Bank of Carroll v. Taylor

• Decision Date: 12 December 1885
• Citation: 25 N.W. 810,67 Iowa 572
• Parties: BANK OF CARROLL v. TAYLOR.
• Court: Iowa Supreme Court

67 Iowa 572

25 N.W. 810

BANK OF CARROLL

v.TAYLOR.

Supreme Court of Iowa.

Filed December 12, 1885.

Appeal from Guthrie circuit court.

This action was brought by plaintiff on two instruments in writing, executed by defendant, by which he agreed to pay J. W. Stoddard, or bearer, different sums of money. Plaintiff alleges that it purchased said instruments for a valuable consideration, before maturity. Defendant answered, pleading a failure of the consideration of said instruments; but the averment in the petition that plaintiff is a purchaser of the instruments before maturity for value is not denied by the answer. Plaintiff demurred to the answer on the ground that the failure of the consideration of said instruments was not a defense against them in the hands of a purchaser for value before maturity. This demurrer was overruled, and plaintiff, electing to stand thereon, judgment was entered against it dismissing the petition, and for costs. Plaintiff appeals.William H. Stiles, for appellant, Bank of Carroll.

Arthur Spahr and Lyman Porter, for appellee, Samuel Taylor.

REED, J.

The following is a copy of one of the instruments sued on:-“$40.00. COON RAPIDS, IOWA, 5, 4, 1881. On the twenty-fifth day of Decem, ber, 1881, for value received, I promise to pay J. W. Stoddard, or bearer-forty dollars, with interest at ten per cent., payable annually, from date until paid, and ten per cent. is to be added to the amount if this note remains unpaid after maturity and is collected by suit. For the consideration mentioned above the undersigned hereby sells and conveys to J. W. Stoddard the following property: One Triumph Drill, No. --, upon condition, however, that if this note and mortgage shall be paid on or before the maturity thereof then this mortgage to be void, otherwise in full force; and it is further agreed that in case of failure to pay the amount due thereon at maturity, or when ever the holder hereof may deem himself insecure, then he may take said property by virtue of this mortgage and sell the same at public auction, as by law provided; the proceeds of said sale, after deducting all expenses, to be applied on this note and mortgage, the residue, if any, be returned to the undersigned.” The only respect in which the other instrument differs from this is in the amount received and the time of payment.

The question presented is whether these instruments are negotiable. Certainty as to the payor and payee, the amount to be paid, and the time of payment is an essential quality of a negotiable promissory note. The first provision of the instruments in suit is an undertaking by the maker to pay to the person named as payee, or to bearer, a specified sum of money, with interest thereon at a certain date. This provision, standing alone, contains all the elements of negotiability. If the instruments are not...