WATERTOWN FEDERAL SAVINGS & LOAN ASSOCIATION vs. ROBERT W. SPANKS & another.

CUTTER, J. The plaintiff (the bank) seeks to recover from the defendants, husband and wife, upon a promissory note, dated June 24, 1959, payable to "Greenlaw & Sons Roofing & Siding Co.," indorsed to Colony Distributors, Inc. (Colony), by an indorsement signed "Greenlaw & Sons by George M. Greenlaw," and then indorsed by Colony to the bank. The defendants denied the genuineness of their purported signatures and of all indorsements and filed a declaration in set-off to recover their payments to the bank on the note.

At the trial, the defendants admitted signing the note and also a completion certificate which they had given to the

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bank. This certificate recited that the siding material, paid for by the note, had been attached to the defendants' house and that the work was satisfactory. The bank presented evidence of the balance due on the note.

The defendants requested the trial judge to rule that their "demand for proof . . . of their supposed signatures and of the supposed endorsements . . . is constructively broad enough to come within" G. L. c. 106, Section 3-203. [Note 1] The judge denied this request "not because as an abstract statement of law it may not be correct, but because, upon the facts as found by me . . . it has no bearing." [Note 2] Apart from an offer of proof mentioned later in this opinion, the defendants offered no evidence.

The trial judge found for the bank both as plaintiff and as defendant in set-off. The case is here on the defendants' bill of exceptions.

1. The trial judge correctly denied the defendants' requested ruling as immaterial. It does not appear that Greenlaw & Sons and Greenlaw & Sons Roofing & Siding Co. are not the same company. The indorsement by Greenlaw was not shown to have been in a name other than his own, nor is it shown that the name of the payee, as stated in the note, was not a name under which Greenlaw individually did business, identifiably repeated in the indorsement. Section 3-203 purports to give only an indorsee for value, and not the maker of a note, the power to require indorsement in both names in the circumstances stated in the section. No evidence was introduced with respect to the indorsement. It comes within G. L. c. 106, Section 3-307 (and see the official comments on that section), which reads in part, "(1) . . . When the effectiveness of a signature is

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put in issue (a) the burden of establishing it is on the party claiming under the signature; but (b) the signature is presumed to be genuine or authorized [with an exception not here pertinent]. (2) When signatures are . . . established, production of the instrument entitles a holder to recover on it unless the defendant establishes a defense." There was no evidence whatsoever to counter the presumption of the indorsement's regularity existing under Section 3-307 (1) (b). Thus the signature of Greenlaw was established under Section 3-307 (2), and the bank, as the holder of the note, see G. L. c. 106, Section 1-201 (20), is entitled to recover.

2. The defendants offered evidence tending to show a breach of warranty in the siding material. This evidence was excluded and the defendants made an offer of proof. The bill of exceptions does not establish that an exception was saved and the defendants' brief refers to the exception only casually. Even if it be assumed that an exception was saved, the facts stated in the offer of proof did not suffice to charge the bank, as holder of the note for value, with knowledge of any defence (see Gramatan Natl. Bank & Trust Co. v. Moody, 326 Mass. 367, 370-371) based upon breach of warranty, failure of consideration, or fraud, none of which was pleaded. See Indiana Flooring Co. v. Rudnick, 236 Mass. 90, 92-93. See also Dorr v. Fisher, 1 Cush. 271, 275-276; Lander v. Samuel Heller Leather Co. 314 Mass. 592, 596; Stow v. Commissioner of Corps. & Taxn. 336 Mass. 337, 341. There was no error in excluding the evidence.

Exceptions overruled.