Nesson v. Millen

Massachusetts Supreme Judicial Court

Nesson v. Millen

91 N.E. 995, 205 Mass. 515, 1910 Mass. LEXIS 1052

CourtMassachusetts Supreme Judicial Court

DecidedMay 17, 1910

StatusPublished

Cited by8 cases

This text of 91 N.E. 995 (Nesson v. Millen) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Nesson v. Millen, 91 N.E. 995, 205 Mass. 515, 1910 Mass. LEXIS 1052 (Mass. 1910).

Pincite

Opinion

Morton, J.

Each of these two actions is upon a mortgage note payable to the plaintiff or order and indorsed by the defendant before delivery. The actions are against the defendant as indorser, and were tried together. The defendant offered to prove that he had entered into a written agreement with the plaintiff for the purchase of the property covered by the mortgages, and that the plaintiff was to convey it to him subject to a mortgage of $10,000; that the plaintiff was unable to carry out this agreement by reason of the fact that there was a bank mortgage of $5,000 which he was unable to get discharged; and that he thereupon proposed to the defendant that he (the defendant) should take a deed through a conduit, free and clear -of all incumbrances, and cause mortgages on the lands conveyed and mortgage notes indorsed by the defendant to be given to the plaintiff by the conduit, so as to enable the plaintiff to raise money, the plaintiff undertaking to discharge the bank mortgage as soon as he could and not to look to the defendant for payment by reason of his indorsements on the mortgage notes, and Representing to the defendant that the indorsements upon the mortgage notes would be for the plaintiff’s accommodation. The defendant further offered to show that the transaction was carried out as thus proposed, and that the mortgage notes in suit were given by a conduit and indorsed by the defendant pursuant to the arrangement thus entered into.

The presiding judge excluded the evidence thus offered and directed the jury to return verdicts for the plaintiff. The defendant excepted. We think that the evidence should have been admitted.

It is manifest that if the written agreement had been carried out the defendant would have been under no personal liability on account of the mortgage subject to which the premises were [518]*518to be conveyed to him. He would have been the owner of the equity of redemption, and if the conditions of the mortgage were broken the mortgagee could have foreclosed the mortgage just as he did in the case of the mortgages given to secure the notes in suit. But the defendant would not have been personally liable, as it is contended that he now is, for the difference between the amount realized from the foreclosure sale and the sum which the mortgage was given to secure. And- the question is, therefore, whether the evidence that was offered and excluded would have tended to show that there was no consideration for the defendant’s indorsements. If it would, then it should have been admitted ; otherwise not. We assume in the plaintiff’s favor, though it nowhere distinctly appears, that the bank mortgage was discharged by him. But it does not appear that under the modified agreement the defendant received any greater interest in the property conveyed than he would have received under the written agreement, or that the indorsements were made by the defendant as part of the consideration of the purchase. Neither does it appear that the plaintiff suffered any detriment. He was already bound to convey the property to the defendant, and he represented that the indorsements would be for his accommodation and benefit, making no assertion, according to the defendant’s offer of evidence, that the indorsements were a part of the consideration for the purchase. We do not see, therefore, how it can be said that there was any consideration for the defendant’s indorsements. The fact that the defendant subsequently paid interest on the notes when not obliged to does not estop or prevent him from setting up the want of consideration in an action against him in which the plaintiff seeks to recover on the indorsements. It is settled that as between the payee and an indorser in blank before delivery the latter may show that there was no consideration for his indorsement, and that, so far as the payee and himself are concerned, the note was an accommodation note. Corlies v. Howe, 11 Gray, 125. Case v. Spaulding, 24 Conn. 578. Hamburger v. Miller, 48 Md. 317. Chaddock v. Vanness, 6 Vroom, 517.

We think that the rule thus established applies to the cases before us.

Exceptions sustained.

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Morton, J.

Each of these two actions is upon a mortgage note payable to the plaintiff or order and indorsed by the defendant before delivery. The actions are against the defendant as indorser, and were tried together. The defendant offered to prove that he had entered into a written agreement with the plaintiff for the purchase of the property covered by the mortgages, and that the plaintiff was to convey it to him subject to a mortgage of $10,000; that the plaintiff was unable to carry out this agreement by reason of the fact that there was a bank mortgage of $5,000 which he was unable to get discharged; and that he thereupon proposed to the defendant that he (the defendant) should take a deed through a conduit, free and clear -of all incumbrances, and cause mortgages on the lands conveyed and mortgage notes indorsed by the defendant to be given to the plaintiff by the conduit, so as to enable the plaintiff to raise money, the plaintiff undertaking to discharge the bank mortgage as soon as he could and not to look to the defendant for payment by reason of his indorsements on the mortgage notes, and Representing to the defendant that the indorsements upon the mortgage notes would be for the plaintiff’s accommodation. The defendant further offered to show that the transaction was carried out as thus proposed, and that the mortgage notes in suit were given by a conduit and indorsed by the defendant pursuant to the arrangement thus entered into.

The presiding judge excluded the evidence thus offered and directed the jury to return verdicts for the plaintiff. The defendant excepted. We think that the evidence should have been admitted.

It is manifest that if the written agreement had been carried out the defendant would have been under no personal liability on account of the mortgage subject to which the premises were [518]*518to be conveyed to him. He would have been the owner of the equity of redemption, and if the conditions of the mortgage were broken the mortgagee could have foreclosed the mortgage just as he did in the case of the mortgages given to secure the notes in suit. But the defendant would not have been personally liable, as it is contended that he now is, for the difference between the amount realized from the foreclosure sale and the sum which the mortgage was given to secure. And- the question is, therefore, whether the evidence that was offered and excluded would have tended to show that there was no consideration for the defendant’s indorsements. If it would, then it should have been admitted ; otherwise not. We assume in the plaintiff’s favor, though it nowhere distinctly appears, that the bank mortgage was discharged by him. But it does not appear that under the modified agreement the defendant received any greater interest in the property conveyed than he would have received under the written agreement, or that the indorsements were made by the defendant as part of the consideration of the purchase. Neither does it appear that the plaintiff suffered any detriment. He was already bound to convey the property to the defendant, and he represented that the indorsements would be for his accommodation and benefit, making no assertion, according to the defendant’s offer of evidence, that the indorsements were a part of the consideration for the purchase. We do not see, therefore, how it can be said that there was any consideration for the defendant’s indorsements. The fact that the defendant subsequently paid interest on the notes when not obliged to does not estop or prevent him from setting up the want of consideration in an action against him in which the plaintiff seeks to recover on the indorsements. It is settled that as between the payee and an indorser in blank before delivery the latter may show that there was no consideration for his indorsement, and that, so far as the payee and himself are concerned, the note was an accommodation note. Corlies v. Howe, 11 Gray, 125. Case v. Spaulding, 24 Conn. 578. Hamburger v. Miller, 48 Md. 317. Chaddock v. Vanness, 6 Vroom, 517.

We think that the rule thus established applies to the cases before us.

Exceptions sustained.

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Bluebook (online)

91 N.E. 995, 205 Mass. 515, 1910 Mass. LEXIS 1052, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nesson-v-millen-mass-1910.

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