Lee v. Whitney

• Decision Date: 20 June 1889
• Parties: LEE v. WHITNEY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

149 Mass. 447

21 N.E. 948

LEE v. WHITNEY.

Supreme Judicial Court of Massachusetts, Suffolk.

June 20, 1889

COUNSEL

J. Winthrop Pickering, for plaintiff.

Frank D. Allen, for defendant.

OPINION

FIELD J.

The defendant's case, as stated in the exceptions, is that the plaintiff bought of Williams, for $3,000, 200 shares of the stock of the Campbell Engine Company, and received from him a written agreement "guarantying her against loss upon the investment;" and, as collateral security for the performance of this agreement, she also received from him "a certificate of preferred stock in the Rutland Railroad Company, purporting to be for one hundred shares but which there was evidence tending to show had been fraudulently raised;" and that Abbott, the attorney of the plaintiff, discovering or believing that the certificate had been raised from one to one hundred shares, "went to Williams, and demanded additional security, and got this note in suit." The note is for $3,500, signed by Williams payable one month after date to the order of the defendant and indorsed by him. The defendant indorsed it at the request of Williams, and for his accommodation. The exceptions state that "the defendant resisted payment, on the ground among others, that his indorsement had been obtained from him through the false and fraudulent suppression by Williams, made with the plaintiff's knowledge, of the fact that Williams had criminally raised from one to one hundred shares" this certificate of stock, for which the note in suit was intended by Williams and the plaintiff to be and actually was substituted. The court instructed the jury that if Williams obtained the defendant's indorsement "through the fraudulent suppressions of the truth as to the certificate, and if the plaintiff or his agent knew this at the time they accepted the note, that would be a bar to the plaintiff's recovery." The court refused to give an instruction that knowledge on the part of the plaintiff or her agent "of the crime Williams had committed in raising the certificate was of itself sufficient to put them upon their inquiry, and if with such knowledge they remained silent, and made no inquiry either of Williams or of the defendant, they must be presumed to have known and assented to Williams' fraud," and instructed the jury that "the plaintiff would not lose her right to recover by mere carelessness, or the failure to make such inquiries as...