Halstead v. Woods

• Decision Date: 22 June 1911
• Docket Number: No. 6,984.,6,984.
• Parties: HALSTEAD et al. v. WOODS.
• Court: Indiana Appellate Court

48 Ind.App. 127

95 N.E. 429

HALSTEAD et al.

v.WOODS.

No. 6,984.

Appellate Court of Indiana, Division No. 1.

June 22, 1911.

Appeal from Circuit Court, Newton County; C. W. Hanley, Judge.

Action by William S. Woods against Everett Halstead and others. From a judgment for plaintiff, defendants appeal. Affirmed.William Darroch, Foltz & Spitler, and Geo. A. Williams, for appellants. Hume L. Sammons and E. B. Sellers, for appellees.

MYERS, J.

In the court below, appellee, as indorsee, brought this action against appellants to enforce payment of a promissory note for $1,200, dated Mt. Ayr, Ind., March 29, 1904, payable on September 1, 1907, to McLaughlin Bros., at the Bank of Mt. Ayr. This cause was submitted to a jury for trial upon the complaint alleging, among other facts: “That the plaintiff holds said note in good faith, that he obtained it before maturity, paid a valuable consideration therefor, and at the time he so paid said consideration and took said assignment he had no notice of any defense thereto on the part of the makers of said note,” and an answer in five paragraphs, the first of which was a general denial; second, material alteration of the note sued on after its execution; third, breach of a written warranty of a certain horse for which the note in suit was given; fourth, non est factum; fifth, failure of consideration, and a reply in general denial. The jury returned a general verdict in favor of appellee, together with their answer to an interrogatory submitted to them by the court on its own motion. Judgment in favor of appellee on the verdict.

Appellants' motion for a new trial was overruled, and this ruling is the only error presented for our consideration. Appellants in support of this motion first insist that the court erred in submitting to the jury over their objection the following interrogatory: “Did B. B. Miller sign his name to the note in suit on March 29, 1904, at Mt. Ayr, Ind.?” It is claimed that under the act of 1897 (Acts 1897, p. 128; section 572, Burns' 1908) the court under no circumstances is authorized to submit interrogatories to the jury unless requested so to do by at least one of the parties to the action. The act of 1897, supra, repealed section 546, Rev. St. 1881, which provided for special and general verdicts. By the repealed section the court in all cases when requested by either party was required to instruct the jury, if they rendered a general verdict, to find specially upon particular questions of fact to be stated in writing. Under this provision, on the theory of judicial discretion subject to review, it was held not to be error for the court on its own motion to prepare and propound to the jury proper interrogatories to be returned with their general verdict. Senhenn v. City of Evansville, 140 Ind. 675, 40 N. E. 69.

[1] That provision in the old statute, thus construed, was substantially re-enacted in 1897, and under a well-settled rule of construction it will be presumed that the Legislature, by re-enacting that part of the repealed statute, adopted the construction placed upon it by the courts, unless the contrary is clearly shown by the language of the act. Board of Commissioners v. Conner, 155 Ind. 484, 58 N. E. 828;Brown v. Miller, 162 Ind. 684, 71 N. E. 122.

[2] There is no language in the act of 1897, supra, from which it can be said that the Legislature intended that the trial court should not on its own motion submit proper interrogatories to the jury for answer, and to be returned with their general verdict. In this case the interrogatory called for a finding of fact within the issues, and the court did not commit error in submitting it.

Appellants also insist that the court erred in giving to the jury certain instructions. Our attention is first called to instructions 4 and 5, given by the court on its own motion. It is argued that instruction 4 is predicated on section 9071, Burns' 1908, which makes all written promises negotiable by indorsement, and that instruction 5 is based on section 9076, Burns' 1908, and is erroneous for the reason that no evidence was introduced showing that the note in question was payable in a bank in this state. It is true that the note in suit, although negotiable by indorsement, would not be free from defenses in the hands of appellee under section 9071, supra. The right of plaintiff to recover under instruction 4 was not made to depend upon the fact alone that the note was negotiable by indorsement. The jury were told that, if they found from all the evidence that the plaintiff was the owner of the note described in the complaint, that he took it before maturity, in the usual course of business, without notice of facts which impeached its validity between the original parties to the note, or such facts as should have put him on inquiry, then the plaintiff held the note by a good title free from all defenses that might have been made by the defendants if it had been sued on by McLaughlin Bros., “and, unless there are circumstances which excite suspicion, the purchaser is not bound to make inquiry at the time of the purchase.” Instruction 5, is practically the same as instruction 4, except it told the jury that a promissory note payable in a bank in this state is governed by the law merchant, and again informed them if they found certain facts, practically repeating those mentioned in instruction 4, the plaintiff would be entitled to recover, “even though as between the defendants and McLaughlin Bros. there existed equities in favor of the defendants, unless said note had been materially altered since it was executed.”

There was evidence before the jury tending to show that one B. B. Miller signed the note as maker, and that after its execution Miller's name had been removed therefrom. No other alteration or change is claimed. There was also evidence tending to support the alleged breach of warranty of the horse, and that the consideration for the note had failed. The note itself was introduced in evidence. It had no visible erasure marks, nor was it interlineated.

[3] It was the duty of the court to apply the law to the note as it appeared upon its face, and to instruct the jury regarding the defenses urged against it. It was for the court to say whether the note upon its face was governed by the law merchant. Nipp v. Diskey, 81 Ind. 214, 42 Am. Rep. 124;Louthian v. Miller, 85 Ind. 161.

[4] It was in the hands of an indorsee, and, as no infirmity appears upon its face, its possession and production raises the presumption that it came into the hands of the holder “in the usual course of business, for value, without notice of any defect in the consideration.” Sondheim v. Gilbert, Assignee, 117 Ind. 71, 18 N. E. 687, 5 L. R. A. 432, 10 Am. St. Rep. 23;Citizens' Bank v. Leonhart, 126 Ind. 206, 25 N. E. 1099;Fisher v. Fisher, 113 Ind. 474, 15 N. E. 832;Tescher v. Merea, 118 Ind. 586, 21 N. E. 316.

As the correctness of instructions 4 and 5, and most of the others to which objection is made, depends upon whether the note in suit was negotiable as an inland bill of exchange, it is necessary that we pass upon that question. It is the theory of appellants that it was not, and in support of their contention they insist that as it was payable “at the Bank of Mt. Ayr,” instead of “in the Bank of Mt. Ayr,” and it not appearing that the bank named was in Indiana, as required by St. § 9076, supra, therefore its place of payment was uncertain.

[5] It must be conceded that certainty is required by the law merchant, and uncertainty in any of the essential elements of a note to bring it within that law will destroy its negotiability as an inland bill. Whether the note in question should be given the dignity claimed for it must be determined from the facts appearing upon its face, unaided by extraneous evidence. Crossan v. May, 68 Ind. 242, 245.

[6] A promissory note is not negotiable as an inland bill of exchange, unless on its face its date is certain, and it is an unconditional promise to pay a certain sum of money at a fixed time in a bank of this state. Gilpin v. People's Bank, 90 N. E. 91.

[7] The note in suit upon its face is dated at Mt. Ayr, Ind., March 29, 1904, and is an unconditional promise to pay $1,200, ...