In re Stevens

• Decision Date: 21 August 1902
• Court: Vermont Supreme Court
• Parties: In re STEVENS et al.

52 A. 1034

74 Vt. 408

In re STEVENS et al.

Supreme Court of Vermont. Franklin.

Aug. 21, 1902.

Appeal in chancery, Franklin county; Start, Chancellor.

Proceedings in chancery for winding up the partnership of Stevens & Adams, successors of C. P. Stevens & Co., of Richford, W. B. Loeklin being the receiver. From a decree disallowing the claim of the Lamoille County National Bank, the claimant appeals. Reversed.

Argued before TAFT, C. J., and ROWELL, TYLER, MUNSON, WATSON, and STAFFORD, JJ.

R. W. Hulburd and George M. Powers, for appellant.

Rustedt & Locklin and Young & Young, for appellee.

WATSON, J. On April 9, 1897, Lamoille County National Bank held an overdue draft for $1,000, drawn by C. P. Stevens & Co., of Troy, payable to the order of D. H. Buck, at said bank, accepted by R. W. Adams and C. P. Stevens & Co., of Richford, and indorsed by D. H. Buck, C. P. Stevens, and R. W. Adams. The acceptance by the latter firm was solely for the accommodation of the former firm, which consisted of C. P. Stevens, D. H. Buck, and one George E. Young. Buck kept the books and attended to the financial business of the concern. The bank seeks to have this draft allowed against the firm of Stevens & Adams, successors to the firm of C. P. Stevens & Co. of Richford, and who assumed the obligations of the latter firm. It is contended that the draft was without consideration, and that, therefore, the bank is not entitled to recover thereon. But upon the facts found this contention is untenable. Prior to the giving of the draft the bank held a large amount of overdue paper, on which the name of C. P. Stevens & Co. of Troy appeared as makers, sureties, or indorsers. The bank had been pressing for payment of the overdue paper of the firm, and in response to their demands in this regard C. P. Stevens and D. H. Buck went to Hyde Park, and there met the president and vice president of the bank. The president called their attention to all the notes on which the name of the firm appeared as makers, sureties, or indorsers, except a note for $1,300, not necessary to notice further. There was discussion between Stevens and Buck regarding some of the notes as they were called off. Stevens questioned the rightfulness of the company's signature on the Hammond & Buck paper, and claimed to Buck that the latter had wrongfully signed the firm name thereto. The question of payment being discussed, Stevens and Buck expressed the present inability of the firm to pay their indebtedness to the bank, and asked for further time. The president inquired what additional security could be given, or how the paper could be strengthened, to which Stevens and Buck replied that they thought the firm of C. P. Stevens & Co. of Richford would accept drafts drawn by the Troy firm, and that R. W. Adams and C. P. Stevens would individually indorse them. It was thereupon understood and agreed between the parties that, if no questions were raised as between the bank and C. P. Stevens & Co. of Troy regarding the validity of any of the paper held by the bank on which the name of that firm appeared and if four drafts for the sum of $1,000 each should be drawn by the Troy firm on the Richford firm, and accepted by the latter, and indorsed by Adams and Stevens individually, the bank would receive the drafts, and would not press for payment on any of the papers of C. P. Stevens & Co. of Troy until the drafts should severally mature in 45, 75, 105, and 135 days after date, respectively. Within a few days thereafter the drafts were drawn, accepted, indorsed, sent to the bank, and received by it according to this understanding and agreement. The proposition of the bank, accepted by C. P. Stevens & Co., required both parties to do and perform certain matters and things therein specified. It was, therefore, a case of mutual and concurrent promises, which afford a sufficient legal consideration for each. Lamson v. Lamson, 52 Vt. 595; Bank v. Sabin, 48 Vt. 239.

It is further contended that the draft has been paid. When the draft was overdue and unpaid, the bank pressed for payment of the same, and on April 9, 1897, Buck, in response to a letter from the president of the bank, notified the latter in writing that C. P. Stevens & Co. of Troy had made a note for $1,000, and sent the same to Richford for R. W. Adams to indorse and return, and that then they would forward it to him, the president. This letter was received by the president before he received the note referred to therein. As stated in the letter, C. P. Stevens & Co. of Troy made and signed a promissory note, bearing date April 9, 1897, for the sum of $1,000, payable in 90 days from date, to the order of R. W. Adams, at said bank, procured the same to be indorsed by said Adams, and D. H. Buck also indorsed it. It was then forwarded to the bank, and received by it in due course of mail. The note, when sent, was not accompanied by any statement of the purpose for which it was sent, nor by any directions as to its application; but the fact is found that it was made and sent in response to the demand of the bank for the payment of this draft, then remaining unpaid, and for the purpose of renewing the same, and obtaining an extension of time on the indebtedness. The bank retained the note, and on the 3d day of May following the president wrote a letter to Buck, asking him to send to the bank $56 to pay the discount on...