Cheney v. Taber

108 N.E. 1072, 221 Mass. 332, 1915 Mass. LEXIS 838

• Court: Massachusetts Supreme Judicial Court
• Decided: May 22, 1915
• Status: Published

Opinion

Braley, J.

The defendants admit that they either knew of the contents or had read the plaintiff’s letter under which Cox had been authorized to act as his agent, and no general or discretionary powers having been given they never became holders in due course, unless the plaintiff’s promissory notes, entrusted to him, were delivered in accordance with the instructions. R. L. c. 73/ § 69. Fillebrown v. Hayward, 190 Mass. 472. Allen v. Puritan Trust Co. 211 Mass. 409, 422. Record v. Littlefield, 218 Mass. 483.

It appears that Taber and Wineke, to whom we shall refer as the defendants, were the owners of a majority of the common stock of the Mt. Vernon Distilling Company, as well as of certificates representing a large number of barrels of its whiskey held in bond, and Cox, .who was seeking to acquire, this property, solicited one Carlisle to interview the plaintiff and procure the notes in aid of the purchase upon the understanding that the plaintiff should participate in the expected profits.

The negotiations which followed resulted in an option of purchase under which the defendants were to receive the selling price in cash, but they finally agreed with Cox to accept the notes in part payment. While the notes were handed over and immediately divided between the defendants, the remainder of the consideration was never paid, as the draft therefor subsequently given by Cox to Taber was dishonored, and neither the stock nor the certificates have been transferred.

It is manifest that, the payment of the balance having been a condition for the transfer of title, the transaction never has been consummated. Scudder v. Bradbury, 106 Mass. 422, 427. Haskins v. Warren, 115 Mass. 514, 533.

The defendants in their answers disclaim any purpose to take advantage of the expiration of the option and assert that a binding contract having been made, which has been broken by the purchaser, the notes are enforceable.

We are now prepared to consider the application of the letter to these transactions, concerning which the plaintiff is not shown to have had any knowledge until informed of the fruitless result, and that the notes though he demanded their return were in the possession or control of the defendants, who claimed them as part of the consideration for the sale.

Their .number and tenor having been fully described, authority to use them is found in the words, “I understand that these notes are to be substituted for part of the cash consideration paid to the vendors, thereby realizing $50,000 against the same, and that, of course, in the event of the deal not being completed the notes will be returned on demand.” To the request which followed, "At your convenience I would be glad to have a letter showing the transaction in detail and how and where the notes are being used,” no reply was ever vouchsafed by either Cox or the defendants or any information whatever furnished.

If the defendants’ construction of the letter is adopted, that Cox was empowered to substitute the notes at their face value “for part of the cash consideration,” it cannot be contended successfully that the plaintiff also intended to part with his money unless the vendors passed the title.

Nor have the defendants pointed out from what source “his share of the profits” could come, if they are entitled to retain the stock and the bonded whiskey and collect the notes. The plaintiff, when he said, “in the event of the deal not being completed,” did not mean the entering into by the parties of an executory contract, but of a sale by which title to the property would be acquired. It is certain that he did not intend to invest unless the balance of the consideration was obtained and concurrently paid over. If this was done, then and not until then could the notes be used and treated as partial payment.

The defendant Bagley is the broker employed by Taber and Wineke to whom, when the notes were divided, they each delivered one note for $10,000 in payment for services; and his testimony shows that having sold one he retained the other note.

The defendant Taber also testified that shortly after obtaining it he disposed of the note for $15,000, while Wineke, who has not appealed, holds the remaining note for a like amount.

But the credibility of the witnesses was for the presiding judge. Taber v. Breck, 192 Mass. 355. And there is no positive evidence that any of these notes had passed irrevocably beyond the control of the respective appellants. If their defence is not sustained, they moreover have not questioned the form of the decree which ordered the defendants to return the notes to the plaintiff within a specified time. Fuller v. Percival, 126 Mass. 381, 382, 383. It is therefore affirmed with costs.

Ordered accordingly.