Gibbs Oil Co. v. Collentro & Collentro, Inc.

41 Mass. App. Dec. 84

• Court: Massachusetts District Court, Appellate Division
• Decided: October 3, 1968
• Docket: No. 191300
• Status: Published

Opinions

Lewiton, J.

The matter here under review is a claim asserted by the plaintiff, Gibbs Oil Company (“Gibbs”), against one of the dedendants, Irving Atkin (“Atkin”) based upon the latter’s endorsement of a promissory note payable to the plaintiff. It appears from the report by the trial judge that the plaintiff had furnished fuel oil to the corporate defendant, Collentro & Collentro, Inc. (“Collentro”). On June 1, 1967, Collentro executed and delivered to the plaintiff, in payment of fuel oil sold and delivered to Collentro, a promissory note to the order of Gibbs for $2,600, due and payable in 60 days. The note, on which this action is brought, was endorsed by Atkin as follows: “Waiving presentment and notice and any and all surety defenses. This is a sealed instrument. ’ ’

At the trial, Atkin testified that he had endorsed the note at the request of one Archie Gould, General Manager of Gibbs, so that the note could be discounted with a bank. The report does not indicate that there was any evidence to the contrary.

At the conclusion of the case, the trial judge denied the following request for ruling submitted by the plaintiff:

“No consideration is necessary for an instrument or obligation thereon given in payment of or as security for an antecedent obligation of any kind. G.L. c. 106, § 3-408.”

The court then found for the defendant after making the following specific findings of fact:

“I find as a fact that: The defendant Atkins [sic] was an accommodation endorser and was accommodating the plaintiff at the plaintiff’s request in order for plaintiff to discount the note. There was no consideration to Atkins [sic] for such accommodation and he is not liable to the plaintiff who was not a holder in due course.”

The case is here on the plaintiff’s claim that it was aggrieved by the denial of the requested ruling quoted above. There was no reversible error.

There is no occasion for us to consider whether, as an abstract matter, the ruling requested by the plaintiff was a correct statement of law. Even if the requested ruling had been granted, the finding as to the accommodation endorsement would preclude recovery by Gribbs.

The testimony of Atkin clearly warranted the finding by the trial judge that Atkin “was accommodating the plaintiff at the plaintiff’s request in order for plaintiff to discount the note.” This finding of fact, supported by the evidence, cannot now be challenged. Kelsey v. Hampton Court Hotel Co., 327 Mass. 150, 152. James B. Rendle Co. v. Conley & Daggett, Inc., 313 Mass. 712. Casey v. Gallagher, 327 Mass. 746, 748-9, 750.

The Uniform Commercial Code, (Mass. G.L. c. 106) in § 3-415 (1) defines an accommodating party as “one who signs the instrument in any capacity for the purpose of lending his name to another party to it.” Sub-section 5 of the same section goes on to provide that “An accommodation party is not liable to the party accommodated____” Granted the finding that Atkin was an accommodation endorser, and that he endorsed the note to the plaintiff at the latter’s request, it necessarily follows that he is not liable to the plaintiff on his endorsement. Great Barrington Savings Bank v. Day, 288 Mass. 181, 184. Connors Bros. Co. v. Sullivan, 220 Mass. 600, 605. Goodman v. Gaull, 244 Mass. 528, 530. See Beacon Trust Co. v. Barry, 260 Mass, 449, 451.

The plaintiff has strenuously argued that the case of Rose v. Homsey, 347 Mass 259, requires an opposite result. It relies on the statement in that case to the effect that “an accommodation party is always a surety” under the Uniform Commercial Code. From this, Gibbs argues that since the maker, Collentro, did not make payment on its note, Atkin is in the position of a surety, and is liable to Gibbs. In our opinion, this argument misses the meaning of the Rose case. There, the Supreme Judicial Court was discussing the relationship of an accommodation maker to a third party and whether the accommodation maker was primarily liable to the third party or was liable as a surety. No question of the rights of an accommodated party as against its accommodating endorser was there involved. ISTor do we believe that it could have been the intent of the drafters of the Uniform Commercial Code, or of the legislature in enacting the Code, to reverse the existing rule of non-liability of an accommodating party to the party being accommodated. Report dismissed.