Clay & Funkhouser Banking Company v. Dobyns
| Decision Date | 06 November 1923 |
| Parties | CLAY & FUNKHOUSER BANKING COMPANY, Appellant, v. RALPH DOBYNS and A. L. HENDRIX, Respondents |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of Audrain County.--Hon. Ernest S Gantt, Judge.
AFFIRMED.
Judgment affirmed.
Fry & Fry for appellant.
(1) A bill of exchange may be accepted before it has been signed by the drawer, or while otherwise incomplete. Sec 924, R. S 1919; Daniel on Negotiable Instruments (6 Ed.), sec. 490. (2) If a party accept a bill in which no drawee is named, it will be regarded as acknowledging that he was the drawee and will operate as a complete accepted instrument. Daniel on Negotiable Instruments (6 Ed.), secs. 97, 486; 7 Cyc. 570; 1 Randolph on Commercial Paper (2 Ed.), 171; 8 Corpus Juris page 299; Wheeler v. Webster, 1 E. D. Smith 1; Watrous v. Halbrook, 39 Tex. 572. (3) Where the instrument is wanting in any material particular, the person in possession thereof has prima-facie authority to complete it by filling up the blanks therein. Sec. 801, R. S. 1919; 8 Corpus Juris, sec. 308, page 181; Angle v. N.W. Mutual Life Ins. Co., 92 U.S. 338; 3 R. C. L., pages 1011, 1012; Daniel on Negotiable Instruments (6 Ed.), sec. 142.
Rodgers & Buffington for respondents.
(1) In order for a bill of exchange to be a negotiable instrument a drawee must be named or otherwise indicated therein with reasonable certainty. Sec. 788, 912, R. S. 1919; 3 R. C. L., page 877, sec. 62. (2) Acceptance of a bill of exchange must be made by the drawee in writing. Sec. 918, R. S. 1919. (3) Plaintiff is not a holder in due course of the instruments sued on and they are subject to the same defense as when non-negotiable. Secs. 838, 844, R. S. 1919; McCullam v. Jewelry Co., 218 S.W. 345; The Mechanics Bank v. Valley Packing Co., 70 Mo. 643; Henderson v. Bondurant, 39 Mo. 369; Bank v. Bolan, 93 P. 508; Hughes & Co. v. Flint, 112 P. 633. (4) Plaintiff failed to make competent proof of indorsement of the instruments to the bank. 1 Wigmore on Evidence, page 791, sec. 693 et seq.
This is an action upon two bills of exchange, referred to in the evidence as trade acceptances. The two instruments are identical in form, and we set one of them out below, as follows:
"$ 250.00
Mexico, Mo., April 1, 1921.
To . . . .
Written across the face of each instrument, at the left end thereof, is the following:
The suit is by the plaintiff bank against the two acceptors, Dobyns and Hendrix, plaintiff claiming to be a holder in due course. The defense is that the acceptance of the instruments by defendants was procured by false and fraudulent representations on the part of the drawer thereof; that the acceptance by defendants was wholly without consideration; that the instruments were negotiated in breach of faith and under such circumstances as to amount to a fraud.
It appears from the testimony in plaintiff's behalf that plaintiff acquired the instruments before maturity, receiving them as collateral security for a loan made to the drawer, The Producers Consolidated Oil Company. And it further appears from plaintiff's evidence that plaintiff bank took the instruments without notice of the defense now asserted by these defendants.
The testimony in defendants' behalf tends to show that they accepted these instruments upon the agreement of The Producers Consolidated Oil Company that it would erect an oil pumping and filling station in Mexico, Missouri, and that defendants would receive certain coupon books entitling them to receive gas and oil from such station at a reduced rate. It appears, without dispute, that such gasoline and oil station was never completed; that the company became bankrupt and defendants received nothing whatsoever in the transaction. It further appears that the instruments were accepted by the defendants upon the agreement of the drawer that they would be placed in the Mexico Savings Bank with the coupon books to be delivered to defendants, there to remain until defendants had used the amount of gas and oil called for by such coupons.
At the close of the entire case the trial court peremptorily directed a verdict for the defendants, which was accordingly returned by the jury. From a judgment entered on this verdict the plaintiff has appealed.
In thus directing a verdict the trial court evidently proceeded upon the theory that neither of the instruments sued upon was complete and regular upon its face when negotiated, since the name of the drawee did not appear therein, and that consequently the plaintiff did not and could not become a holder thereof in due course under the statute. And such is the contention of learned counsel for defendants, respondents here. This contention, we think, must be upheld. Section 838 of our Negotiable Instruments Law, i. e., sec. 838 of the Revised Statutes of 1919, provides as follows:
"A holder in due course is a holder who has taken the instrument under the following conditions: (1) That it is complete and regular upon its face. . . ."
Other sections of our Negotiable Instruments Law are referred to by respondents in this connection, but we deem it unnecessary to advert thereto. No drawee is named upon the face of either of these instruments; the place intended for the name of the drawee being left blank. It is true that these defendants accepted the instruments by an acceptance written across the face of each thereof, and it is not disputed that they thereby became liable to the drawer, or to any subsequent holder, subject, however, to any defenses they might have as against the drawer; but we regard it as clear that since the instruments remained in this incomplete state and were thus negotiated, and indeed thus sued upon, neither this plaintiff nor any other person taking them when thus incomplete and irregular could become a holder in due course under section 838, supra.
In behalf of plaintiff, appellan...
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