McFarland v. Lynch, 7852.

• Decision Date: 19 February 1938
• Docket Number: No. 7852.,7852.
• Citation: 197 A. 202
• Parties: McFARLAND v. LYNCH.
• Court: Rhode Island Supreme Court

197 A. 202

McFARLAND

v. LYNCH.

No. 7852.

Supreme Court of Rhode Island.

February 19, 1938.

Exceptions from Superior Court, Providence and Bristol Counties; Herbert L. Carpenter, Judge.

Action in assumpsit by Margaret McFarland against William J. Lynch. The defendant's motion for a nonsuit was granted, and the plaintiff brings exceptions.

Exceptions sustained and case remitted for a new trial.

Hartigan, Mullen & Roberts and Wilfrid E. McKenna, all of Providence, for plaintiff. Charles F. Risk, of Pawtucket, for defendant.

CAPOTOSTO, Justice.

This action in assumpsit was tried before a justice of the superior court sitting with a jury. At the conclusion of the plaintiff's testimony, the trial justice granted the defendant's motion for a nonsuit. The case is before us solely on the plaintiff's exception to this ruling.

The declaration is in five counts. The first count is in indebitatus assumpsit; the second, third, and fourth counts charge the defendant as indorser on three promissory notes; and the fifth count contains the common counts. The defendant filed a plea of the general issue to all counts, and also filed a special plea to the second, third, and fourth counts, denying consideration and that the plaintiff was a holder in due course.

Omitting all reference to matters of accounting, the pertinent evidence on the various issues is as follows: The defendant was engaged in the real estate and mortgage business in the city of Pawtucket, and one Mary Kelly was connected with him in some way in that business. Mary Kelly was a first cousin of the plaintiff, a woman seventy-two years old, and had the confidence of the plaintiff and her family, consisting of her husband and adult son. The plaintiff lived on a farm on the post road in North Kingstown, where she conducted a small business in homemade pies. Mary Kelly and the defendant had adjoining summer places at Quonset Point, the road to which led by the plaintiff's home. The plaintiff became acquainted with the defendant and his business through Mary Kelly and by his stopping at her home for pies. During this period Mary Kelly kept advising the plaintiff to invest her savings and, acting upon such advice, the plaintiff turned over to her various sums of money at different times, amounting in all to $1,800, which money was to be invested with the defendant in second mortgages. This sum and the $5,000 to which we are about to refer make up the $6,800 in dispute in this case.

It appears in evidence that on Saturday, May 9, 1931, the plaintiff sold her farm and pie business for $5,000, and that on that same day she deposited this entire sum in her name in the Union Trust Company of Providence. According to the plaintiff's testimony, which is substantially corroborated by her husband and son, Mary Kelly came to her house the next day and stayed overnight. While there, Mary Kelly urged and finally persuaded the plaintiff to let her have the money that the plaintiff had received from the sale of the farm so that she, Mary Kelly, could give it to the defendant for second mortgages. The plaintiff's testimony on this point is as follows: "Well, she was to get me second mortgages from Mr. Lynch. * * * Yes, as I understood it, they were both equally liable to me for that money that I turned over. * * * "

The following morning, Monday, May 11, Mary Kelly took the plaintiff in her automobile to the Union Trust Company in Providence, and the plaintiff then withdrew the $5,000 that she had deposited in that bank the preceding Saturday, such withdrawal being in the form of a treasurer's check for that amount payable to the plaintiff. This bank check, to which we will again refer, was indorsed by the plaintiff and given by her to Mary Kelly, who then left the plaintiff in somewhat of a hurry, saying that she was going directly to the defendant's office in Pawtucket.

An official of the Industrial Trust Company, Pawtucket Branch, testified that on May 12, the defendant deposited $5,015.13 to his account in that bank, and that the treasurer's check of the Union Trust Company for $5,000, dated May 11 and payable to the plaintiff was one of the items in that deposit. This check, when paid through clearing on May 13, bore the following indorsements: "Margaret A. McFarland, William J. Lynch, Industrial Trust Company May 12, 1931 —Pawtucket Branch," and "Industrial Trust Company, Providence."

Later in the month of May the plaintiff received, in a manner not disclosed in evidence, three mortgage notes and their respective mortgages in the aggregate sum of $6,800, the same total amount that the plaintiff testified she gave to Mary Kelly to invest with the defendant in second mortgages. These three notes and mortgages, all drawn to the defendant as mortgagee and transferred by him to the plaintiff, are identified in the evidence as the Blais mortgage, for $2,000, payable eight years from its date, January 20, 1930; the Crowe mortgage, for $2,100, dated April 16, 1931, and payable in monthly installments of $15 a month; and the Menatian mortgage, for $2,700, dated December 26, 1930, and payable in monthly installments of $20 a month. The plaintiff, her husband, and her son all testified that they examined the notes of these mortgages when they were first received by the plaintiff, and that at that time there was no writing of any kind after the...