Union Bank v. Spies

151 Iowa 178 | Iowa | 1911

Sherwin, C. J.

One Hugh Blackman was a soliciting agent of the Royal Mutual Life Insurance Company of Des Moines, Iowa. On the 13th of December, 1906, the defendant signed á note for $268, payable to the Royal Mutual Life Insurance Company, or Hugh Blackman, and due in thirty days, and delivered the same to Mr. Black-man. On the 21st of December the plaintiff bought the note of Blackman, who duly indorsed it and delivered it to the bank. The note contained the following provision: “In case of the death of the insured before this note falls due, the above amount with interest shall be deducted from the amount of the policy.” The defendant pleaded that the note was procured by the fraud of Blackman, that Blackman had fraudulently changed answers made by the defendant in his written application for the policy in question, and that Blackman had orally agreed that the note would be returned to the defendant if he was not satisfied with the policy.

i. Negotiable instruments: indorsement. The appellant’s most insistent claim -is that the plaintiff failed to prove that it was the owner of the note in suit, and in support of this claim he cites and relies on Code Supplement, section 3060a41, and authorities to which we shall hereinafter refer. Section 3060a41 provides: “That whqre an instrument is payable to the order of two or more payees or indorsers who are not partners, all must indorse unless the one indorsing has authority to indorse for the others.” It is manifest that the note before us does not fall within the terms of the statute, for the reason that it was not made payable to two or more payees or to their order. It was made payable to either one of two payees, and under Code Supp. section 3060a8, its indorsement by either one of the payees named therein would pass title. Under the last-named provision of the statute a note made payable to one or some of several payees is payable to the order. of any of the payees named, and is negotiáble. Selover’s Negotiable Instruments Law, section 54; Norton on Bills and Notes, page 60; Crawford, Neg. Insts. section 27; Bank v. Lightner, 74 Kan. 736 (88 Pac. 59). In McNamee v. Carpenter, 56 Iowa, 276, and Gordon v. Anderson, 83 Iowa, 224, relied upon by tbe appellant, tbe notes were payable to several jointly, and hence tbe cases are not authority against tbe rule here announced. Moreover, tbe evidence in this ease shows tbe absolute ownership of tbe note to be in -the plaintiff without ány question.

a. Same: negotiability. Tbe appellant' further contends, or, at least, we so understand bis argument, that tbe provision in tbe note for a deduction of tbe amount due thereon from tbe policy, should the maker die before tbe note became ma(je ^ nonnegotiable, and bence subject to bis defenses. But his position can not be sustained without overriding tbe statute. A negotiable instrument is therein defined as follows, so far as material here: It “must contain an unconditional promise or order to pay a sum certain in money.” Code Supp. 3060al.

Does tbe stipulation in tbe note, to which we have referred, render it nonnegotiable ? We are of tbe opinion that tbe question is answered in tbe negative by two provisions of tbe statute. Section 3060a3 says that “a promise is unconditional, 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 tbe amount, or (2) a statement of tbe transaction which gives rise to tbe instrument.” Again, section 3060a5 provides that certain things therein enumerated shall not affect tbe negotiability of an instrument, and says that a provision authorizing tbe sale of collateral security in case tbe instrument is not paid at maturity, or authorizing a confession of judgment, or giving tbe bolder an election to require something to be done in lieu of payment of money, shall not affect tbe negotiability. We think the provision in this note is clearly covered by section 3060a3, for tbe reason that it does no more than to provide that, in the event of the death of tbe maker before it becomes due, tbe amount due thereon may be taken from the indebtedness of the insurance company to him, and thus indicating a particular fund out of which the holder is to reimburse himself. We also think the spirit and intent of section 3060a5 clearly applies to the provision under consideration. Our conclusion is that the note 'was negotiable. While other questions are argued, we do not consider them in any way controlling.

. The defendant’s principal contentions are that the title to the note did not pass to the bank by the indorsement of Blackman, and that the note was not negotiable, because of its terms. As both of these propositions are untenable, it is apparent that the court rightly directed a verdict for the plaintiff. Affirmed.