188 Iowa 330 | Iowa | 1919
The note in suit is for $240, and is dated September 8, 1911. It was duly signed by both defendants, while it was blank as to the name of the payee. The defendant Athey presented the same in such condition at the plaintiff bank, for the purpose of negotiation. With his consent, the name of the plaintiff was inserted as payee, and the same
The plaintiff pleaded in reply, in substance, that Murphy was not a surety on the note, but was the beneficiary of the loan to be obtained thereon; that he was a principal signer, and not a surety, in that this method had been adopted by Murphy and Athey, whereby Murphy was to pay the note, and thereby to discharge a debt of $240 owed by him to Athey. Only two issues of fact presented by the pleadings were contested in the evidence. These were:
1. Did Murphy instruct Athey not to insert the name of the plaintiff as payee in the note?
2. As between Murphy and Athey, was Murphy a surety, or was he the principal debtor?
The general contention for the appellant is that only the first of the above questions was material, and that an affirmative finding thereon would be conclusive of the case in favor of Murphy. The more important errors assigned are centered upon this proposition.
Before proceeding to consider the specifications of error, we may as well set forth here certain portions of the record which form the principal storm center of the appeal. The claim that Athey violated his instructions in permitting the name of the plaintiff to be inserted as payee of the note is based fipon the following testimony of Murphy:
“At the time I signed it, the note was not made payable to anyone. John Athey brought the note to me to be signed. At that time, I told Mr. Athey the note should be made payable to the German-American Savings Bank of Marengo.
This claim rests also, as a matter of law, upon Section 3060-al4, Code Supplement, 1913, of the Negotiable Instruments Act, as follows:
“Sec. 3060-al4. Where the instrument-is wanting in any material particular, the person in possession thereof has a prima-facie 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.!’
The testimony of Murphy, both on the question of his instructions to Athey and on the question of suretyship, was contradicted by the testimony of Athey. According to the testimony of Athey, he was not limited in his authority as to the selection of the payee; and furthermore, the negotiation of this note was the method adopted by the makers, to
The trial court gave the law of the case to the jury in Instructions Nos. 2 and 8, as follows:
“2. Now, the defendant Murphy in this case claims that, at the time he signed this note, he informed Athey that he did not want the note given to the First National Bank, and that he did not want the name of the First National Bank filled in. The burden of proof is upon the defendant Murphy to establish this claim of his by a preponderance of the evidence; and, if he has shown you, by a preponderance of the evidence, that, at the time he signed the note, he informed Athey that he did not want- the name of the First National Bank filled in as payee, then you are instructed that the plaintiff in this action cannot recover upon this note, unless it is allowed to recover on account of some of the grounds hereinafter stated; but if the defendant Murphy has failed to establish his claim, then you are instructed that the plaintiff is entitled to judgment as against the defendant Murphy for the full amount of the note.
“3. The plaintiff, as a further claim against the defendant Murphy, says that, on or about the 8th day of September, 1911, Murphy was indebted to Athey in the sum of $240, growing out of the transaction of buying and shipping some stock, and Murphy agreed witl^ Athey to make out a note for that amount, with the payee left blank, so that Athey could fill in the name of the payee and get the money on said note, and that the note in suit was given, by Murphy under those conditions. The defendant Murphy denies this claim of the plaintiff. Now, you are instructed that the burden of proof is, upon the plaintiff to establish the claim made by it in this paragraph of these instructions by a preponderance of the evidence, and if the plaintiff has shown you, by a preponderance of the evidence, that Murphy signed the note under the conditions claimed by plaintiff, as set out
With so much of the record before us, the specifications of error may be discussed without undue elaboration.
I. Murphy will be referred to herein as though sole defendant. He moved to strike so much of plaintiff’s reply as took issue with his allegation of suretyship, and which pleaded affirmatively that, as between him and Athey, he was the principal debtor. The general ground of this motion was that such matter was immaterial and irrelevant, and not pertinent to any material issue in the case. It will be noted, from what has already been .said concerning the record, that the defendant, by his answer, first tendered issue on the question of his suretyship. The reply, both in its denial and in the affirmative matter, was responsive to the defendant’s allegation of suretyship. The defendant, in his answer, treated the question of suretyship as material to his defense. If material, the matters pleaded in the reply contradictory thereto were necessarily material, also. It is true, however, that the issue thus made by answer and reply was, in a sense, collateral only to the main issue. The main issue was, Was the name of the payee inserted in. the note without the authority of the defendant? The materiality of the question of suretyship was that, if the defendant was surety only, then the law of the case was wholly contained in Section 3060-alá of the Negotiable Instruments Act, above quoted. On the other hand, if the defendant, as between him and Athey, was the principal, and not a surety, then the law of the case was not wholly contained in said section. If it were true that the defendant was the prin-
“Unless the defendant Murphy has shown you, by a preponderance of the evidence, that, at the time he signed said note, he did so with the agreement or understanding with
This clause should have been wholly omitted. The instruction' should have ended with what preceded. If this instruction had ended at this point, it would have rendered both instructions harmonious. As it was, Instruction 3 added nothing to Instruction 2. The error, however, was wholly to the advantage of the defendant, and could not be prejudicial to him. The effect of Instruction 3 was to make the question of excess of authority by Athey controlling, and to defeat the note, even though the defendant had got the full benefit of its proceeds. The error, therefore, worked no prejudice to the defendant. If the judgment below had been against the plaintiff, quite a different question would be presented.
IV. The appellant complains of the expression, “agreement or understanding,” which is to be found in the latter part of Instruction 3. The argument is that it was sufficient for Murphy to show that he had mstructed Athey what he should not do, and that it was not necessary that there should be any agreement or understanding, afid that there was no evidence of any agreement or understanding. It is
We have gone through the careful and thorough argument for appellant with much care. It would serve no useful purpose to dwell specifically upon each assignment there