Henry Wood's Sons Co. v. Schaefer

• Decision Date: 19 May 1899
• Citation: 173 Mass. 443,53 N.E. 881
• Parties: HENRY WOOD'S SONS CO. v. SCHAEFER.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

173 Mass. 443

53 N.E. 881

HENRY WOOD'S SONS CO. v. SCHAEFER.

Supreme Judicial Court of Massachusetts, Suffolk.

May 19, 1899

COUNSEL

B.L.M. Tower, R.S. Bartlett, and E.O. Hiler, for plaintiff.

W.R Bigelow, for defendant.

OPINION

HOLMES J.

This is an action upon a promissory note. The defense is a denial that the transaction was what it appeared to be on the face of the papers. There is also a claim in set-off for services as president of the plaintiff corporation. At the trial the plaintiff's evidence was that the plaintiff discounted for the defendant a note, of which the note in suit is a renewal, giving a check for $50 less than the note, and receiving 25 shares of the Corson Coal Company as collateral security as soon as the defendant was able to release them from a previous pledge, by the money thus obtained. The note and the certificate, indorsed in blank by the defendant, were produced, and the execution of the instrument was not denied. The defendant testified that, in view of services which he had rendered to the plaintiff Edmund M. Wood, its treasurer and manager, agreed to buy the 25 shares of him, and gave him the check as payment for them and that the defendant, to enable Wood "to square himself with his own corporation," from which the money came, gave Wood "the use of" the original of the note in suit, with the shares as collateral security, Wood promising to take care of it when it should fall due. The judge left it to the jury whether the defendant's story was true, and instructed them to find for him if they accepted it. They found for the plaintiff.

It would be hard to say that the course adopted did not save all the defendant's rights if the alleged agreement had been proved, although the instructions were not so specific as those asked. It really gave the defendant quite as good a chance to prevail upon his improbable story. But it is plain, further, that, even on the defendant's account, Wood's agreement was collateral and personal. The defendant's note was to be given to the company in order to justify Wood's draft upon it to pay for the shares. If the defendant did not contemplate a fraud on the company, the company was entitled to enforce the note, although Wood promised on his own behalf that he would forestall its doing so by paying it. Finally, if the defendant's counsel, contrary to the plain meaning of the defendant's evidence, wanted to contend that Wood's agreement was an agreement by the company not to enforce the note according to its tenor, such an agreement, made at the time the note was delivered, is in flat contradiction of the instrument, and cannot be proved. Perry v. Bigelow, 128 Mass. 129; Hall v. Bank (Mass.) 53 N.E. 154.

The shares held as security declined in value. A ruling was asked to the effect that, if the shares were given as collateral security either by the defendant or by Wood, and if sold within a reasonable time...