no part of it.

'25. The Court finds that plaintiff failed to exercise that degree of diligence and caution expected and required of a business institution, especially a banking institution, in the purchase of defendants' note to make of itself an innocent holder in due course.

'26. ...

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