Tremont Trust Co. v. Brand

• Decision Date: 16 March 1923
• Parties: TREMONT TRUST CO. v. BRAND et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

244 Mass. 421

138 N.E. 564

TREMONT TRUST CO.

v.BRAND et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 16, 1923.

Appeal from Superior Court, Suffolk County; Hammond, Judge.

Bill in equity by the Tremont Trust Company against David H. Brand and others. Decree for plaintiff, and the named defendant appeals. Affirmed.

The bill alleged the making of a note by the defendant Brand and its nonpayment, that Brand was a stockholder in certain of the other defendants, and that he had no assets, other than such shares of stock, and was intending to assign, transfer, or otherwise dispose of them. It prayed that the debt be established, and that Brand be ordered to bring the shares of stock into court and transfer them to plaintiff, in order that plaintiff might apply them to the payment of the debt. Brand demurred on the grounds (1) that it was not alleged that plaintiff had not a plain, adequate, and complete remedy at law, and no facts were alleged sufficient to give the court jurisdiction in equity; (2) that the instrument set forth was not a negotiable instrument; (3) that no consideration was alleged; (4) that no facts were alleged from which it appeared that plaintiff was entitled by the terms of such alleged promissory note to demand payment of the sum alleged or any part of it. The demurrer was overruled, and defendant appealed from the order overruling it. Answer was filed by Brand, putting material allegations in issue, and alleging that when the instrument sued on was signed and delivered he was not indebted to plaintiff, that no consideration was given or promised, that he received no consideration for the payments made on the note, and that the instrument was founded on an illegal consideration and was invalid. The court found that the note was given for a valid consideration and rendered a decree adjudging that defendant Brand owed plaintiff $3,193.40, with interest, and that, if such sum, with interest and costs, was not paid. Brand's interest in the shares of stock in the other defendants should be sold and the proceeds applied to the payment of the sum ordered paid.

William H. Garland, of Boston, for appellant.

Daniel L. Smith, of Boston, for appellee.

PIERCE, J.

This is a bill in equity under G. L. c. 214, § 3 (8), to reach and apply in payment of a debt, which the bill alleges the defendants owe the plaintiff, certain shares of stock in a corporation organized under the laws of this commonwealth. The defendant Brand is the maker, and the plaintiff the payee, named in a promissory note which reads:

‘Boston, Mass., Jan. 9, 1919.

‘One year after date, for value received, the undersigned hereby promise to pay to the Tremont Trust Company, or order, at the office of the company, 15 State street, Boston, thirty-three hundred three and 40/100 dollars, payable with int. at 6 per cent. in weekly installments of $10 each. First payment falling due January 16, 1919. Failure to pay any of said installments at maturity making the whole due and payable forthwith. David H. Brand.

‘Address, 245 Humboldt Ave., Roxbury, Mass.’

The defendants demurred to the amended bill, the demurrer was overruled, and the defendants duly appealed.

The demurrer rightly was overruled. G. L. c. 214, § 3(8), in terms authorizes a suit in equity to reach and apply shares in a corporation, whether the suit is founded on a debt or not. The words ‘value received’ imported a consideration, and the note when produced is prima facie evidence of a consideration; the burden, on all the evidence, being upon the plaintiff to satisfy the court or jury by the preponderance of the evidence that there was a consideration. Black River Savings Bank v. Edwards, 10 Gray, 387, 391, 394;Courtney v. Doyle, 10 Allen, 122.

The defendant Brand in his answer admitted his signature to the instrument declared on, admitted payments to the amount credited, denied consideration was given or promised, and further answered ‘that the instrument sued upon by the plaintiff is founded upon an illegal consideration and is invalid,’ in that ‘on or about January 9, 1919, one Simon Swig, then vice president and an officer of the plaintiff company, promised the defendant that, if he would sign and deliver to the plaintiff the instrument set forth in the first paragraph of the plaintiff's bill, he, said Swig, would procure the dismissal by the United States attorney at Boston of a certain indictment in a criminal proceeding then pending in the United States District Court at said Boston against this defendant; that said indictment charged this defendant with an offense in violation of the criminal provision of the Bankruptcy Act (U. S. Comp. St. §§ 9585-9656), which alleged offense was a felony under the laws of the United States; that, relying upon said Swig's said...