McCornick & Co. v. Nielson

• Decision Date: 28 January 1925
• Docket Number: 4079
• Citation: 64 Utah 605,233 P. 122
• Parties: McCORNICK & CO., Bankers, v. NIELSON
• Court: Utah Supreme Court

233 P. 122

64 Utah 605

McCORNICK & CO., Bankers, v. NIELSON

No. 4079

Supreme Court of Utah

January 28, 1925

Appeal from District Court, Seventh District, Sanpete County Dilworth Woolley, Judge.

Action by McCornick & Co., Bankers, against S. R. Nielson. Judgment for plaintiff, and defendant appeals.

AFFIRMED.

Lewis Larson, of Manti, for appellant.

Gustin & Pence, of Salt Lake City, and A. H. Christensen, of Manti for respondent.

GIDEON C. J. FRICK and CHERRY, JJ., and McCREA, District Judge, concur. Term of office of Hon. A. J. WEBER, who was Chief Justice, expired before disposition of this case. THURMAN, J., did not participate.

OPINION

GIDEON, C. J.

Respondent, plaintiff below, was given judgment against appellant, defendant below, upon a promissory note executed by appellant and made payable to himself.

The note is dated November 6, 1919, and by its terms was payable on November 15, 1920. The appellant, being both maker and payee of the note, indorsed it in blank. Thereafter, on or about December 16, 1919, plaintiff obtained the note in due course for a valuable consideration from one Thomas L. Matkins who indorsed it without recourse.

The court found that there was no consideration for the note and that appellant was induced to sign it by reason of certain false representations made by said Matkins. The court also found, however, that the respondent obtained the note without any knowledge or information of its illegality or want of consideration.

The only question presented by this appeal is, as stated in appellant's brief: "Is the note negotiable?" The note is in the usual form. It contains a definite promise to pay at a date certain. The note concludes:

"The makers and indorsers of this note each expressly waive demand, notice of nonpayment, and protest and suit against the maker, and also agree that this note may be extended in whole or in part without their consent."

Appellant's contention is that the words quoted, and particularly the clause "that this note may be extended in whole or in part without their consent," render the note nonnegotiable; that this provision renders the time of payment uncertain; and that certainty is one of the essential elements necessary to make the note negotiable. Comp. Laws Utah 1917, § 4030, one of the sections of the Negotiable Instruments Act. It is provided in that section, to make an instrument negotiable:

"It must be in writing and signed by the maker or drawer; * * * must contain an unconditional promise or order to pay a sum certain in money; * * * must be payable on demand, or at a fixed or determinable future time."

On the question here presented the authorities are not in agreement. In well-considered cases the appellate courts of several states have reached the conclusion that similar language to that found in the instant case renders such instruments nonnegotiable. The author of Brannen's Negotiable Instruments Law (3d Ed.) in section 184, at page 390, in discussing the effect of like provisions in notes, says:

"In the great majority of cases since the Negotiable Instruments Law, such provisions have been held not to impair the negotiability of the instrument."

In support of that statement numerous cases are cited.

Uniformity in construction of the several provisions of the Negotiable Instruments Law is essential, if the objects sought by the act are to be attained. In addition the reasoning of the courts, which hold that like provisions do not make the instrument nonnegotiable, appeals to us as bottomed on sound logic, and as being in conformity with legal principles. The Supreme Court of Texas, in National Bank of Commerce v. Kenney, 98 Tex. 300, 83 S.W., at page 371,...