J.J. Goodwin, Trustee of the Bankrupt Estate of the Cutler, Storer And Fay Co. v. Barre Savings Bank And Trust Co

• Decision Date: 15 February 1917
• Citation: 100 A. 34,91 Vt. 228
• Parties: J.J. GOODWIN, TRUSTEE OF THE BANKRUPT ESTATE OF THE CUTLER, STORER AND FAY CO. v. BARRE SAVINGS BANK AND TRUST CO
• Court: Vermont Supreme Court

100 A. 34

91 Vt. 228

J.J. GOODWIN, TRUSTEE OF THE BANKRUPT ESTATE OF THE CUTLER, STORER AND FAY CO. v. BARRE SAVINGS BANK AND TRUST CO

Supreme Court of Vermont

February 15, 1917

January Term, 1917.

ASSUMPSIT, brought by plaintiff as trustee of the bankrupt estate of the Cutler, Storer and Fay Company, to recover the amount collected by defendant, after the bankruptcy, on two contracts for the manufacture of granite monuments. Plea, the general issue. Trial by jury at the September Term, 1915 Washington County, Waterman, J., presiding. Verdict for plaintiff. Defendant excepted. The case is stated in the opinion.

Judgment reversed and cause remanded.

Richard A. Hoar for defendant.

Present: MUNSON, C. J., WATSON, HASELTON, POWERS, and TAYLOR, JJ.

OPINION

POWERS

The plaintiff is trustee in bankruptcy of the Cutler, Storer & Fay Company. He seeks to recover the amount collected by the defendant since the date of the adjudication, August 5, 1914, on two certain monument contracts placed in its hands by the bankrupt prior to that date.

The bankrupt was engaged in the granite business in Barre, and for some years had been making monuments for William Adams & Son, retail dealers in Lexington, Ky. The business was done in this way: Adams & Son would sell a monument to a customer under a written contract, and would engage the bankrupt to manufacture and supply it under a written contract, assigning to the bankrupt the customer's contract as security. Five such contracts came to the bankrupt, and five monuments were manufactured and delivered by it thereunder. These contracts were respectively called the Wallingford, Redwine, Mulligan Bowyer and Willett contracts. After the monuments called for thereby were shipped, the Wallingford and Redwine contracts were formally assigned by the bankrupt to the defendant as security for certain notes held by the defendant against the bankrupt. Later, and before the bankruptcy, the other three contracts were turned over to the defendant, but the parties disagree as to the arrangement under which this was done. The plaintiff claimed, and his evidence tended to show, that, for the purpose of saving expense, these three contracts were placed in the defendant's hands for collection, only. The defendant claimed, and its evidence tended to show, that the three contracts were orally assigned to it by the bankrupt as security for a large indebtedness then outstanding.

The amounts due under the Willett and Bowyer contracts were collected by the defendant after the adjudication of bankruptcy, and have not been paid over to the trustee.

The defendant seasonably objected and excepted to the admission of the evidence regarding the contracts not covered by the specification on the ground that they were not involved in any way, and therefore the evidence was irrelevant and inadmissible. But evidence which throws any light on the questions actually in issue is admissible, though it relates to a matter not directly involved. Rob. Vt. Dig. 991. It was necessary to an intelligent understanding of the plaintiff's case for the jury to know about the Wallingford and Redwine contracts, how they were assigned to the defendant, and how they were handled by it. The record shows that considerable liberality was allowed the plaintiff in this matter, but he expressly disclaimed any advantage by way of recovery therefrom, and if any error was committed it was not prejudicial.

Mr. Drew, the defendant's treasurer, was a witness for the plaintiff. In his direct examination, he was asked if the defendant ever had a written assignment of the Mulligan contract and replied in the negative. In cross-examination, he was asked if the defendant had any agreement about it, and when he started to explain, objection was made by the plaintiff on the ground that this was not gone into in the direct examination, and therefore it was not proper cross-examination. It was excluded and the defendant excepted. The partial answer given shows plainly that the witness was about to say that the defendant had an oral assignment of the contract specified. The relation assumed by the bank toward this contract was subject of inquiry in the direct examination. Therefore the excluded question was proper cross-examination, since it related to that subject matter, and tended to explain and modify it in an essential particular. Stiles v. Estabrook, 66 Vt. 535, 29 A. 961. Nor was the error in its exclusion cured by allowing the defendant to give the evidence in its defence. One has a right to have the direct and cross-examinations placed in direct contrast before the jury. Stiles v. Estabrook, supra; State v. Hollenbeck, 67 Vt. 34, 30 A. 696; People v. Becker, 210 N.Y. 274, 104 N.E. 396. The error was prejudicial, because it related to a vital feature of the defence. It had appeared that the Wallingford and Redwine contracts were assigned in writing. The other three contracts came to the defendant together in the same way and under the same arrangement. That this arrangement was an oral assignment was a fact of which the defendant should have been allowed to give evidence in the cross-examination of Mr. Drew.

Mr. Cutler, the president of the bankrupt, was allowed to testify concerning information obtained by him in Lexington in regard to the probable cost of collecting the contracts in question. To this the defendant excepted. We cannot say that this evidence was too remotely relevant to be admissible. The information thus obtained was communicated to the defendant and in some measure furnishes an explanation of why it was thought that expense would be saved by turning the contracts over to the defendant for collection.

At the close of the evidence, the defendant moved for a directed verdict, and excepted when that motion was overruled. In support of this exception, it is urged that the law gives the defendant a lien on the avails of these contracts for any debt it holds against the bankrupt, and that this lien exists even though the contracts were delivered to it for the purpose of collection only. But the plaintiff's evidence tended to show that it was expressly agreed that the defendant would not keep the money, but would turn it over to the bankrupt. Mr. Cutler testified that he told Mr. Drew, when the latter came to him and asked to have the two contracts here in question turned over to the defendant for collection to save expense, that he did not want to do it because he "was afraid the bank would gobble all the money," and he wanted it to pay to other creditors; and that Mr. Drew assured him that the bank would not keep the money, but would turn it over to him. Here, then, was an express agreement not to assert a lien. Against such an agreement a lien cannot stand. A banker's lien does not apply when there is a contract, express or implied, inconsistent with such lien. 1 Jones, Liens, § 244. The lien does not apply when the circumstances or a particular mode of dealing are inconsistent with such lien. Reynes v. Dumont, 130 U.S. 354, 32 L.Ed. 934, 9 S.Ct. 486. "It is familiar law," says Mr. Justice Brewer in Joyce v. Auten, 179 U.S. 591, 45 L.Ed. 332, 21 S.Ct. 227, "that a bank receiving notes for collection is entitled, in the absence of a contract expressed or implied to the contrary, to retain them as security for the debt of the party depositing the notes." With evidence in the case tending strongly to establish an express agreement inconsistent with a lien, the case was properly for the jury and the motion for a verdict could not prevail.

The defendant seasonably presented six requests to charge, and excepted "to the refusal and neglect to...