J.G. Brill Co. v. Norton & T. St. R. Co.

• Decision Date: 27 November 1905
• Citation: 75 N.E. 1090,189 Mass. 431
• Parties: J. G. BRILL CO. v. NORTON & T. ST. RY. CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

189 Mass. 431

75 N.E. 1090

J. G. BRILL CO. v. NORTON & T. ST. RY. CO.

Supreme Judicial Court of Massachusetts, Bristol.

November 27, 1905

COUNSEL

Warren & Garfield and Irvin McDowell Garfield, for plaintiff.

Hall & Hagerty, for defendant.

OPINION

LORING J.

This is an action on two promissory notes, indorsed in the name of the defendant corporation by Charles E. Bibber, treasurer. The defendant corporation is a consolidated corporation made up of four constituent corporations, one of which was the Mansfield & Easton Street Railway Company. The consolidation was authorized by the railroad commissioners, under Rev Laws, c. 112, by an order dated July 20, 1899. Deeds from each of the four constituent companies to the consolidated company were dated and apparently were delivered on August 1 1899. Each of these deeds contained this clause: 'In consideration of the foregoing conveyances, as well as by force of the statute above referred to [namely, Acts 1897, p. 241, c. 269], the grantee hereby assumes and agrees to pay and discharge all the funded and unfunded debts and obligations of, and all lawful claims and demands now outstanding or hereafter at any time arising against the grantor.' An organization meeting of the consolidated company was held on August 1, 1899, and adjourned to August 15, 1899, and it was on the latter day, as we understand the bill of exceptions, that by-laws were adopted providing that the treasurer should issue no notes until they had been approved on the face of the same by at least two of the executive committee, and that notes otherwise issued should be void.

The notes sued on did not comply with that provision. One of them, for $2,000, was issued on August 14, 1899, the day before that by-law was adopted. The other, for $3,000, on September 16, 1899, a month after it was adopted. Each was made by the Bibber-White Company, payable to the order of 'ourselves,' and indorsed first by the Bibber-White Company and second by the defendant Charles E. Bibber, treasurer. It appeared that the Bibber-White Company were street railway contractors, who had a contract for building the Mansfield & Easton Street Railway Company and the railways of the three other companies, which by consolidation became the defendant corporation, and that four cars were sold to the Bibber-White Company by the plaintiff corporation, which received therefor two notes of that company, each for $3,750, made by the Bibber-White Company, payable to the order of 'ourselves' and indorsed, first, by the Bibber-White Company, and, second, by the Mansfield & Easton Street Railway Company, by E. D. Hewins, treasurer. These original notes were given in the winter of 1898-99, and were renewed from time to time by similar notes. The last of these renewal notes for which the $2,000 note here sued on was given was for $2,200, dated June 15, 1899, payable in two months; $200 being paid at its maturity. The last of the renewal notes for which the $3,000 note here sued on was given was for $3,000, dated July 20, 1899, and payable in two months. The difference between $3,750, for which the original notes were given, and the sums of $2,200 and $3,000 had been paid by the Bibber-White Company at the maturity of the original notes for $3,750 each, or of renewals thereof.

Charles E. Bibber, who indorsed the notes sued on in the name of the defendant corporation, was the president of the Bibber-White Company and general manager of the Mansfield & Easton Street Railway Company. The plaintiff's treasurer testified that he sold the four cars to the Bibber-White Company and forwarded them on their order, two to one company and the other two to another company. He also testified that the plaintiff got 'their note indorsed by two companies which were specifically called for in the contract,' and that his company sold the cars to the Bibber-White Company, 'understanding that' Charles E. Bibber 'was an official of the railway company.'

At a meeting of the stockholders of the Mansfield & Easton Street Railway Company held on March 12, 1898, it was voted 'that a committee of three be elected, to consist of Franklin Mead, Douglas A. Brooks, and George H. Swasey, with full powers to contract for the financing and construction of the road, together with the necessary power and equipment.' There was evidence that the members of this committee knew of the indorsement by the treasurer of the Mansfield & Easton Street Railway Company. This vote was ratified by the directors on March 18, 1898. There were seven directors of the Mansfield & Easton Street Railway Company, and there was evidence that four of the seven knew of these indorsements. There was no vote of the directors authorizing them. There was evidence that of the four cars paid for by the two notes for $3,750 each two were originally delivered on the order of the Bibber-White Company by the plaintiff to the Mansfield & Easton Company, and subsequently were moved over to the tracks of another of the four constituent companies, and that the other two never came to the Mansfield & Easton Company.

The plaintiff requested the following rulings:

'(1) That upon all the evidence the plaintiff That, as the Mansfield & Easton Street Railway in suit, together with interest and costs. (2) That the indorsements upon the notes in suit, being given in consideration of the cancellation of prior notes indorsed by a street railway company, the obligations of which the defendant has assumed, were given for a valuable consideration, and the indorsements are not accommodation indorsements. (3) Thjat, as the Mansfield & Easton Street Railway Company received the cars for which notes bearing its indorsement were given, said indorsements of the Mansfield & Easton Street Railway Company upon said notes were not accommodation indorsements, but were indorsements for a valuable consideration. (4) That the treasurer of the Mansfield & Easton Street Railway Company had authority to indorse the notes of which the notes in suit are renewals. (5) That the treasurer of the Norton & Taunton Street Railway Company had authority to indorse the notes in suit. (6) That the acts of the treasurer of the Mansfield & Easton Street Railway Company in continuing to give the indorsements of said company upon notes, of which the notes in suit are renewals, was such that the directors of said company could have known of said indorsements, and that the failure of the directors to object thereto amounted to a ratification of the giving of said indorsements upon the part of said directors. (7) That the treasurer of the Norton & Taunton Street Railway Company had implied authority to indorse the notes in suit. (8) That the treasurer of the Mansfield & Easton Street Railway Company had implied authority to indorse the notes of which the notes in suit are renewals. (9) That the treasurer of an electric street railway company in the process of construction has implied authority to indorse notes given for the purchase of cars adapted for street railway purposes and actually used by said street railway company. (10) That in selling the cars, for which the notes indorsed by the Mansfield & Easton Street Railway Company were given, the plaintiff relied upon the credit of the Mansfield & Easton Street Railway Company, in part at least. (11) That the Norton & Taunton Street Railway Company was a corporation organized on or about August 1, 1899, by the consolidation of the Mansfield &

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