Auburn State Bank vs. National Laundry Co.

Massachusetts Supreme Judicial Court1935-02-05

289 Mass. 397

Summary · law.co

Holding. The trial court properly directed a verdict for the plaintiff because the defendant's failure to file a specific statutory denial of the signature's genuineness—rather than a mere general denial—resulted in the admission of the signature, and the plaintiff, as an agreed holder in due course, was entitled to judgment. Exceptions overruled.

Auburn State Bank sued National Laundry Co. on a promissory note dated March 1, 1932, for $1,400, payable three months later. The defendant denied signing the note and denied that anyone had authority to execute it on its behalf. It also contested that the plaintiff was a holder in due course. The trial judge directed a verdict in favor of the bank, and the defendant appealed.

The court upheld the directed verdict. Although the defendant filed general denials of the signature and authority, it failed to comply with the statutory requirement for a specific denial of the signature's genuineness coupled with a demand for proof at trial. Under the applicable statute, such a specific denial was necessary to put the signature's validity in issue. Because the defendant did not properly challenge the signature, it was treated as admitted. The parties also agreed that the plaintiff was a holder in due course, which entitled it to payment on the admitted note.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a general denial of signature and authority satisfies statutory requirements for challenging a negotiable instrument's genuineness
Effect of failure to file a specific denial of signature on the admissibility of the instrument's validity
Rights of a holder in due course to recover on a promissory note

Procedural posture

The defendant appealed the trial court's direction of verdict for the plaintiff in an action on a promissory note.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Field, J.

This is an action on a promissory note. The writ is dated June 3, 1932. The plaintiff declared on a promissory note, a copy of which is annexed to the declaration. It reads as follows: “$1400.00 Boston, Mass., March 1, 1932. Three months after date we promise to pay to the order of The Auburn Fdry. (Stoker Division) Fourteen Hundred 00/100 Dollars. Payable at The Atlantic National Bank of Boston. Value received Six per cent interest. No.........Due June 1, 1932. National Laundry Co., Harry Rosenfield, Pres.” The declaration further alleges that before maturity thereof said note was negotiated by the payee thereof to the plaintiff for value.” The. defendant answered general denial and payment and answered further that it denies the signature to the note declared upon by the plaintiff . . . that it denies the authority of anyone to execute on the part of it the instrument declared upon by the plaintiff . . . [and] that the plaintiff is not an innocent purchaser in due course of said note.” A verdict for the plaintiff was directed. The defendant excepted to the direction of the verdict, the exclusion of evidence and the refusal to rule as requested by the defendant, but argues only its exception to the direction of the verdict.

There was no error in directing a verdict for the plaintiff.

The bill of exceptions, while not stating in terms that the note was introduced in evidence, clearly implies that it was so introduced. And the parties agreed "that the plaintiff was a holder in due course of the note in suit.”

It must be taken that the judge directed the verdict with the pleadings before him and in view of their averments. Brasslavsky v. Boston Elevated Railway, 250 Mass. 403, 404, and cases cited. The pleadings did not put in issue the genuineness of the signature of the defendant as maker of the note or the authority of Harry Rosenfield to sign the note for the defendant. G. L. (Ter. Ed.) c. 231, § 29, provides that a “signature to an instrument declared on or set forth as a cause of action . . . shall be taken as admitted unless the party sought to be charged thereby files in court, within the same length of time after such instrument is pleaded as is allowed for an answer, a specific denial of the genuineness thereof and a demand that it shall be proved at the trial.” This provision includes within its scope not only the actual signing of the instrument but also the authority of the signer, and is not complied with by a mere denial of the signature and of the authority of the signer to execute the instrument in behalf of the party for whom he purported to act. Scholl v. Gilman, 263 Mass. 295, 298, and cases cited. That the signature to the note in suit was the authorized signature of the defendant therefore was admitted. And the introduction of the note so signed established the right of the plaintiff — agreed by the parties to be a holder in due course — to a verdict. Beacon Trust Co. v. Barry, 260 Mass. 449, 450.

Exceptions overruled.