Triphonoff v. Sweeney

• Decision Date: 18 March 1913
• Citation: Triphonoff v. Sweeney, 65 Or. 299, 130 P. 979 (Or. 1913)
• Parties: TRIPHONOFF v. SWEENEY et al.
• Court: Oregon Supreme Court

130 P. 979

65 Or. 299

TRIPHONOFF v. SWEENEY et al.

Supreme Court of Oregon

March 18, 1913

Appeal from Circuit Court, Multnomah County; J.P. Kavanaugh, Judge.

Action by M.H. Triphonoff against J.W. Sweeney and others. Judgment for plaintiff, and defendants appeal. Affirmed.

This is an action to recover money. The cause was tried before a jury, and a verdict found in favor of plaintiff. From a judgment rendered thereon, defendants appeal.

The action is based on the following instrument: "No. 12413. Portland, Ore., April 15th, 1911. The United States National Bank of Portland, Oregon: Pay to the order of Dan Malcheff twenty-two hundred ninety-four and 78-100 ($2294.78) dollars. J.W. Sweeney Construction Co., by S.M. Blumauer." The instrument was executed on or about the 25th day of March 1911, and postdated on the 15th day of April, 1911. Thereafter, and before maturity, the same was indorsed and transferred to plaintiff, as he avers, in due course of business and for a valuable consideration, plaintiff having no knowledge whatsoever at the time that the check had been dishonored or that payment thereof had been stopped, or that any infirmity in the instrument, or defect in the title existed. After the execution of the check, the J.W. Sweeney Construction Company stopped the payment. About the 17th day of April, 1911, plaintiff, as holder of the instrument or check, presented the same for payment to the United States National Bank, which subsequently returned it to plaintiff with the following stamped across the face thereof: "Payment Stopped"--and refused to honor the same. Plaintiff then instituted this action. The defendants answered, admitting the execution of the instrument, and denying its indorsement in due course or for value, and denying its presentment and dishonor. They further averred that the check was executed without any consideration; that Dan Malcheff, the payee, who had been engaged in work for the defendant J.W. Sweeney Construction Company, presented to defendant company a false and forged estimate of the work done by him, upon which estimate the check was issued; that the check was postdated; that the plaintiff knew of such fraudulent estimate of work, and did not act in good faith in securing the check; that the transfer was without consideration. Plaintiff's reply put in issue the new matter of the answer. Defendants assign as error the holding of the court that the check in controversy was a negotiable instrument.

Alex Bernstein, of Portland (Bernstein & Cohen, of Portland, on the brief), for appellants.

G.G. Schmitt, of Portland, for respondent.

BEAN J. (after stating the facts as above).

Counsel for defendants contend that the fact that the check was postdated was sufficient to put the plaintiff upon inquiry as to any infirmity in the instrument, or defect in the title, and that the court erred in refusing to instruct the jury as requested by defendants' counsel, as follows: "That a postdated check is not a negotiable instrument if taken before the date on which demand can be made for payment, but is simply an assignment of the rights of the payee and opens the check to all the equity." Section 5834, L.O.L., being a part of the negotiable instruments law of this state, provides that a negotiable instrument must conform to the following requirements: (1) It must be in writing and signed by the maker or drawer; (2) must contain an unconditional promise or order to pay a sum certain in money; (3) must be payable on demand, or at a fixed or determinable future time; (4) must be payable to order or to bearer; and (5), where the instrument is addressed to a drawee, he must be named or otherwise indicated therein within reasonable certainty. However we may designate the instrument in suit, we think there can be no question but that it complies with all the necessary requirements of the law as to a negotiable instrument. It is full and complete upon its face. It is worthy of note that section 5834, L.O.L., does not require a negotiable instrument to be dated. Section 6018, L.O.L., defines a check as follows: "A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this act applicable to a bill of exchange payable on demand apply to a check." Section 5845, L.O.L., purports that the instrument is not invalid for the reason only that it is antedated or postdated, provided this is not done for an illegal or fraudulent purpose. The person to whom an instrument so dated is delivered acquires the title thereto as of the date of delivery. It is the position of counsel for defendants that this section renders an antedated or postdated instrument merely legal, and does not make it negotiable. We fail to see any reason why it was necessary for this enactment in order that the issuance of such an instrument should not be in violation of any statute or law. The purpose of the negotiable instruments law is to direct the proper method of dealing with such an instrument. This section has a broader signification, and renders a postdated or antedated check full, complete, and valid.

Independent of any statutory regulation, it makes no difference whether a check be postdated or antedated, it is still payable according to its express terms. The drawing of a postdated check is an everyday occurrence in the commercial world, and the uniform understanding of the parties is that, when a check is postdated, it is payable on the day it purports to be drawn, even though it be negotiated beforehand. 2 Daniel on Negotiable Instruments (5th Ed.) § 1578; Frazier v. Trow's P. & B. Co., 24 Hun (N.Y.) 281; Champion v. Gordon, 70 Pa. 474, 10 Am.Rep. 681. It is said in 5 Amer. & Eng.Enc. of Law (2d Ed.) p. 1032, that: "A postdated check, or one which bears a date subsequent to that of its actual issue, is payable on or at any time after the day of its date, being in effect the same as if it had not been issued until that date." The rule is laid down in Selover on Negotiable Instruments Law, § 18, that an antedated or postdated instrument may, of course, be negotiated after or before the date given, and any one to whom such an instrument is given acquires title thereto as of the date of delivery. The contention of the defendants is that the instrument was not a check, for the reason that it was not payable on demand, and that the same was not negotiable. We incline to the belief that the instrument was a check, payable on demand on or after April 15, 1911. This conclusion is in harmony with cases wherein it is held that a postdated instrument of this nature is a check, and not a bill of exchange, which would authorize the holder to present the same for acceptance prior to the time when it would be payable. Way v. Towle, 155 Mass. 374, 29 N.E. 506, 31 Am.St.Rep. 552.

The real question in the case at bar is: Was the instrument subject to any available defense as between maker and payee after it was negotiated to plaintiff? In the consideration of these cases it should be borne in mind that the negotiable instruments law was adopted by several of the states for the purpose of uniformity, and we think that this should be one of the aims of courts. Section 5861, L. O.L., directs that absence or failure of consideration is matter of defense as against any person not a holder in due course. Section 5885 prescribes that a holder in due course is a holder who has taken the instrument under the following conditions: (1) That it is complete and regular upon its face; (2) that he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such were the fact; (3) that he took it in good faith and for value; (4) that at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. Section 5889 provides that, to constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the...