Waltham Trust Co. v. Cincotta

• Decision Date: 28 January 1936
• Parties: WALTHAM TRUST COMPANY v. ANTONIO CINCOTTA.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

293 Mass. 272

WALTHAM TRUST COMPANY v. ANTONIO CINCOTTA.

Supreme Judicial Court of Massachusetts, Middlesex.

January 28, 1936

November 13, 25 1935.

Present: RUGG, C.

J., CROSBY, PIERCE DONAHUE, & QUA, JJ.

Bills and Notes Accommodation paper. Evidence, Relevancy.

In an action by a bank as payee and holder of a promissory note against an accommodation indorser whose signature was obtained by the maker, the defendant could not show that the bank was the party accommodated by evidence that officers of the bank procured the making of the note to prevent a threatened sale of stock of the bank deposited elsewhere by the maker as collateral for a loan which was paid with the proceeds of the note; and evidence that at that time the placing of the bank's stock on the market would have been harmful to it was irrelevant.

CONTRACT. Writ in the Second District Court of Eastern Middlesex dated January 2, 1935.

Upon removal to the Superior Court, the action was tried before Walsh, J., who ordered a verdict for the plaintiff in the sum of $1,592.43 and reported the action.

W. J. Bannan, (R.

W. McEnaney with him,) for the defendant.

F. L. Simpson, H.

P. Moltedo, & R.

J. Curran, for the plaintiff, submitted a brief.

PIERCE, J. This is an action of contract against an indorser of a promissory note, brought by the commissioner of banks on behalf of the Waltham Trust Company. The case was tried to a jury. At the conclusion of the evidence the plaintiff moved for a directed verdict. The motion was allowed and the defendant duly excepted. Thereupon the judge at the request of the defendant reported the case, with all the material evidence, for the determination of this court.

Such evidence discloses that the note in suit was dated February 15, 1932 was signed by Domenic Conte, indorsed by the defendant and one Raymond Dalla Porta, and payable to the Waltham Trust Company or its order. The defendant's brief states that "There is no dispute over the signatures, it being admitted that both the maker and the indorsers signed the note before delivery"; and that "Nothing has ever been paid upon the note, and if the defendant is liable, the amount due at the date of the trial, May 28, 1935, plus interest and an attorney's fee of $175 was $1,592.43." The defendant contended "there was no consideration . . . [for the note] in that he signed it solely for the benefit of the plaintiff."

The law applicable to the issue presented is stated in G.L. (Ter. Ed.) c. 107, Section 52, which reads: "An accommodation party is one who has signed the instrument as maker, drawer, acceptor or endorser, without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder in due course, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party"; and Section 82, which reads: "Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective the burden is on the holder to prove that he or some person under whom he claims acquired the title as holder in due course. But the last mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title."

The reported evidence shows, in substance, the following facts: Domenic Conte was for many years an employee of the plaintiff in the capacity of manager of its foreign department. On February 15, 1932, and for a long time previously, he owed money to the Boston Five Cents Savings Bank, as security for which he had deposited one hundred twenty shares of stock of the plaintiff. In February, 1932, he had been requested to make payment on the note. The demand was made through a letter from the Boston Five Cents Savings Bank to Warren P. Elliott, treasurer of the plaintiff bank. The report warrants, if it does not require, the inference that there were ten or twelve other loans in the Boston Five Cents Savings Bank of stockholders of the Waltham Trust Company, with deposits of that company's stock as collateral security. Conte testified, in substance, that the conversation with Elliott was that the Boston Five Cents Savings Bank was asking for more money on the Waltham Trust Company stock that Conte had there; that he replied: "I cannot pay anything, you know my condition. I owe $800 here at the bank and I cannot pay a cent"; that Elliott said, "we got to do something, otherwise they going to make trouble for the other people, they got the loan on the same stock in the bank"; that Conte said, "I cannot get any indorser, I cannot give any more money because I haven't got it. Let go the stock"; that Elliott said, "We cannot afford to do that because they [are] going to find no market and we [will] get in trouble"; that Conte replied, "Let go the stock, I cannot pay, I haven't got it."

Conte further testified that on the day after the conversation with Elliott the president of the plaintiff bank, one Eldridge, said to him: "Domenic, you must do something for that stock"; that Eldridge referred to a talk with Elliott and said to Conte: "I [shall] arrange for you to get an industrial loan and get a couple of indorsers," to which he replied: "Mr. Eldridge, I cannot get a couple of indorsers." Eldridge then said: "I tell you what to do. You go see Father Dalla Porta and Tony Cincotta and have them indorse the note, we put it through." Conte replied: "Father ...