Haggard v. Mutual Oil & Refining Co.
| Decision Date | 01 July 1924 |
| Citation | 263 S.W. 745,204 Ky. 209 |
| Parties | HAGGARD v. MUTUAL OIL & REFINING CO. |
| Court | Kentucky Court of Appeals |
Appeal from Circiut Court, Clark County.
Action by Rodney Haggard against the Mutual Oil & Refining Company. Judgment for defendant, and plaintiff appeals. Affirmed.
Hays & Hays and Rodney Haggard, all of Winchester, for appellant.
James Parks, of Lexington, for appellee.
The single question presented by this appeal is whether or not the following check is a negotiable instrument:
"$2,500.00. Winchester, Ky. July 10, 1920.
The Winchester Bank, of Winchester, Ky.: Pay to Arco Refinery Construction Company twenty-five hundred and no/100 dollars for a/c constructing refinery, switch, and loading racks Win. Ky.
Subdivision 4 of section 3720b, which is the Negotiable Instruments Act (Acts 1913, p. 213), § 1, provides that:
"An instrument to be negotiable must conform to the following requirements: * * * (4) Must be payable to the order of a specified person or to bearer."
Since, as the check itself shows, and as is admittedly true, the maker, in issuing the check, drew a line through the printed words "or bearer," we need only to examine it to ascertain whether or not it was "payable to the order of a specified person," for unless so, it lacked one of the essentials prescribed for negotiability.
Section 8 of the act (section 3720b8 of the Statutes) defines when an instrument is payable to order as follows:
"The instrument is payable to order where it is drawn payable to the order of a specified person or to him or his order."
It will be noticed that the above check is not payable to the order of the payee, nor to the payee or its order, but is payable simply to the payee. It therefore seems to us too clear for dispute that this check is not payable to order, and is therefore, as the lower court held, not negotiable.
In other words, we think it is clear that subsection 8 means, as it says, that the instrument must be payable either (1) to the order of the payee, or (2) to the payee or order, and that it does not permit of the construction that the instrument may be payable (1) to the order of the payee, (2) or to the payee, or (3) to his order.
To give the section the latter of these two constructions rather than the former makes the first and third alternatives identical, and this plainly was never intended. Not only is this conclusion unavoidable from a consideration simply of the language of the section, but it has uniformly been so construed by this and other courts. Wettlaufer v. Baxter, 137 Ky. 362, 125 S.W. 741, 26 L.R.A. (N. S.) 804; Kerr v. Smith, 156 A.D. 807, 142 N.Y.S. 57; Johnson v. Lassiter, 155 N.C. 47, 71 S.E. 23; Gilley v. Harrell, 118 Tenn. 115, 101 S.W. 424; Cowan v. Hallack, 9 Colo. 572, 13 P. 700; Fawsett v. U.S. Nat. L. Ins. Co., 97 Ill. 11, 37 Am.Rep. 95.
In England and Canada the rule is otherwise, but this is due to the fact that the Bills of Exchange Act expressly provides that a bill or note is payable to order where expressed to be payable to a particular person and not containing words prohibiting transfer or indicating an intention that it should not be transferable. 8 C.J. 153.
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