First Bank of Marianna v. Havana Canning Co.

• Decision Date: 02 April 1940
• Citation: 142 Fla. 554,195 So. 188
• Parties: FIRST BANK OF MARIANNA v. HAVANA CANNING CO.
• Court: Florida Supreme Court

195 So. 188

142 Fla. 554

FIRST BANK OF MARIANNA v. HAVANA CANNING CO.

Florida Supreme Court, Division B.

April 2, 1940

Certiorari to Circuit Court, Gadsden County; J. B. Johnson, Judge.

Action in assumpsit upon bank check by the First Bank of Marianna as endorsee, against the Havana Canning Company, as maker. Judgment for defendant was affirmed by the circuit court, and plaintiff brings certiorari.

Judgment quashed.

COUNSEL

John H. Carter and John H. Carter, Jr., both of Marianna, for petitioner.

Clyde W. Atkinson, of Tallahassee, for respondent.

OPINION

PER CURIAM.

This case is before us on writ of certiorari granted to the Circuit Court of Gadsden County.

The cause originated in the County Court of Gadsden County as an action in assumpsit, instituted by an endorsee of a bank 'check' against the maker thereof, to recover the face value of said 'check' from the maker.

To the single count declaration defendant interposed a demurrer which the court sustained, and plaintiff declining to amend or plead further, final judgment was entered in favor of defendant.

On appeal to the Circuit Court the judgment was affirmed because the Circuit Judge was 'of the opinion that the notation on the check made the same a nonnegotiable instrument and that the Bank taking the same at the time it did is not a holder in due course.'

The sole question to be determined is whether the notation 'For berries to be delvd us June 8th' appearing in the lower left-hand corner of a bank 'check' dated June 7th 1938, rendered the 'check' conditional and non-negotiable.

The bank 'check' involved here contained the following on its face:

'No 278

Havana, Fla. June 7th, 1938.

'Havana State Bank

'68-170

'Pay to the order of George Wells $125.00 One hundred twenty-five and no/100..... Dollars.

For berries to be delvd us June 8th

Havana Canning Co.

E. J. Stephens, Pres.'

The 'check' contained the following endorsements on the back thereof:

'George Wells

R. E. Wells

Pay to the order of

Any Bank, Banker or Trust Co.

All prior endorsements guaranteed Jun 7 1938

The First Bank of Marianna 63-106 Marianna 63-106 Florida

John L. McFarlin, Jr., Cashier.

Pay to the order of

Any Bank, Banker or Trust Co.

Previous endorsements guaranteed Jun. 8 1938

The Florida, National Bank Jacksonville

63-5 Florida 63-5

N. A. Wakefield, Cashier.'

The word 'check' is defined by our statute, Sec. 6924, (4838) C.G.L., as follows:

'A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this Chapter applicable to a bill of exchange payable on demand apply to a check.'

A negotiable instrument is defined by our statute, Sec. 6761(4675) C.G.L., as one which must conform to the following requirements:

'1. It must be in writing and signed by the maker or drawer.

'2. Must contain an unconditional promise or order to pay a certain sum in money.

'3. Must be payable on demand, or at fixed or determinable future time.

'4. Must be payable to order or to bearer; and,

'5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty.'

This check is (1) in writing and signed by the maker; (2) contains an order to pay a sum certain in money; (3) is payable on demand; (4) is payable to order; and (5) the Havana State Bank is definitely named as drawee therein.

There is only one point to consider, that is, whether the order to pay the sum certain was unconditional. So far as the check itself is concerned, eliminating from consideration the notation in the lower left-hand corner thereof, it is an unconditional order to pay a sum certain in money. Does the addition of the words in the lower left-hand corner, 'For berries to be delvd us June 8th,' add a condition to the otherwise unconditional order to pay a sum certain in money, and thus destroy its negotiability?

Sec. 6763(4677) C.G.L., provides in part as follows:

'An unqualified order or promise to pay is unconditional within the meaning of this Chapter, though coupled with: * * *

'2. A statement of the transaction which gives rise to the instrument.'

That brings us to the inquiry as to what constitutes a statement of the transaction giving rise to the instrument.

