Hartington Nat. Bank v. Breslin
| Citation | 88 Neb. 47,128 N.W. 659 |
| Decision Date | 26 November 1910 |
| Docket Number | No. 16,196.,16,196. |
| Parties | HARTINGTON NAT. BANK v. BRESLIN ET AL. |
| Court | Supreme Court of Nebraska |
Defendant signed a promissory note which was perfect on its face, with the exception of a blank for the name of the payee, and intrusted it to his comaker who delivered it in that form to a bank two days later, before it was due, in violation of an agreement that it should be used by him in buying a meat market, that the name of the seller should be inserted in the blank, and that the note should be returned to defendant if not used for that purpose. The bank accepted the note at its face value and afterward inserted its own name in the blank as payee. Held, that the instrument is not enforceable against defendant within the meaning of that part of the negotiable instruments law relating to the filling of blanks and containing among other things the following provision: “In order, however, that any such instrument when completed may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time.” Comp. St. 1909, c. 41, § 14.
Appeal from District Court, Cedar County; Graves, Judge.
Action by the Hartington National Bank against W. J. Breslin and John Wiebelhaus. Judgment for plaintiff, and defendant Wiebelhaus appeals. Reversed and remanded.B. Ready, for appellant.
R. J. Millard, for appellee.
This is a suit on a promissory note for $400, dated June 18, 1907, and due six months hence. W. J. Breslin and John Wiebelhaus were makers and the Hartington National Bank was the payee and holder. The summons was not served on Breslin and the controversy is between the bank as plaintiff and Wiebelhaus as defendant. From a judgment on the verdict of a jury for the full amount of plaintiff's claim, defendant has appealed.
The substance of the defense pleaded is: Defendant and Breslin signed the note, but left a blank for the name of the payee. It was agreed between them that the note should be used by Breslin in purchasing a meat market at Fordyce from the owner whose name was at the time unknown but which afterward was found to be Jacob Hauri. In the event of a purchase Hauri's name was to be inserted in the blank, but otherwise the note was to be returned to defendant. The insertion of the name of the bank as payee was not authorized by defendant and he never consented thereto. The proof of these facts is uncontradicted.
On plaintiff's side of the case the following facts are shown without contradiction: When defendant signed the note he exacted as security from Breslin a deed to three lots in the city of Hartington and at the time of the trial the title thereto stood in defendant's name. In the meantime he had collected the rents and profits. When the note was delivered to plaintiff it was a perfect instrument, with the exception of a blank for the name of the payee. It had not been altered and bore on its face no intimation of the agreements pleaded as a defense. Breslin delivered the note to plaintiff on or before June 20, 1907, and in addition to a cash payment it was accepted by the bank at its face value in full satisfaction and discharge of a mortgage on Breslin's property. Afterward plaintiff inserted its own name in the blank as payee, having had no actual notice of the alleged agreements between the makers.
Plaintiff contends that defendant made no defense to the note and that on the undisputed evidence the judgment rendered was proper. This position seems to be correct, if the controversy is to be determined without regard to the Negotiable Instruments Law of 1905 (Comp. St. 1909, c. 41). According to the rules of the law merchant, when defendant signed the note without restriction, leaving a blank for the name of the payee, and intrusted it to his comaker, he gave to a bona fide holder implied authority to fill the blank and perfect the instrument. Humphrey Hardware Co. v. Herrick, 72 Neb. 878, 101 N. W. 1016, 102 N. W. 1610; Page v. Morrel, 3 Abb. Dec. (N. Y.) 433; Redlich v. Doll, 54 N. Y. 234, 13 Am. Rep. 573;Spitler v. James, 32 Ind. 202, 2 Am. Rep. 334;Gothrupt v. Williamson, 61 Ind. 599;Bank of Pittsburg v. Neal, 63 U. S. 96, 16 L. Ed. 323. Under the law merchant a bona fide holder was permitted to insert his name in a blank left for the name of the payee. Townsend v. France, 2 Houst. (Del.) 441; Rich v. Starbuck, 51 Ind. 87; Greenhow v. Boyle, 7 Blackf. (Ind.) 56; Dunham v. Clogg, 30 Md. 284;Boyd v. McCann, 10 Md. 118;Schooler v. Tilden, 71 Mo. 580;Hardy v. Norton, 66 Barb. (N. Y.) 527;Seay v. State Bank, 3 Sneed (Tenn.) 558, 67 Am. Dec. 579;Close v. Fields, 2 Tex. 232. On the record presented there...
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