White v. Cushing

• Decision Date: 13 January 1896
• Parties: WHITE v. CUSHING.
• Court: Maine Supreme Court

34 A. 164

88 Me. 339

WHITE

v. CUSHING.

Supreme Judicial Court of Maine.

Jan. 13, 1896.

(Official.)

Exceptions from supreme judicial court, Piscataquis county.

Assumpsit by John White against James N. Cushing. There was a judgment for plaintiff, and defendant brings exceptions. Sustained.

T. W. Vose, for plaintiff.

J. B. Peaks, for defendant.

FOSTER, J. The plaintiff sues as indorsee of an order, signed by the defendant of the following tenor:

"$120. Dover, Oct 27, 1893. Piscataquis Savings Bank: Pay James Lawler, or order, one hundred and twenty dollars, and charge to my account on book No. ——. J. N.

Cushing. Witness,——. The bank book of the depositor must accompany this order."

The order was indorsed in blank, on the back, by James Lawler and Samuel Lewis, and the plaintiff claimed to recover against the defendant as upon a negotiable instrument. The real question presented is whether the instrument declared on is negotiable, so that an action may be maintained upon it in the name of, the indorsee.

To constitute a negotiable draft or order, it must be a written order from one party to another for the payment of a certain sum of money, and that absolutely, and without any contingency that would embarrass its circulation, to a third party, or his order, or bearer.

It has often been held that a bill or note is not negotiable if made payable out of a particular fund. But there is a distinction between such instruments made payable out of a particular fund, and those that are simply chargeable to a particular account. In the latter case, the payment is not, made to depend upon the adequacy of that fund, the only purpose being to inform the drawee as to his means of reimbursement, and the negotiability of the instrument is not affected by it.

The objection that is raised to the negotiability of this instrument is, not that it is made payable out of a particular fund, but that it is subject to such a contingency as necessarily embarrasses its circulation, and imposes a restraint upon its negotiability, by means of these words, contained upon the face of the order: "The bank book of the depositor must accompany this order." Although these words are upon the face of the order, below the signature of the drawer, they were there at the time of its inception, became a substantive part of it, and qualified its terms as if they had been inserted in the body of the instrument. Littlefield v. Coombs, 71 Me. 110; Cushing v. Field, 70 Me. 50, 54; Johnson v. Heagan, 23 Me. 329; Barnard v. Cushing, 4 Metc. (Mass.) 230; Heywood v. Perrin, 10 Pick. 228; Benedict v. Cowden, 49 N. Y. 396; Costelo v. Crowell, 127 Mass. 293, and cases there cited.

Was the order negotiable? The answer to that depends upon the effect of the words: "The bank book of the depositor must accompany this order." If not negotiable, the plaintiff, as indorsee, cannot maintain an action upon it. Noyes v. Gilman, 65 Me. 589. If their effect is such as to constitute a contingency in relation to the payment of the order, dependent upon the production of the drawer's bank book by the holder or indorsee of the order, then they must be regarded as such an embarrassment to the negotiation of the order, and such a restriction upon its circulation for commercial purposes, as to render it nonnegotiable.

Without these words, the order is payable absolutely, and there is no apparent uncertainty affecting its negotiability. With them, the order is payable only upon contingency or condition, and that is upon the production of the drawer's bank book. This is rendered imperative from the language employed, and the bank upon which the order is drawn would have the right to insist upon such production of the book in compliance with the terms of the order; and the case shows that it has refused payment upon presentation of the order, for the reason that it was not accompanied by the bank book. It cannot, therefore, be regarded as payable absolutely, and without any contingency that would embarrass its...