145 Minn. 149 | Minn. | 1920
Action by the plaintiff on a promissory note executed by the defendant Walters to the National Supply Company and by the latter indorsed to the plaintiff before maturity. The making and indorsement were admitted. The court found that the defendant had a defense against the payee; that the plaintiff purchased in good- faith; that the note was not negotiable, and that the plaintiff could not recover. The plaintiff appeals from the order denying his motion for a new trial.
Under the law of this state, as it was before the Negotiable Instrument Act of 1913, the note was not negotiable. Third National Bank of Syracuse v. Armstrong, 25 Minn. 530; Stevens v. Johnson, 28 Minn. 172, 9 N. W. 677; Deering v. Thom, 29 Minn. 120, 12 N. W. 350; Edwards v. Ramsey, 30 Minn. 91, 14 N. W. 212. The promise, within our holdings, was not unconditional. This is not the holding everywhere, and perhaps not the prevailing doctrine, though the difference in the phraseology of such notes gave rise to distinctions, sometimes uncertain or confusing, when one rule or the other is sought to be applied.
“An unqualified order or promise -to pay is unconditional within the meaning of this act though coupled with: (1) An indication of a particular fund out of which reimbursement is to be made, or a particular account to be debited with the amount; or (2) a statement of the transaction which gives rise to the instrument. But an order or promise to pay out of a particular fund is not unconditional.” Laws 1913, p. 374, c. 272, § 3; G. S. 1913, § 5815.
The precise qiiestion is whether the words of the note coupled with the promise constitute “a statement of the transaction which gives rise to the instrument,” within the meaning of the statute, and therefore by force of the statute the promise is unconditional, though before it under our decisions it was conditional. Our view is that the statute does not have the effect suggested. Some courts hold, under conditional sale contracts of one kind or another, that it has. Welch v. Owenby (Okl.) 175 Pac. 746; Citizens Nat. Bank v. Bucheit, 14 Ala. App. 511, 71 South. 82; Ex parte Bledsoe, 180 Ala. 586, 61 South. 813. And see Choate v. Stevens, 116 Mich. 28, 74 N. W. 289,43 L.R.A. 277. Others, under varying contracts, hold that it has not. Kimpton v. Studebaker Bros. Co. 14 Idaho, 552, 94 Pac. 1039, 125 Am. St. 185, 14 Ann. Cas. 1126; Reynolds v. Vint, 73 Ore. 528, 144 Pac. 526; Fleming v. Sherwood, 24 N. D. 144, 139 N. W. 101, 43 L.R.A.(N.S.) 945. And see Worden Grocer Co. v. Blanding, 161 Mich. 254, 126 N. W. 212, 20 Ann. Cas. 1332.
It is to be noted that differences in the wording of the contracts have given rise to distinctions and perhaps some confusion just as before the statute. A discussion of section 3 and á reference to cases arising under it is found in Brannan, Neg. Inst. Law, p. 15; Crawford, Neg. Inst. Law, p. 16; Ogden, Neg. Inst. p. 271.
The result would not justify the time nor the space necessary to a full citation or a critical discussion of the eases involving like or similar notes. The construction placed by different courts on section 3 indicates that the Negotiable Instrument Act fails of uniformity in the class of eases before us. If the courts were holding with substantial uniformity that section 3 has the effect claimed for it, we ought so much as possible to conform our views to theirs in aid of general .uniformity. Such is
Order affirmed.