Rindskoff Bros. v. Barrett, 14 Iowa 101

14 Iowa 101 | Iowa | 1862

Wright, J.

The bill of exceptions recites that evidence was introduced tending to show that there was a custom among bankers, merchants and business men, in the city of Burlington, by which the note sued upon was negotiable, and several witnesses, viz.: W. P. C. and other citizens, who were bankers, merchants and business men, testified that there was such a custom. But some witnesses testified that they had lived' in Burlington many years, had had some opportunity to know if such custom did exist, but that they knew nothing of it. W. W. W. testified that he had been in the banking business for some ten years in the city, that at its date he was connected with the banking house where said note was payable, that the defendant generally made his notes payable there because at that time witness was his agent in collecting rents, &c., and had funds collected with which to pay said notes, and that during his residence in said city he had never known such custom. One J. testified that he had, for a number of years, been engaged in the banking business in different banks in said city, that quite often there was a variance among bankers as to the different banks whose currency was received on deposit, that sometimes one bank would receive the notes of certain banks which the others would not, and that at such times the term currency would not represent the same thing in all the banks, and that he did not know of any such custom.

Without examining now, the correctness of the instruction asked, in all its parts, we think there are two grounds upon which its refusal may be justified. In the first place, from the testimony, the jury was bound to find for or against the existence of a custom, uniform, continuous and uninterrupted in its character. Witnesses for plaintiffs testified that, there was a custom as claimed — those for defendant that there was not. What was said by witnesses about defendant’s notes being payable at a particular bank, and a want of agreement among the banks in receiving currency, was of no practical moment, and could have no practical bearing upon the question involved. If plaintiffs’ witnesses were credited, there was such a custom — if defendants, there was not.

But the more conclusive ground is, that this instruction had already been given in effect. Thus the court had instructed that the “ question to be determined was, whether there existed, in the city of Burlington, at the date of the note sued on, some custom among merchants, Jbankers and business men generally, by which the note in question was ¡considered negotiable.” “That to constitute a custom which will make the note negotiable, the jury must find that it was uniform, and existed for such a period as to be generally understood by merchants, bankers and business men in the city, (and) to have been acted upon by them.” “ At common law, and by the laws of this state, the note is not negotiable. The plaintiff has pleaded a custom, making the note negotiable. If the jury find there was a custom of such a character as set forth in the instructions, then they will find for plaintiffs the full amount of the note. But if they find there is no such custom, they will .look to see if defendant is entitled to any set-off or cross-claim.”

The main question in this class of cases is, in what sense did both parties use the language found in the contract, and how did each have reason to believe that the other understood it. They are presumed to have intended that it should have its ordinary and received signification, or, the meaning which the law attached to it. Custom may j be used, however, to affect the construction of a contract, or to “ substitute in the particular instance a rule resulting | from the usage, in place of that which the law, not the contract of the parties, would prescribe.” It is hardly correct to say that a contract (express) is controlled by a custom, but that it may be affected by it is too well settled to now admit of doubt. Mr. Parsons says, and truly, that the word embraces very many degrees of the same meaning. One extreme is that ancient, universal and well established custom, which is in fact, law. The other is a manner of doing a particular thing in a small neighborhood, or by a small class of men, for a few years. Whatever it is, if it falls within the reason of the rule which makes it a part of the contract, it amounts to a custom. And if it is so far N established, and so far known to the parties, as that it must be supposed that they contracted in reference to it, it comes within the reason of the rule. This custom may be generalN or local. If general, then a presumption of knowledge on the part of the contracting parties arises. If local, the knowledge of the parties must be proved, before it can avail to affect the contract. If established, the length of its duration is not very material. The characteristics of a"^\ good custom are said to be that it shall be established — uni- I form, general 'and known to the parties. But, as before I suggested, the degree in which all these should attach must \ depend, in each case, upon its peculiar circumstances. (2 Pars. Cont., 53, 54; Smith v. Wright, 1 Caines, 43; Martin v. Delaware Insurance Company, 2 Wash. C. C., 254; Dorchester Bank v. New England Bank, 1 Cush., 177; Stevens v. Reeves, 9 Pick., 198.)

In this case, the court told the jury that the custom to be good must have been uniform, and existed for such a length of time as to be generally understood by merchants, &c., and to have been acted upon by them. Under the circumstances disclosed, we think this stated the rule with sufficient accuracy, and obviated the necessity of giving that asked.

We do not think the objection that the replication did not state that this custom was known to defendant, can be taken advantage of, after verdict. The defect is not of such a substantial or material character as can avail the party on a motion in arrest, or for a new trial.

It is also claimed that the statutes of this state give a construction to this contract, and that custom cannot change or modify such construction. And in this connection it is suggested, (not, it is true, with much apparent confidence), that by the constitution all laws are to be uniform, and that, as by statute, a note could not be negotiable in one city and not so in another, neither should a custom be tolerated which may result in the same thing. It must be remembered, however, that we have no statute prohibiting such custom. A custom in a particular locality, when not in violation of law, becomes a law to parties contracting with a knowledge of it. The same general rule as to what makes custom, and its application in the construction of contracts, obtains uniformly over the state. It might as well be claimed that all parties must make the same kind of contracts, as that they may not contract in reference to different customs.

Affirmed.