154 Minn. 248 | Minn. | 1923
Action on promissory notes executed by defendant to plaintiff. There was a trial by the court without a jury, resulting in findings in plaintiff’s favor, and defendant has appealed from an order denying a new trial.
Specifying different due dates, the notes were in the following form:
St. Paul, Minnesota, April 29th, 1921 -■ $150.00
June 1st, 1921, after date, for value received, I promise to pay to the order of Liberty State Bank, St. Paul, Minnesota, One Hundred Fifty and No/100 dollars, with interest payable annually at the rate of eight per cent per annum. (Out of rénts from the Cole Apartments, Spruce Place, Minneapolis, Minn.)
Each maker, endorser and guarantor hereof, waives presentment for payment, notice of non-payment, protest, notice of protest and dishonor and consents to any extension or extensions of time for payment without notice.
METROPOLITAN CHURCH ASSOCIATION
By J. H. Barnes, Acting Trustee.
P. O. Waukesha, Wis.
Waukesha Natl. Bk.
The complaint set the notes out verbatim and alleged their execution and delivery to plaintiff, its continued ownership of them, and that they had not been paid. Defendant interposed a general demurrer, which was overruled. It then answered, alleging that the notes were executed for the benefit of Reece M. Newport, a real estate broker who, at the time of their execution, was negotiating with defendant for an exchange of property it owned for the Cole Apartments; that they represented the commission he was to receive if the exchange was made; that it was not made and defendant never re
Section 1 of the Uniform Negotiable Instruments Act (section 5813, G. S. 1913), provides that to be negotiable an instrument must contain an unconditional promise to pay a sum certain in money; and section 3 (section 5815, G. S. 1913), provides that an unqualified promise to pay is unconditional within the meaning of the act, though coupled with an indication of a particular fund out of which reimbursement is to be made, or with a statement of the transaction which gave rise to the instrument, but that a promise to pay out of a particular fund is not unconditional. These provisions are merely declaratory of the common law on the subject and succinctly summarize recognized principles. First Nat. Bank v. Lightner, 74 Kan. 736, 88 Pac. 59, 8 L. R. A. (N. S.) 231, 118 Am. St. 353, 11 Ann. Cas. 596. Tested by them, defendant contends that the notes are not negotiable and do not import a consideration, and hence plaintiff was required to plead and prove consideration. Conroy v. Ferree, 68 Minn. 325, 71 N. W. 383. More specifically, its contention is that upon their face the notes amount to nothing more than a promise to pay out of a particular fund, and do not carry the general personal credit of the maker since payment is contingent on the sufficiency of the fund specified.
On the other hand, plaintiff contends that the notes contain an absolute promise to pay, coupled with an indication of the particular fund out of which the maker is to be reimbursed, and hence by the terms of the act they are negotiable.
We need mot decide whether the notes were negotiable or nonnegotiable. As we read them, the maker’s only promise is to pay out of rents received from the Cole Apartments. The promisee is limited to payment from such rents. If no rents were received, there was no obligation to pay. The instrument must be considered in its entirety with regard to all its provisions. Third Nat. Bank v. Armstrong, 25 Minn. 530. It begins with an express promise to pay, but concludes with the designation of a fund out of which payment is to be made. Plaintiff could not make out a case without showing that defendant had received rents from the Cole Apartments.
Order reversed.