Pearson v. O'Connell
| Decision Date | 11 September 1935 |
| Citation | 197 N.E. 486,291 Mass. 527 |
| Parties | PEARSON v. O'CONNELL. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Exceptions from Superior Court, Suffolk County; Donnelly Judge.
Action of contract by Herbert Pearson, receiver, against Joseph F O'Connell. On exceptions saved by plaintiff at the hearing of the action in the superior court by the judge without a jury, where there was a finding for defendant.
Exceptions sustained.
Action of trial judge trying note action without a jury in granting, as a ruling of law, request of defendant for ruling that upon all the evidence plaintiff was not entitled to recover, held reversible error, where evidence was such that judge would not have been bound to believe evidence for defendant even if uncontradicted.
J. C. Coughlin and Haven Parker, both of Boston, for plaintiff.
A. C. Kellogg, of Boston, for defendant.
The defendant, on June 1, 1921, gave to Metropolitan Trust Company the note upon which this action is brought. It was for $5,780, payable on demand, and was secured by a pledge of twenty-five shares of the preferred stock and five shares of the common stock of Industrial Finance Company, and bonds of Virginia Food Products Company of the face value of $5,000. The loan for which the note was given was not a new one, and the payee soon demanded payment.
The defendant's evidence tended to prove the following facts. When payment was demanded, the defendant proposed to sell the pledged securities to obtain the needed money. The payee did not wish him to sell the stock, because that might affect the control of the corporation, in which the officers of the payee were interested. An investment banking corporation named Hodgdon, Cashman Company, which was ‘ the market’ for the bonds, did not wish him to hurt the market by selling the bonds. The result was, that Hodgdon, Cashman Company gave the payee its note, secured by the same collateral, in substitution for the defendant's note. The payee did not perform its promise, made by one Stickney as its treasurer, to return to the defendant his note. The defendant's note was negotiated by the payee to Federal Trust Company in September, 1922, when that company ‘ took over’ the payee. The Federal Trust Company later became Federal National Bank of Boston, of which the plaintiff is receiver, and sometime afterwards this action was brought. The defendant relied on the transaction just described as an extinguishment of the note by novation. Hedge v. McQuaid, 11 Cush. 352; Woods v. Woods, 127 Mass. 141; Stoughton Trust Co. v. Pike, 282 Mass. 39, 184 N.E. 385; G. L. (Ter. Ed.) c. 107, § 142(4). Jones v. Wettlin, 39 Wyo. 331, 271 P. 217, 69 A.L.R. 840; Bank of the United States v. Manheim, 264 N.Y. 45, 189 N.E. 776. There was a finding for the defendant.
Grave doubt exists as to the sufficiency of the evidence of Stickney's authority to bind the payee by the transaction described. But we think it better simply to sustain one exception which appears to be well taken, and to grant a new trial,...
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