174 Iowa 357 | Iowa | 1916
The action is against ITuttig and Blackwell as endorsers on the following note:
“Summit Lumber Company
“Manufacturers of
“Soft Short Leaf Yellow Pine Timber
“$1,169.40 St. Louis, Mo., February 2nd, 1914.
“One month after date we promise to pay to the order of Devoy & Kuhn Coal & Coke Co., eleven hundred sixty-nine and 40/100 dollars at our office, 1014 Wright Bldg., St. Louis, Mo. Value received. Interest 6 per cent, per annum from date.
No. 2640 Summit Lumber Company,
Due 3-2-14 By Aylmer Flenniken, Treas.
‘ ‘ Endorsed as follows:
“1014 Wright Bldg.,
“Arkansas Southeastern R. R.
“J. S. Blackwell, President.
“J. S. Blackwell, Muscatine, Iowa.
“ H. W. Huttig, A. K. Silverthorne, North Tonawanda,
N. Y.”
“Q. Was it used for that purpose? A. It seems not. . Q.. Was it used to assist in financing the Summit Lumber Company? A. It was not.”
He then testified that it was given plaintiff to take up a note of like amount of the Arkansas Southeastern Railway Co. On cross-examination, he swore that the railway company was hauling logs for the lumber company; that there was an open account between them; and that he “thought that it would be all right to use the Summit Lumber Co. note to pay the debt of the Arkansas Southeastern Railway Co. and charge it to this account”. He testified further that he supposed it was so charged; that it should have been; and that, as president of the railway company, he knew that he had taken this on for it “because there was an open account between the two companies”.
Reichert arranged with Kuhn, plaintiff company’s president, to take the note sued on in satisfaction of a note of like amount executed by the railway company, and by direction of Blackwell filled in plaintiff’s name and the amount of the note, and, after Blackwell as president of the railway company had placed its name on the back of the note as ah endorser, delivered it to plaintiff. Huttig testified that he was president of the lumber company and auditor of the railway company ;■ that there was a contract between the two
“I never authorized Mr. Reichert or anybody else to fill in the name of Devoy & Kuhn Coal & Coke Co. I gave them authority to pay the debts of the Summit Lumber Co. Not any particular debt, any debt.”
The appellee insists that on this evidence the verdict was rightly directed, for that: (1) The filling in of the blanks was unauthorized; (2) the execution of the note was ultra vires; (3) the endorsement of the railway company constituted a material alteration; and (4) notice of dishonor was not served on the railway company, and, as it was primarily liable, the omission released Huttig.
“"Where the instrument is wanting in any material particular, the person in possession thereof has a prima-faeie authority to complete it by filling up the blanks therein. And a signature on a blank paper delivered by the person making the signature in order that the paper may be converted into a negotiable instrument operates as a prima-facie authority to fill it up as such for any amount. In order, however, that any such instrument when completed may be enforced against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given and within a reasonable time. But if any such instrument, after completion, is negotiated to a holder in due course it is valid and effectual for all purposes in his hands, and he may enforce it as if it had been filled up strictly in accordance with the authority given and within a reasonable time.”
“A long time previous to this we had a note signed by the Arkansas Southeastern*362 R. R. Co. That note became due, and in place of it there was given us a note signed by the Summit Lumber Co., and endorsed by the Arkansas Southeastern R. R. Co. by J. S. Blackwell, President, by J. S. Blackwell, the individual, and by A. K. Silverthorne. This note was paid by the Summit Lumber Co.
Cross-Examination.
“These notes were originally given to me by the Arkansas Southeastern for coal furnished that company. Two of these notes were renewed by notes of the Summit Lumber Co. The first , note was given by the company for coal furnished the Arkansas Southeastern Railway Co. That note was given by the Summit Lumber Co. and endorsed just like this note (Exhibit A) is endorsed.”
From this it might have been inferred either that the note of the Summit Lumber Co., taken up by that sued on, was given for coal furnished the railway company, or for a note of the railway company; and in either event the defense interposed just considered would not be available. There was no evidence tending to show that the note so taken up was not complete when delivered. It is presumed to have been given for a consideration. The defense of failure to comply with authority in filling the blanks must fail if the facts were as testified by Kuhn, then; for, under this evidence, the note sued on was used to pay on indebtedness of the lumber company, and Huttig admitted authorizing its use for such purpose. Whether delivered to plaintiff to take up a like note or one of the railway company was a material issue for the jury, involving the defense of noncompliance with authority in filling the blanks of the note, and should have been submitted to the jury.
III.. Appellant contends that Blackwell acted as Huttig’s agent in filling in the blanks of the note. Doubtless, he was acting for the Summit Lumber Co. in assisting in financing, but .had no authority, save under the .section quoted and as
The issues should have gone to the jury, and, for the error in directing a verdict, the judgment is — Reversed.