Opinion ID: 1704209
Heading Depth: 1
Heading Rank: 2

Heading: Failure to Specify Time of Payment.

Text: As a corollary to his argument that the pledge is nonobligatory, defendant asserts that the failure to specify the time of payment renders the instrument nonobligatory. He urges this result is compelled by our decision in In re Estate of Philpott, 169 Iowa 555, 557-58, 151 N.W. 825, 826-27 (1915). In that case, the payment was to be made on or before four after date. The modifier four had been inserted in a blank space in the instrument, but no unit of time was inserted to give the modifier meaning. The issue in Philpott was whether this omission destroyed negotiability and therefore permitted certain defenses to be raised against a holder in due course. The court held that such omission did destroy negotiability but recognized the possibility that the note might have been enforced between the original parties. The Philpott decision adds little support to defendant's claim in the present case. Plaintiff asserts that the issue is controlled by Iowa Code section 554.3108 (1981) which provides, in part: instruments payable on demand include those ... in which no time for payment is stated. It notes that a treatise writer has stated: When a note is completely executed except that the time for payment and the lines indicating payment by installments are left blank the full amount of the note is payable on demand, as opposed to the contention that no amount is payable. Thus, it has been held that where the maker signed a printed form of a note and did not fill in any schedule of payments in the blanks provided for that purpose but merely promised to pay the sum of $3,400, the note was for that amount payable on demand on the theory that an instrument which contains no time as to payment is payable on demand. 2 Anderson, Uniform Commercial Code, § 3-108:5 at 646 (2d ed. 1971). The defendant contends that section 554.3108 has no applicability to the present transaction because the subscription agreement is not a negotiable instrument. We note in this regard that the application of Article 3 of the Uniform Commercial Code extends to some instruments which are not negotiable. See Iowa Code section 554.3805; Helstad, Scope of Article 3 of the Uniform Commercial Code, 1964 Wis.L.Rev. 355, 366-67. We need not decide whether Article 3 of the Uniform Commercial Code is directly applicable to the present transaction. It appears that section 554.3108 only states that which has been the common law of this state since Green v. Drebilbis, 1 Greene 552 (1848) where the court stated: the principle is recognized, that if no time of payment is mentioned in a note, it operates like a check on a banker, as payable on demand. No reason has been advanced by the defendant for applying a different rule of law in adjudicating its obligations in the present case. We conclude that the trial court did not misapply the law in adjudicating defendant's liability. Moreover, the objection lodged by defendant to Instruction No. 10, even if valid, would not constitute reversible error. The jury was only required to answer five special interrogatories, none of which related to whether or not the note was payable on demand. Even if we were to assume that the time of payment could not be decided against defendant as a matter of law, neither could it be decided in his favor as a matter of law. Any issue of fact not submitted to the jury was left for the trial court to resolve under Iowa Rule of Civil Procedure 205. That rule provides, in part: If the submission omits any issue of fact, any party not demanding submission of such issue before the jury retires waives jury trial thereof, and the court may find upon it; failing which, it shall be deemed found in accord with the judgment on the special verdict. The judgment entered on the special verdict in the present case is consistent with a finding that the agreement was payable on demand. Certainly this was a permissible finding on the record. We have considered all issues presented and find no basis for reversal. AFFIRMED.