Menke v. Board of Ed., Independent School Dist. of West Burlington

• Decision Date: 17 October 1973
• Docket Number: No. 55776,55776
• Citation: 211 N.W.2d 601
• Parties: 13 UCC Rep.Serv. 675 Richard R. MENKE, d/b/a Menke Plumbing-Heating & Sheet Metal Work, Appellant, v. BOARD OF EDUCATION, INDEPENDENT SCHOOL DISTRICT OF WEST BURLINGTON, Iowa, Appellee, and The State Central Savings Bank, Defendant-Appellant.
• Court: Iowa Supreme Court

Page 601

211 N.W.2d 601

13 UCC Rep.Serv. 675

Richard R. MENKE, d/b/a Menke Plumbing-Heating & Sheet Metal Work, Appellant, v. BOARD OF EDUCATION, INDEPENDENT SCHOOL DISTRICT OF WEST BURLINGTON, Iowa, Appellee and The State Central Savings Bank, Defendant-Appellant.

No. 55776.

Supreme Court of Iowa.

Oct. 17, 1973.

Napier, Napier & Wright, Fort Madison for appellant Menke.

Pryor, Riley, Jones & Walsh, Burlington, for appellant The State Central Savings Bank.

Cray, Walter, Cray & Loeschen, Burlington, for appellee.

Heard by MOORE, C.J., and REES, REYNOLDSON, HARRIS and McCORMICK, JJ.

REES, Justice.

This matter comes to us on two separate appeals; one brought by the plaintiff Menke, and the other by defendant, The State Central Savings Bank. Both appeals are directed against the order of the trial court sustaining motion of defendant Board of Education of the Independent School District of West Burlington, Iowa, for judgment on the pleadings.

Plaintiff Richard R. Menke is an individual operating under the trade name and

style of Menke Plumbing-Heating & Sheet Metal Work with his place of business at West Point, Iowa. In response to an invitation to bid on work to be done on an addition to the West Burlington senior high school, plaintiff submitted a bid, and accompanied his bid with a check drawn on defendant Bank in the principal sum of $6300 and payable to the secretary of the Board of Education of the West Burlington Community School District. The check was dated June 30, 1970 and was apparently submitted for certification to an officer or employee of defendant Bank on the same date. The officer or employee of the bank caused to be impressed on the face of the check a stamp in words and figures as follows:

CERTIFIED

June 30, 1970

The State Central Savings Bank

West Point Office, West Point, Iowa

Manager

$6,300.00

No signature appeared on the line provided therefor.

When the bids were opened by the defendant Board of Education, it was found that plaintiff Menke's bid was the lowest submitted. However, on July 17, 1970 the Board, or its architect, advised plaintiff by letter that it was returning his check to him, and that the Board of Education had adopted a resolution not to allow his bid security as a legitimate certified check since it was not signed by an official of the bank making the certification. The contract was let to another bidder, and plaintiff instituted his suit against the Board of Education and the defendant Bank, claiming he had been damaged by the loss of net profits he would have realized from the performance of the contract in the amount of $45,000.

Plaintiff's petition against both defendants is in four divisions; in divisions I and IV of his petition as amended, he alleged in substance that defendant Board of Education had wrongfully and in breach of contract rejected his low bid. In divisions II and III of his petition as amended, he asserted that defendant State Central Savings Bank had negligently and in breach of contract failed to properly certify the check which he had submitted with his bid to defendant Board of Education.

Following the filing of separate answers, the Board of Education filed its application for adjudication of law points. In its ruling on the same, the trial court held: (1) the check presented by plaintiff with his bid was not certified as provided by law; (2) plaintiff's bid was defective because a proper certified check was not submitted therewith in conformity to the invitation to submit bids, and that therefore the defendant Board had a right to reject the bid; and (3) that plaintiff had stated no cause of action against the Board since he did not allege fraud.

Following the ruling of trial court on the application for adjudication of law points, the defendant Board of Education moved for judgment on the pleadings, asking that the petition as against it be dismissed at plaintiff's costs. The motion of the defendant Board for judgment on the pleadings was sustained and the appeals of both plaintiff and defendant Bank are directed at such ruling.

Defendant Bank did not join in the application of the Board of Education for separate adjudication of law points, nor did it join in the Board's motion for judgment on the pleadings. Neither did it file separate applications or motions.

