Stone v. Sargent

• Decision Date: 03 March 1915
• Citation: 220 Mass. 445,107 N.E. 1014
• Parties: STONE v. SARGENT et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

220 Mass. 445

107 N.E. 1014

STONE v. SARGENT et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 3, 1915

COUNSEL

Mayberry Hallowell & Hammond, of Boston, for appellant.

Henry T. Richardson, of Boston, for appellee.

OPINION

BRALEY J.

The plaintiff's promissory note having been materially altered without his knowledge or assent by Williams, who among other changes erased the name of the payee leaving the space in blank, and raised the amount of the principal fivefold, it is unenforceable according to its original tenor unless the defendant Sargent to whom after alteration it was transferred is a holder in due course. R. L. c. 73, § 141. But as the presiding judge has found that when delivered to her agents it was an incomplete instrument he is entitled to a return and cancellation of the note. R. L. c. 73, § 31; Andrews v. Sibley, 220 Mass. 10, 107 N.E. 395; Tower v. Stanley, 107 N.E. 1010. The plaintiff when he gave the note also executed an assignment with the blank for the name of the assignee unfilled of his policy of life insurance as collateral security, which was delivered by Williams to the defendant with the note in question. It is contended that the plaintiff is estopped from recovering the policy unless the first pays the entire amount for which the defendant took it as security. But the assignment was not an unqualified transfer. The words 'in case of death all balance over notes to be paid to my estate' appearing on the face are sufficient with the other evidence to warrant the judge's finding that it was pledged for the payment of the note in its original form held by the defendant, as well as for another note of the plaintiff's retained by Williams, but declared void by the decree because fraudulently altered from which the defendants, his executors, have not appealed. The policy is not a negotiable instrument, and if the assignment is considered apart from the notes the words quoted clearly indicated that Williams was not clothed with the absolute title, and the defendant was put upon inquiry as to the source and extent of his ownership. Tuttle v. First Nat. Bank of Greenfield, 187 Mass. 533, 73 N.E. 560, 105 Am. St. Rep. 420; Allen v. Puritan Trust Co., 211 Mass. 409, 420, 97 N.E. 916; 2 Pom. Eq. Jur. (3d Ed.) §§ 710, 711. It never was an independent right to property capable of being transferred separately from the notes, so that one person could hold the principal obligation, and another person would hold the policy. Whitaker v. Summer, 20 Pick. 399; ...