It has been held that a statement in a trade acceptance that the obligation of the acceptor arises out of the purchase of goods from the drawer does not, under this section, deprive the instrument of its negotiability. Johnston v. Wolf, 118 Cal.App. 388, 5 P.2d 673; McCornick & Co. v. Gem State Oil & Products Co., 38 Idaho 470, 222 P. 286, 34 A.L.R. 867; Heller v. Cuddy, 172 Minn. 126, 214 N.W. 924; Coppersmith v. Maunz, 227 A.D. 119, 237 N.Y.S. 1; Mercantile Protective Bureau v. Specht, 58 N.D. 239, 225 N.W. 794; Traders' Securities Co. v. Kalil, 107 Pa. Super. 215, 162 A. 499; American Exchange National Bank v. Steeley, Tex.Civ.App., 10 S.W.2d 1038; Arrington v. Mercantile Protective Bureau, Inc., Tex.Com.App., 24 S.W.2d 383, affirming, Tex.Civ.App., 15 S.W.2d 663; P.J. Williams Industries, Inc. v. First State Bank of Lyford, Tex.Civ.App., 38 S.W.2d 1109; Bartoshesky v. Houston Trading Corporation, 39 Del. 310, 198 A. 697. A note containing a statement of the transaction out of which it arose and an agreement to return the goods purchased on default is negotiable. Remedial Plan v. Ott, 199 Ky. 161, 250 S.W. 825. A notation on a trade acceptance 'in settlement of the purchase of goods as billed in our invoice, No. -----, dated ---,' does not destroy its negotiability. Levy v. Artophone Co., Mo.App., 249 S.W. 158, 159.

It has been held that a notation on the face of a note that it is one of a series referred to in a conditional sale agreement does not render the note non-negotiable, being merely a statement of the transaction which gave rise to the instrument. Voges Motor Co. v. Ward, 98 Fla. 304, 123 So. 785; Fowler v. Industrial Acceptance Corp., 101 Fla. 259, 134 So. 60. The fact that a note retains title to the property described therein as a security for the debt does not destroy its negotiability. Bledsoe v. City National Bank, 7 Ala.App. 195, 60 So. 942; Citizens' National Bank v. Buckheit, 14 Ala.App. 511, 71 So. 82, certiorari denied, 196 Ala. 700, 72 So. 1019; Dart National Bank v. Burton, 258 Mich. 283, 241 N.W. 858. A note given under a conditional sale contract giving the holder an election to take the property in lieu of payment of money is negotiable. Sandlin v. Maury National Bank, 210 Ala. 349, 98 So. 190.

It has been held that the following notations on otherwise negotiable instruments do not render them non-negotiable; a recital below the maker's signature that the note is 'given to secure' a certain sum, Morehead v. Cummins, 207 Mo.App. 64, 230 S.W. 656; the words 'for unfinished work on bldg.' appearing on face of note, Cincinnati Brush & Mop Mfg. Co. v. Weber, 35 Ohio Opp. 506, 172 N.E. 568; a check with the clause 'to be used in part renewal of note', due on certain date, R. S. Howard Co. v. International Bank, 198 Mo.App. 284, 200 S.W. 91; a note containing the clause 'This note is given covering deferred installments under conditional sale contract for a motor vehicle.' Continental Guaranty Corp. v. People's Bus Line, Inc., 1 W. W. Harr., 595, 31 Del. 595, 117 A. 275, 276; a note stating it is given for the purchase of a stallion which the seller warrants, Critcher v. Ballard, 180 N.C. 111, 104 S.E. 134, see, also, Welch v. Owenby, 73 Okl. 212, 175 P. 746; a note that provides, 'This note is given in accordance with a land contract of even date herewith between E. H. Bauch and J. P. Considine', Doyle v. Considine, 195 Ill.App. 311; and a note containing a statement that it is given to take up the freight and rehandling of a certain car and that the proceeds from resale of such car shall apply on the note. First National Bank of Snohomish v. Sullivan, 66 Wash. 375, 119 P. 820, Ann.Cas.1913C, 930.

Words employed on the face of a bank check merely to designate the transaction for which the check is given do not...