State v. Doudna

• Citation: 284 N.W. 113,226 Iowa 351
• Decision Date: 14 February 1939
• Docket Number: 44042.
• Parties: STATE v. DOUDNA.
• Court: United States State Supreme Court of Iowa

284 N.W. 113

226 Iowa 351

STATE v. DOUDNA.

No. 44042.

Supreme Court of Iowa.

February 14, 1939

Appeal from District Court, Henry County; Oscar Hale, Judge.

Defendant was indicted, tried and convicted of the crime of false uttering a bank check. From such conviction he appeals.

Affirmed.

McCoid, McCoid & McCoid, of Mt. Pleasant, and E. H. Lundy, D W. Dickinson, and John L. Butler, all of Eldora, for appellant.

John H. Mitchell, Atty. Gen., Harold McLeran, Co. Atty., and J. V Gray, Sp. Asst. Co. Atty., both of Mt. Pleasant, and Buell McCash, Sp. Asst. Atty. Gen., for appellee.

OLIVER, Justice.

Appellant, Vern I. Doudna, from June, 1935, to December, 1936, was engaged in the business of selling livestock at Winfield, Iowa. These operations were carried on under the name of Doudna Livestock Co., and while the business appears to have been conducted by appellant alone there is some evidence in the record that it was a joint enterprise participated in by Mrs. Doudna. The banking business was done with the First Bank & Trust Co. of Ottumwa, Iowa, about 65 miles from Winfield. The costs of operating said enterprise and the purchases of livestock were paid with certain written instruments having the appearance of checks. These instruments were not on the regular form furnished by the bank, but were on a form appellant himself secured and habitually used and which were always considered and treated by the banks as checks. More than four thousand of these instruments were so handled and cashed by the bank during the time of defendant's operations and the parties who received them appear usually to have regarded them as ordinary checks.

On November 27, 1936, an employee of Mrs. Kathryn Brandmeyer, the complaining witness, under her instructions, delivered to appellant, at Winfield, 10 hogs belonging to Mrs. Brandmeyer. After securing possession of said hogs appellant paid for the same with an instrument in the form of a voucher check to Mrs. Brandmeyer for $204.42. This instrument, which was dated November 28, was handed said employee by appellant at about 7 p. m., which was after banking hours on the 27th, and too late to cash it that day. The employee took the instrument to Mrs. Brandmeyer, she deposited it in her account in Henry County Savings Bank, it was forwarded through channels to the First Bank & Trust Co. of Ottumwa, Iowa, was not paid and was returned to Henry County Savings Bank, and charged to Mrs. Brandmeyer's account. When the instrument was executed and uttered by appellant, and at all times thereafter, there were not sufficient funds in the Doudna Livestock Co., account in the First Bank & Trust Co. to pay the same.

Shortly thereafter appellant was, on account of said transaction, indicted, tried, convicted and sentenced, under Code Section 13047, for the crime of false uttering a bank check, draft or written order. This appeal has been taken from the judgment and all adverse rulings.

I.

It is contended by appellant that the instrument in question is a note, and not a check or written order upon a bank, and, therefore, is not within the purview of the statute. The bank is named in the instrument, says appellant, merely as a place for payment and not as the party to whom the instrument is addressed. Therefore, appellant avers, the instrument cannot be a check or order because it contains no drawee. For this reason appellant would have Ex. " 1" construed as a promissory note.

The record shows that both appellant and certain parties with whom he dealt, in conversations with each other, referred to this form of instrument as a check. It further appears that said form of instrument was at all times regarded and treated by the First Bank & Trust Co. as a check, and that about four thousand such instruments were so handled and cashed by the bank during the year and a half in question. The record also shows appellant admitted to a witness the instrument could not be considered a check and that it was used to protect himself in case of financial reverses.

