First Nat. Bank v. Power Equipment Co.
Decision Date | 18 November 1930 |
Docket Number | 40495 |
Citation | 233 N.W. 103,211 Iowa 153 |
Parties | FIRST NATIONAL BANK, STATESVILLE, NORTH CAROLINA, Appellant, v. POWER EQUIPMENT COMPANY, Appellee |
Court | Iowa Supreme Court |
Appeal from Polk District Court.--O. S. FRANKLIN, Judge.
Suit by the indorsee of a trade acceptance. The defense claimed was that the trade acceptance was nonnegotiable, and affirmative defenses growing out of a claimed collateral agreement respecting the renewal of said trade acceptance were pleaded. The plaintiff pleads an estoppel, in its reply. The court directed a verdict in behalf of the defendant.
Affirmed.
Maxwell & Ryan and Lehan T. Ryan, for appellant.
Brammer Brody, Charlton & Parker, for appellee.
The Turner Manufacturing Company is located in Statesville, North Carolina. The Power Equipment Company is located in Des Moines. On December 1, 1928, the Equipment Company executed and delivered to the Manufacturing Company a certain trade acceptance, which is in words and figures as follows:
On the reverse side thereof appears the following indorsement: "C. H. Turner Mfg. Company, by D. C. Ritchie, Sec' y."
Before March 1, 1929, the Turner Manufacturing Company duly indorsed said trade acceptance to the appellant bank, which was a purchaser thereof in due course. The trade acceptance was presented for payment at the Des Moines National Bank, where by its terms it was made payable, on March 1, 1929, and was protested for nonpayment. This action is brought to recover the amount due on said trade acceptance.
I. The first question for our determination is whether or not the trade acceptance is a negotiable instrument. If it is, then the court erred in sustaining appellee's motion for a directed verdict. It is to be observed that the trade acceptance contains the following sentence:
"The obligation of the accepter hereof arises out of the purchase of goods from the drawer, maturity being in conformity with the original terms of the purchase."
Two clauses are embraced in this sentence, which are separated by a comma. The first clause is as follows: "The obligation of the accepter hereof arises out of the purchase of goods from the drawer." This clause is one which is frequently inserted in trade acceptances.
Section 9463, Code, 1927, which is a part of the Negotiable Instruments Act, provides in part as follows:
Under this provision of the Uniform Negotiable Instruments Act, such a clause does not render the instrument nonnegotiable. Mercantile Protective Bureau v. Specht, 58 N.D. 239 (225 N.W. 794); Wakem v. Schneider, 192 Wis. 528 (213 N.W. 328); McCornick & Co. v. Gem State Oil & Prod. Co., 38 Idaho 470 (222 P. 286); Coopersmith v. Maunz, 227 A.D. 119 (237 N.Y.S. 1).
II. Does the clause "maturity being in conformity with the original terms of the purchase" render the instrument nonnegotiable? This identical clause in a trade acceptance has been the subject of consideration by three courts, so far as we are advised. In Heller v. Cuddy, 172 Minn. 126 (214 N.W. 924), the Supreme Court of Minnesota, considering this clause, said:
In Lane Co. v. Crum (Tex.), 291 S.W. 1084, the Commission of Appeals of Texas considered a trade obligation containing the clause under consideration, and the court said:
In Westlake Merc. Fin. Corp. v. Merritt, 204 Cal. 673 (269 P. 620), the Supreme Court of California considered a trade acceptance containing the clause in question here. The court said:
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... ... the face of the $6,500 check when first" received by plaintiff ... RPT.CC.1949105266.00010 ... \xC2" ... Code of Iowa 1946, § 541.3(2), I.C.A.; First ... National Bank v. Power Equipment Co., 211 Iowa 153, 155, 233 ... N.W. 103; Williamson v. Craig, ... Moreover, it ... is not the rule in this state. Midwest Nat. Bank & Trust Co ... v. Niles & Watters Savings Bank, 190 Iowa 752, 180 ... ...
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First Nat. Bank v. Power Equip. Co.
...211 Iowa 153233 N.W. 103FIRST NAT. BANK, STATESVILLE, N. C.,v.POWER EQUIPMENT CO.No. 40495.Supreme Court of Iowa.Nov. 18, 1930 ... Appeal from District Court, Polk County; O. S. Franklin, Judge.Suit by the indorsee of a trade acceptance. The defense claimed was that the trade acceptance was nonnegotiable, and affirmative defenses growing out of a claimed collateral ... ...