Defendant Bank assigns the following errors upon which it relies for reversal:

1. Trial court erred in ruling questions involved were of law only and not questions of both law and fact.

2. Trial court erred in ruling the check accompanying Menke's bid was not a certified check as a matter of law.

3. Trial court erred in ruling the Board of Education had the right to consider Menke's bid and reject the bid because the 'certification' was not signed.

4. Trial court erred in ruling an unsuccessful low bidder on a public contract does not have a right to recover damages from the public body, the Board of Education, for its failure to award the contract to the low bidder.

Plaintiff Menke advances the following statements of error on which he relies for reversal:

1. Trial court was correct in its ruling the check was not properly certified by the Bank.

2. If, however, the supreme court reverses the above determination and holds the check was properly certified, then

(a) trial court erred in ruling the bid was defective and, therefore, the Board had the right to reject it; and

(b) trial court erred in ruling Menke did not have a cause of action against the Board.

I. We first consider the appeal of defendant State Central Savings Bank.

Defendant Bank contends that questions of check certification and the liability of the Board of Education in refusing a bid accompanied by an allegedly uncertified check, were not properly subject to a motion for separate adjudication of law points under rule 105, Rules of Civil Procedure, and the court's determination thereof was error. The Bank asserts that a factual dispute existed as to its intent to certify Menke's check, and that consequently the question was not purely one of law for adjudication under rule 105.

We are unable to agree that any fact question was involved in the determination as to whether the check was certified, and conclude the court acted properly in determining separate law points under the motion of the Board of Education.

At 10 Am.Jur.2d, Banks, § 590, p. 557, we find:

'When a check is certified, it ceases to possess the character or to perform the functions of an ordinary check; it represents so much money on deposit, payable to the holder on demand. The certification of a check is a Contract which brings the holder of the check into privity with the drawee bank which has certified it.' (Emphasis supplied).

We have heretofore said that under certain circumstances, construction of a written contract is a matter of law for the courts to decide without resort to extrinsic evidence. See General Casualty Co. of Wis. v. Hines, 261 Iowa 738, 156 N.W.2d 118 (1968); Boyer v. Iowa High School Athletic Ass'n, 260 Iowa 1061, 152 N.W.2d 293 (1967); Schlotter v. Leudt, 255 Iowa 640, 123 N.W.2d 434; Huntsman v. Eldon Miller, Inc., 251 Iowa 478, 101 N.W.2d 531. While the authorities cited do not involve a certified check situation, we do recognize that there are instances when the question of intention turns upon the construction of a writing, and is thus a proper question of law for the court. 53 Am.Jur., Trial, section 219, p. 187.

A motion for separate adjudication of points of law under rule 105, R.C.P., is for the purpose of determining uncontroverted pleaded issues raising points of law. Norland v. Mason City, 199 N.W.2d 316, 318 (Iowa 1972); Rasmussen v. Nebraska Nat'l. Life Insurance Co., 170 N.W.2d 370, 373 (Iowa 1969). There was no controversy in the pleadings as to the form of the writing said to constitute the certified check, and the court could properly rule on the validity and construction of the check and its certification, including the bank's intention, from the writing itself.

In its brief and argument, defendant Board of Education aptly observes:

'The question * * * becomes simply what are the legal requirements for certification, and does a check marked as shown in Exhibit 'A' * * * meet these requirements. This question is one of the law of commercial instruments and is not a fact question.'

We agree and hold the trial court did not go beyond the intent and contemplation of rule 105 in ruling on the Board's motion for separate adjudication of law points in this case on either the check certification question or the derivative question as to the liability of the Board of Education in refusing to accept the check.

II. The principal issue presented by the Bank's appeal is whether a check stamped as was the check in the case here is properly certified as a matter of law. The Bank claims the stamp placed upon the check by it is adequate to constitute a certification. The lower court held, and plaintiff Menke and defendant Board assert in this appeal that the stamped words indicating certification without the signature of a bank official do not as a matter of law suffice to effect proper certification of the check. We are persuaded the trial court was correct in its ruling, and agree with plaintiff and defendant Board.

We are unable to find precedent holding that that there is any specified form essential to the certification of a check. At 10 Am.Jur.2d, Banks, § 589, p. 557, we find:

'The usual practice is to stamp or write on the check the word 'certified', 'good', 'accepted', or an equivalent expression, With the signature of the certifying officer.' (Emphasis supplied).

Section 554.3411(1), The Code, which is embraced in the Uniform Commercial Code provisions, defines certification of a check to be acceptance. 'Acceptance' consists of 'the drawee's Signed engagement to honor the draft as presented. It must be written on the draft, and may consist of his signature alone.' (Emphasis...