Leonard v. Woodward
| Decision Date | 28 February 1940 |
| Parties | LEONARD v. WOODWARD. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
OPINION TEXT STARTS HERE
Exceptions from Superior Court, Bristol County; Morton, Judge.
Action by Barbara M. Leonard, administratrix, against Claude M. Woodward on a promissory note. Judgment for plaintiff, for $2,008.75, and defendant brings exceptions.
Exceptions overruled.
No argument nor brief for plaintiff.
E. S. White and L. I. Phillips, both of Taunton, for defendant.
This action is upon a promissory note for $1,500, payable on demand to the plaintiff'sintestate and signed on its face, apparently as joint makers, by the defendant and one Emery. At the trial and at the argument before us the defendant took the position that he signed the note for the accommodation of the plaintiff's intestate, and that as to him the note was without consideration. He saved his rights on these points by a motion for a directed verdict, by requests for rulings, and by exceptions to portions of the charge claimed to be inconsistent with his requests.
Evidence favoring the plaintiff tended to show that the plaintiff found the note in her intestate's safe deposit box; that on the day of the date of the note her intestate lent $1,500 to Emery by giving him a check for that amount; and that Emery was the defendant's father-in-law. The defendant testified that he signed the note for the accommodation of the plaintiff's intestate and received nothing of value for so doing; that he was acquainted with the plaintiff's intestate but was not related to him; that Emery asked him to sign as an accommodation to the plaintiff's intestate, as the latter wanted a note with joint makers, so that he could discount it at the bank if he wished to do so; that when the note was signed both the plaintiff's intestate and Emery understood that the defendant was not to be held responsible by either of them; and that the defendant never authorized or consented to the check for $1,500 being made payable to Emery.
Of course the defendant would not be liable to a party for whose accommodation he signed. Conners Brothers Co. v. Sullivan, 220 Mass. 600, 605, 108 N.E. 503;Goodman v. Gaull, 244 Mass. 528, 530, 138 N.E. 910;Tanners National Bank of Woburn v. Dean, 283 Mass. 151, 154, 186 N.E. 219;Great Barrington Savings Bank v. Day, 288 Mass. 181, 184, 192 N.E. 533;Quincy Trust Co. v. Woodbury, Mass., 13 N.E.2d 377. But the jury were not obliged to find that the defendant signed for the accommodation of the plaintiff. They could think it more probable that the defendant signed at the request of his father-in-law, Emery, for the accommodation of Emery in order that Emery might get the loan of $1,500 from the plaintiff's intestate. On this record it was for the jury to say for whose accommodation the defendant signed. Jacobs v. Brown, 259 Mass. 232, 237, 156 N.E. 26;Salem Trust Co. v. Deery, 289 Mass. 431, 436, 194 N.E. 307. If the defendant signed for the accommodation of Emery, in order that Emery might receive the $1,500, the defendant would be liable to the plaintiff's intestate and to the plaintiff. An accommodation party ‘is liable on the instrument to a holder in due course, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party.’ G.L.(Ter.Ed.) c. 107, § 52; Neal v. Wilson, 213 Mass. 336, 337, 100 N.E. 544;Tanners National Bank of Woburn v. Dean, 283 Mass. 151, 154, 186 N.E. 219;Salem Trust Co. v. Deery, 289 Mass. 431, 435, 194 N.E. 307;Waltham Trust Co. v. Cincotta, 293 Mass. 272, 276, 199 N.E. 910. The plaintiff's intestate was ‘prima facie’ a holder in due course. G.L.(Ter.Ed.) c. 107, § 82; Beacon Trust Co. v. Ryder, 273 Mass. 573, 174 N.E. 725. A payee may be a holder in due course, G.L.(Ter.Ed.) c. 107, § 75; Liberty Trust Co. v. Tilton, 217 Mass. 462, 463, 105 N.E. 605, L.R.A.1915B, 144;Russell v. Bond & Goodwin, Inc., 276 Mass. 458, 463, 177 N.E. 627;Karlsberg v. Frank, 282 Mass. 94, 95, 184 N.E. 387.
