Perry National Bank v. Engnell
| Decision Date | 24 June 1924 |
| Docket Number | 35335 |
| Parties | PERRY NATIONAL BANK, Appellant, v. ALBERT ENGNELL, Appellee |
| Court | Iowa Supreme Court |
Appeal from Boone District Court.--G. D. THOMPSON, Judge.
ACTION at law. There was a trial to a jury, resulting in a verdict for the plaintiff. From an order setting aside the verdict and granting a new trial, plaintiff appeals.
Affirmed.
George J. Dugan, Lyle W. Maley, and D. G. Baker, for appellant.
J. R Whitaker and F. W. Ganoe, for appellee.
The plaintiff bank, the appellant, sued to recover the amount due on a promissory note for $ 3,500, given by the defendant to the Perry Stock Remedy Manufacturing Company, alleging its purchase of the note from the payee, before maturity and for value. The defendant, in answer, alleged that the note was without consideration, and was procured by fraud, in that he never intended to execute a note, and his signature thereto was procured by fraud of one C. B. Boyer, acting for the payee, in falsely representing said note to be merely an agreement for defendant's son to act as agent in selling the stock remedies manufactured by the payee. It was further alleged that the note was not negotiable, and that the plaintiff became the owner of the note with knowledge of defendant's defenses thereto. In reply, plaintiff alleged that it was a bona-fide purchaser of the note for value before maturity, and that the defendant, by his negligence in failing to read the note before signing it, was estopped to set up fraud in the procurement of the note.
There was a verdict for the plaintiff for the amount due on the note. The defendant filed a motion for a new trial, based upon twenty-two grounds. The motion was sustained generally. The trial court indicated in the order sustaining the motion that he was of the opinion that error had been committed in instructing the jury that the note was negotiable. The other grounds of the motion, however, were not overruled. Under such circumstances, it is well settled that there cannot be a reversal if any of the grounds of the motion are good. Thomas v. Illinois C. R. Co., 169 Iowa 337, 151 N.W. 387; Van Wagenen v. Parsons, 106 Iowa 263, 76 N.W. 675; Holman v. Omaha & C. B. R. & B. Co., 110 Iowa 485, 81 N.W. 704; Boyd v. Western Union Tel. Co., 117 Iowa 338, 90 N.W. 711; Woodbury Co. v. Dougherty & Bryant Co., 161 Iowa 571, 143 N.W. 416; Post v. City of Dubuque, 158 Iowa 224. To hold otherwise would be to deprive the appellee of the benefit of any other ground of his motion than that considered by the trial court, no matter how meritorious it might be; for, as pointed out in the case last cited, he could not appeal unless the other grounds of his motion were expressly overruled. A large discretion is vested in the trial court in passing on such a motion, and its exercise will not be interfered with where a new trial has been granted unless the discretion appears to have been abused. Post v. City of Dubuque, supra; Woodbury Co. v. Dougherty & Bryant Co., supra.
We are confronted by the further situation that many of the grounds of the motion for a new trial are not argued by appellant. The argument is almost wholly confined to two propositions: (1) That the note is negotiable; and (2) that the plaintiff was entitled to a directed verdict. The separate grounds of the motion for a new trial, save as relating to the negotiability of the note, are not referred to, except incidentally in discussing these questions. This court cannot, under such circumstances, interfere with the order granting a new trial. Boyd v. Western Union Tel. Co., supra; Sprager v. Rogers Coal & Min. Co. (Iowa), 125 N.W. 185 (not officially reported).
However, in view of the fact that the question of the negotiability of the note is presented by the record, is argued at length by both parties, and will necessarily arise on a retrial, we deem it proper to indicate our view upon the question.
The note is as follows:
It is urged that the agreement to pay without discount or offset, the waiver of exemption, and the stipulation that any justice of the peace may have jurisdiction to the extent of three hundred dollars, each operate to destroy the negotiability of the note.
Section 3060-a5 of the Code Supplement, 1913, the Negotiable Instruments Act, provides:
Section 3060-a1 provides that an instrument, to be negotiable, must contain an unconditional promise to pay a sum certain, and must be payable on demand or at a fixed or determinable future time.
The promise to pay the amount of the note without discount or offset does not render uncertain the amount to be paid. The plain import of the language is, on the contrary, to emphasize the certainty of the amount to be paid. The agreement to pay without discount adds nothing to the legal effect of the naked promise to pay the amount called for by the note. The promise to pay without offset is the equivalent of a promise to pay without defalcation. Defalcation is defined by Bouvier as the reduction of the claim of one of the contracting parties against the other by deducting from it a smaller claim due from the former to the latter. See also, McDonald v. Lee's Admr., 12 La. (Old Series) 435. A promise to pay without defalcation or offset is expressive of an attribute of negotiability, in that its ostensible purpose is to cut off defenses between the original parties, as against a holder in due course. Council Bluffs Iron Works v. Cuppey, 41 Iowa 104. Such a provision is, at most, no more than a waiver of a right given the obligor by law to offset any amount due him from the payee against the amount due on the note. It is expressly provided in the third paragraph of the quoted statute that a provision waiving the benefit of a law intended for the advantage of the obligor does not have the effect to destroy negotiability. Brannan on the Negotiable Instruments Law...
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