Melton v. Gibson

• Decision Date: 20 September 1884
• Docket Number: 11,524
• Citation: 97 Ind. 158
• Parties: Melton et al. v. Gibson
• Court: Indiana Supreme Court

97 Ind. 158

Melton et al. v. Gibson

No. 11,524

Supreme Court of Indiana

September 20, 1884

From the Kosciusko Circuit Court.

Judgment affirmed.

L. H Haymond and L. W. Royse, for appellants.

J. D Widaman and J. W. Cook, for appellee.

OPINION

Elliott C. J.

The note upon which this action is founded is payable at a bank in this State, and to the "Jacksonville Sulkey Plow Works or bearer." By our statute, promissory notes payable at a bank in this State are negotiable under the law merchant, and by that law all promissory notes in the hands of a holder for value, without notice, and where title was acquired before maturity, are protected against the defences of want or failure of consideration.

The contention of the appellant is, that as the note is payable to bearer, and not to order, it is not protected by the law merchant. This contention can not prevail. A promissory note payable to a designated person or bearer, or payable to bearer, is a valid promissory note, and as such is, when payable at a bank in this State, protected as commercial paper in the hands of a bona fide holder. Story says: "So, a note payable to A or bearer, or payable to bearer, is a valid promissory note." Story Prom. Notes, section 36. A note payable to bearer is, in legal contemplation, payable to the person who becomes the lawful holder. 1 Daniel Neg. Inst., section 99. It is, however, argued that promissory notes are negotiable by virtue of our statute, and that we can not look outside of our own State for authority. It is true that our statute does establish peculiar rules upon this subject. Bullitt v. Scribner, 1 Blackf. 14; Holloway v. Porter, 46 Ind. 62. But, while this is true, it is also true that promissory notes payable in bank are made negotiable as inland bills of exchange, and such instruments, as is well known, are protected in the hands of bona fide holders. Our statute does not determine what a valid promissory note is, but accepts as the correct description of such an instrument that given by the common law authorities. The statute does not profess to define what shall be the form or effect of a promissory note, but provides that when such an instrument is payable at a bank in this State, it shall have the same protection as that given to inland bills of exchange. The effect of this provision is not to give the character of a promissory note to an instrument, but to require that in order that the note shall possess the requisite of negotiability under the law merchant, it must be...