Usher v. Raymond Skate Co. , 163 Mass. 1 ( 1895 )

Holmes, J.

The plaintiffs took the note in suit with knowledge that the defendant’s treasurer indorsed it for the accommodation of the maker, at least unless the statement alleged to have been made to them that the defendant held a mortgage from the maker to secure it was true. Unless that statement was true, therefore, they had notice that in the absence of actual authority the defendant’s treasurer had no right to indorse the note. See Monument National Bank v. Globe Works, 101 Mass. 57; National Bank of Commonwealth v. Law, 127 Mass. 72, 75; Davis v. Old Colony Railroad, 131 Mass. 258; Bank of Genesee v. Patchin Bank, 3 Kernan, 309, 314; Ex parte Estabrook, 2 Lowell, 547, 548. The plaintiffs can stand no better than they would have stood had the mortgage been exhibited to them. The husband of the maker was not an agent of the defendant, and his representation did not affect the defendant’s liability except so far as it was true. The fact of the mortgage coupled with the plaintiffs’ knowledge of it, however obtained, was the only thing which concerned the defendant. • If the mortgage had been exhibited to the plaintiffs, they would have seen that it ran only for transactions within a year from its date, and that that time had expired. It is true that a question might be made whether the words “ within one year from this date ” in the mortgage should be confined to the words “ goods purchased by me of it,” immediately preceding, but the good sense of the thing shows that the limitation should be read as general, and as applying to all the transactions mentioned. There is no sufficient reason for leaving the mortgage indefinite in time as to indorsements, while it is limited to a year in respect of purchases. The plaintiffs are not in the position of having read the instrument, and of having acted bona fide upon the other interpretation. Crossan v. New York & New England Railroad, 149 Mass. 196, 198, 199. They, took their chances on the statement of a stranger.

It follows that the plaintiffs are not helped by the statement alleged to have been made to them. Assuming the corporation to have accepted the mortgage, such a transaction for a time that had passed was no evidence of subsequent authority on the part of its treasurer to indorse accommodation paper for the indorsement of which the corporation was not secured, and it is not necessary to consider whether it would have been sufficient for a note indorsed within the time, or whether such an indorsement would have been within the powers of a corporation organized for the purpose of manufacturing and selling roller skates and other articles. Judgment for the defendant.