Lowell v. Bickford
| Decision Date | 04 May 1909 |
| Citation | 88 N.E. 1,201 Mass. 543 |
| Parties | LOWELL v. BICKFORD et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Clarence F. Eldredge, for plaintiff.
William A. Abbott, for defendants.
This case was tried by a judge without a jury. He made a general finding against both the defendants, and the case is here on exceptions. The evidence warranted a finding that the following were the facts:
The Winnisimmet National Bank was the holder of a promissory note for $1,000, signed by one O. H. Perry, payable to and indorsed by the defendant Scott Bickford, which fell due on March 1, 1902. This note had been discounted for Bickford but Bickford handed the proceeds to Perry. At maturity the note came back unpaid and duly protested. The cashier of the bank then demanded payment of Bickford. Bickford said that he was unable to pay it then, that the maker was sick and would pay it as soon as he got well. On the next day the bank agreed to give Bickford and Perry reasonable time on the note if Bickford would give the bank a demand note for the same amount, signed by him and his wife. This was done on the one hand to put the bank in the position of having paper for the Perry note which was not overdue, and on the other hand to avoid pressing Bickford to an immediate payment; and this was stated in terms by the officers of the bank to Bickford. Thereupon the note here sued on was handed to the bank by Bickford, on the day of its date. The note sued on is a joint and several note, payable on demand to the order of the bank, signed by Bickford and his wife.
The plaintiff admitted that any defenses which would have been open had the action been brought by the bank should be open in this action.
We will deal with the questions as they were dealt with by counsel for the defendants, without regard to the several exceptions.
1. There is nothing inconsistent in the bank's agreeing to give time for a reasonable period on the old note if a new note payable on demand, signed by Scott Bickford and his wife, was given as collateral. It is true that the bank could have sued Bickford and his wife immediately on the new note. But Bickford and his wife appear to have been willing to take their chance of that if time was given on the old note. And the reason why they were willing to take that chance on the new note is plain. The officers of the bank did not dare to leave an unpaid overdue note uncollected and not in suit, unless they had security for it. But the new note signed by Bickford's wife as well as by Bickford himself, being payable on demand, could be safely left uncollected and not in suit.
2. The promise of the bank to forbear suing on the original note was a binding promise. The case does not come within Jennings v. Chase, 10 Allen, 526, and Walker v. Russell, 17 Pick. 280, relied on by the defendants. In delivering to the bank another note signed by his wife as well as by himself the defendant did something he was not theretofore bound to do.
3. Taking the demand note as collateral for the pre-existing debt made the bank a holder for value of the note as against Carrie S. Bickford, who was an accommodation maker. Rev. Laws, c. 73, § 42. See, also, Goodwin v. Mass. Loan & Trust Co., 152 Mass. 189, 25 N.E. 100; National Revere Bank v. Morse, 163 Mass. 383, 40 N.E. 180, decided before the enactment of the negotiable instruments act. The fact that the demand note was payable to the bank did not prevent its becoming a holder for value. Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 66 N.E. 646, 97 Am. St. Rep. 426; Thorpe v. White, 188 Mass. 333, 74 N.E. 592. An accommodation party to a note cannot set up lack of a consideration against a holder for value. Rev. Laws, c. 73, § 46. This case therefore does not come within Ellis v. Clark, 110 Mass. 389, 14 Am. Rep. 609, relied on by the defendants. No question of pleading was raised at the trial, and by Rev. Laws, c. 173, § 3, the two makers of this note could have been joined in one action on their several contracts therein contained.
4. There was no pre-existing debt in existence when the wife's note was given in Widger v. Baxter, 190 Mass. 130, 76 N.E. 509, 3 L. R. A. (N. S.) 436. Here there was.
5. We have already held that the evidence warranted a finding for the plaintiff. The judge was not bound to make specific findings of fact, even if requested by the defendants to do so.
6. It is the settled law of this commonwealth that a holder of a...
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