The instrument, which is known as Ex. " 1", has the appearance of an ordinary check. In the upper right-hand corner, in small print and writing, are the words " Ottumwa, Iowa, Nov. 28, 1936" . In the upper right, in largest print, " No. 6131", in the upper center, in largest print, " Doudna Livestock Co.", and immediately below, in medium print, " Winfield, Iowa" . At the left center, in small print, " will pay to the order of", followed by a line across the instrument upon which is written " Mrs. Katherine Brandmeir $204.42" . Immediately below this is another line upon which was written " Two Hundred and Four 42/100", followed by the word " Dollars" in print. At the left bottom, in small print, the words " payable at", underneath those words, in large print, " The First Bank & Trust Co.", and below those words, in small print, " Ottumwa, Iowa" . In the place for signature at the right bottom, in medium print, " Doudna Livestock Co.", below which is a line upon which is the printed word " By", and written " Vern I. Doudna (Mgr.)" On the back of the instrument is printed the following, " By his endorsement hereon the payee represents and guarantees that he was at the time of issuance hereof the sole and unconditional owner of the livestock for which this paper is given and that there are no mortgages or other liens against such livestock", underneath which was a line for signature, at the end of which was printed the word " payee", and immediately under said line is printed the following, " Payment will not be made unless payee signs upon the above line" .

The voucher attached to this instrument, and known as Ex. " 2", recites that it was issued to Mrs. Katherine Brandmeir, Nov. 28, 1936, and " the above is in full settlement for 10 brd., weight 2210, price 9.25, total amount 204.42" . It will thus be noted that the instrument has all the characteristics of an ordinary check rather than a note, except the word " will" in small print before the words " pay to the order of", also in small print, and except that it contained the words " payable at" above the name of the First Bank & Trust Co.

The instrument is cleverly constructed and it is evident that the form was prepared for the specific purpose, in part at least, of rendering appellant immune from criminal prosecution under Code Section 13047, upon which he was tried and convicted in this case. The form of the instrument which is strikingly similar to an ordinary business check and not at all like the ordinary form of promissory note, the size of the type used in various portions thereof and its wording, and the arrangement thereof, bear evidence in confirmation of this. Apparently, for the studied purpose of completing the analogy, the instrument expresses no time when it shall be paid, like a check, but very unlike the ordinary printed note form. Furthermore, the fact that endorsement is required by the payee and the wording of the printing on the back of the instrument show a deliberate attempt to put the instrument in such form that it might be endorsed, as a check, at the time of payment, instead of being cancelled as is customarily done in the case of a paid note.

In Negotiable Instruments Law, Chapter 424 of the Code, is the following:

" 9477. [§ 17.] Construction . Where the language of the instrument is ambiguous, or there are omissions therein, the following rules of construction apply: * * *

5. Where the instrument is so ambiguous that there is doubt whether it is a bill or a note, the holder may treat it as either, at his election."

" 9548. [§ 87.] Rule where instrument payable at bank . Where the instrument is made payable at a bank it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon."

This court has not construed the provisions of Code Section 9548 with reference to an instrument of this character. However, in a number of cases from other jurisdictions under the Negotiable Instruments Law, this section has been held to mean that where a note is made payable at a bank it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon and is equivalent to a check. Brown v. Boston First Nat. Bank, 216 Mass. 298, 103 N.E. 780; Baldwin's Bank of Penn Yan v. Smith, 215 N.Y. 76, 109 N.E. 138, L.R.A.1918F, 1089, Ann.Cas.1917A, 500; Commercial Nat. Bank v. Henninger, 105 Pa. 496; Heinrich v. First Nat. Bank, 219 N.Y. 1, 113 N.E. 531, L.R.A.1917A, 655; West St. Louis Trust Co. v. American Surety Co. of N.Y., 222 Mo.App. 393, 5 S.W.2d 669; Peaslee-Gaulbert Co. v. Dixon, 172 N.C. 411, 90 S.E. 421; Caine v. Foreman, 106 Cal.App. 636, 289 P. 929; Shaw v. R. C. Flick Merc. Co., Tex.Civ.App., 26 S.W.2d 1077; United States v. Nat. City Bank, 2 Cir., 83 F.2d 236, 106 A.L.R. 1235.

Some cases which hold to the contrary concede that a rule similar to that would apply in case of a course of dealings between the maker and the bank in which such instruments had been regularly paid, as in the case at bar. Grissom v. Commercial Nat. Bank, 87 Tenn. 350, 10 S.W. 774, 3 L.R.A. 273, 10 Am.St.Rep. 669.

The above cases are not cited with the thought of establishing the doctrines therein enunciated and upon these matters no opinion is expressed. However, they are authorities proper to be considered in construing the instrument in question herein.

It is and has been the general practice of banks to furnish specially printed checks for the use of certain customers frequently worded in this fashion; John Doe, in large print in the upper center, pay to the order of blank, in small print, at the left center, two lines across the check for payee's name and amount, name of bank in large print, at lower left, and line for...