Timson v. Parrott , 231 Mass. 567 ( 1919 )

Pieece, J.

The evidence taken in its aspect riiost favorable to. the contention of the plaintiff would warrant the jury in finding that on October 21, 1910, the plaintiff lent the defendant, personally, $150 to enable the defendant to meet the payroll of the Hub Curtain Company; that a few days before the note became due the defendant asked and received an extension “because he hadn’t sufficient funds to meet it;” that later the defendant' telephoned the plaintiff that the Hub Curtain Company had assigned, and asked the plaintiff “to give up his personal note and accept the note of the Hub Curtain Company” in payment; that the Hub Curtain Company was “contemplating going into bankruptcy proceedings” and that the common law assignee of the Hub Curtain Company would make arrangements with the plaintiff to that effect; that the assignee, appbinted in January, 1911, agreed with the plaintiff that the personal note of the defendant should be surrendered and a substituted note “drawn on the Hub Curtain Company” should be delivered to the plaintiff together with a written agreement signed by the defendant to pay the plaintiff any balance unpaid on the substituted note after “a dividend” was received; that afterwards the assignee gave and the plaintiff received the note of the Hub Curtain Company as a substitute for and in settlement of a note previously held by the plaintiff; that at the time the note of the Hub Curtain Company was substituted for the personal note of the defendant, and the last named note surrendered, as a part of his agreement the assignee gave the plaintiff a written agreement, signed by the defendant, the substance of which was that the defendant was indebted to the plaintiff in the sum of $150; that the plaintiff should give up the personal note and accept the Hub Curtain Company’s note, and that “as soon as a dividend was paid” to him the defendant would pay the plaintiff the difference between the dividend and the amount the defendant owed; that the Hub Curtain Company filed a petition and was adjudicated a bankrupt on February 6, 1911; that the petition scheduled the plaintiff as a creditor holding the bankrupt’s note for $150; that on February 24, 1911, the plaintiff executed a proof of claim, which was filed and allowed; that a dividend of ten per cent was declared and paid on April 11, 1911; that no other dividend has been declared; that the defendant has not paid the balance of $135, and that the absence of evidence of other proceedings in the bankruptcy court warrants a finding that the proceedings in that court were closed at the time this action was brought.

Upon the above alleged facts, many of which are disputed by the defendant, the judge rightly could not have directed a verdict for the defendant. The surrender of the individual note of the defendant for the note of the bankrupt Hub Curtain Company was in itself a consideration for the written promise of the defendant to pay the plaintiff the difference between a declared dividend and the amount owed the plaintiff, $135, “as soon as a dividend was paid” the plaintiff. There is no evidence in the record that the note of the Hub Curtain Company was given the plaintiff without the authority of the company. Indeed, the contrary may be inferred readily from the undisputed fact that the money obtained from the plaintiff was procured and used for the direct benefit of the company. Manifestly the fund available to the general creditors of the company could not be affected by the substitution of the plaintiff as a creditor in place of the defendant, if the amount owed the defendant was equal to or more than the obligation in its substituted form.

The action was not prematurely brought, in that it could rightly be found that the proceedings in bankruptcy had been closed before the action was brought; as also that the written agreement is to pay as soon as “a dividend” is paid and not when all proceedings have closed.

The remaining requests were refused rightly and are covered by what has been said concerning the motion to direct a verdict.

Exceptions overruled.