233 F. 838 | W.D. Wash. | 1916
Plaintiff has commenced an action against the defendant receiver, in which it alleges, in substance: That on the 8th of July, 1914, the United States National Bank, of which the defendant is the receiver, issued to Winkleman Bag Company a certificate of deposit as follows: “Winkleman Bag Company has deposited in this bank .$3,000.00, payable to the order of ourselves, on return of this certificate properly indorsed.” That on- the back of the certificate was indorsed: “On or after October 8, 1914, pay to the order of the National City Bank of Seattle, Washington. [Signed] Winkle-man Bag Company, by R. Winkleman.” And it alleges: That the words “to the order of ourselves” were understood between the United .States National Bank and Winkleman Bag Company to mean that the certificate was to be payable to the order of Winkleman Bag Company, and that such was the intention and agreement of the parties, and states that for value this certificate was negotiated on July 9th to the plaintiff, who paid in good faith a valuable consideration. That the United States National Bank became insolvent, and the defendant was appointed receiver. That claim was made to the receiver and rejected. And it asks that the certificate be reformed or corrected, so as to have the word “ourselves” changed to the word “themselves,” and then asks that it be allowed as a claim against the insolvent bank and permitted to participate in dividends.
The defendant admits the issuance of the certificate, denies there was any mistake, and makes some affirmative defenses, in which it states that at the time the Winkleman Bag Company was indebted to the United States National Bank in a sum greater than the amount named in the certificate, and that the certificate was issued without any consideration, etc.
The plaintiff replies, taking issue with the affirmative matters of the answer.
“A holder in due course is a holder who has taken the instrument under the following conditions: First. That it is complete and regular upon its face. * * * Fourth. 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.”
And section 3574, supra:
« * * * Where a note is drawn to the maker’s own order, it is not complete until indorsed by him.”
I think, from the evidence in this case, that tire plaintiff must be held to notice of the infirmity of the instrument. While it appears regular on its face, it was not complete within these statutory provisions, because it was not indorsed by the maker, and therefore not taken in due course of business. Section 3440, Rem. & Bal. Code Wash.; Central Trust Co. v. First Nat. Bank, 101 U. S. 68, 25 L. Ed. 876; Goshen Nat. Bank v. Bingham, 118 N. Y. 349, 23 N. E. 180, 7 L. R. A. 595, 16 Am. St. Rep. 765; Lancaster Nat. Bank v. Taylor, 100 Mass. 18, 1 Am. Rep. 71, 97 Am. Dec. 70; Hughes & Co. v. Flint,
Scales v. Ashbrock, 1 Metc. (Ky.) 358, has no application. That suit was between the immediate parties. The liability was one founded on money had and received, and the note was merely evidence of such fact. The other cases cited are to correct contracts in no sense negotiable, and are therefore foreign to this issue.
Decree for defendant.
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