Evidence that the plaintiff's intestate and Emery ‘understood’ that the defendant would not be held responsible did not disclose a separate ground of defence, and except for its bearing upon consideration and accommodation, would have been inadmissible, as it tended to vary the written contract embodied in the note. Wolff v. Parkins, 254 Mass. 10, 13, 149 N.E. 691;Starks v. O'Hara, 266 Mass. 310, 313, 314, 165 N.E. 127;Reardon v. Murdock, 292 Mass. 362, 365, 198 N.E. 268;Quincy Trust Co. v. Woodbury, Mass., 13 N.E.2d 377.
What has been said indicates that there was evidence warranting a verdict for the plaintiff, and that there was no error in refusing to direct a verdict for the defendant or in refusing to rule as matter of law that there was no consideration for the note.
But the defendant also asked for instructions that the burden of proof upon the issue of consideration was upon the plaintiff. The defendant had pleaded want of consideration. At the trial he did not, so far as appears, concede that a loan from the plaintiff's intestate to Emery formed any part of the transaction, and his contention seems to have been that, at least as far as he was concerned, there was no consideration in any form for the note. Compare Robertson v. Rowell, 158 Mass. 94, 96, 32 N.E. 898,35 Am.St.Rep. 466. It would seem, therefore, that the issue of consideration was fully open to the defendant, Salem Trust Co. v. Deery, 289 Mass. 431, 435, 436, 194 N.E. 307, and that he was entitled to have the court deal with his requests for instructions as to the burden of proof on that issue. These requests raise the question whether, when want of consideration is pleaded as a defence to a negotiable instrument, and evidence is introduced tending to show want of consideration, the burden of proof on that issue by a preponderance of the evidence, as distinguished from the burden of merely introducing some evidence, rests upon the plaintiff or upon the defendant.
Before the enactment in this Commonwealth of the negotiable instruments law, St.1898, c. 533, it had become settled that the production of the instrument, signed by the defendant, was prima facie evidence of consideration, but when evidence was introduced tending to show lack of consideration the burden of proof was upon the plaintiff. Delano v. Bartlett, 6 Cush. 364;Burnham v. Allen, 1 Gray 496, 499-502;Noxon v. De Wolf, 10 Gray 343, 346;Morris v. Bowman, 12 Gray 467;Estabrook v. Boyle, 1 Allen 412;Perley v. Perley, 144 Mass. 104, 107, 10 N.E. 726. Compare, however, Parish v. Stone, 14 Pick. 198, 201, 202,25 Am.Dec. 378;Jennison v. Stafford, 1 Cush. 168,48 Am.Dec. 594. But section 28 of the original negotiable instruments law, now G.L.(Ter.Ed.) c. 107, § 51, reads as follows: ‘Absence or failure of consideration is matter of defence as against any person not a holder in due course; and partial failure of consideration is a defence pro tanto, whether the failure is an ascertained and liquidated amount or otherwise.’ See also section 47 (original section 24) providing that ‘Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party thereto for value.’ It would seem that by ‘matter of defence’ was meant matter which the defendant must not only plead but must also prove, and that one purpose of this section was to place the burden of proof upon the defendant, thereby resolving a preexisting conflict of authority among the decisions of various jurisdictions and making the rule uniform in accordance with the general scheme of the act. It is exceedingly difficult to construe the words ‘matter of defence’ as meaning matter which the plaintiff must disprove. Nevertheless in two cases since the passage of the negotiable instruments law this court has followed its former rule. Huntington v. Shute, 180 Mass. 371, 62 N.E. 380,91 Am.St.Rep. 309;Lombard v. Bryne, 194 Mass. 236, 80 N.E. 489. The first of these cases seems really to have turned upon an instruction by the trial judge as to the meaning of the words ‘value received.’ The second discusses the point that the matter there offered by the defendant was not in the nature of confession and avoidance. A search has revealed five instances in which the court has reiterated its former rule by way of dictum, but where the statement seems unnecessary to the decision. Seager v. Drayton, 217 Mass. 571, 572, 105 N.E. 461;Conners Brothers Co. v. Sullivan, 220 Mass. 600, 605, 108 N.E. 503;Tremont Trust Co. v. Brand, 244 Mass. 421, 422, 138 N.E. 564;Wolff v. Perkins, 254 Mass. 10, 13, 149 N.E. 691;Salem Trust Co. v. Deery, 289 Mass. 431, 433, 194 N.E. 307. All of the cases following or mentioning the old rule reach back for their authority, directly or indirectly, to the cases decided before the passage of the negotiable instruments law. None of them discusses or even...
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