Court Opinion

ID: 6736024
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:18:30.324868+00
Date Added: 2024-06-11T16:01:46.880194
License: Public Domain

Morgan, C. J.
(dissenting). I am unable to concur in the conclusion reached by my associates in this case. \ My reason for reaching an opposite conclusion may be briefly stated.
The statute in express terms requires that the time of payment must be definitely stated in the note or that it can be definitely determined therefrom when it becomes payable, or it will be rendered non-negotiable. From the face of the note, it seems to me conclusive that it does not show when the note may become due and payable in view of the fact also stated therein that an extension may become operative and binding. It does not seem to me to be a sound conclusion to say that the note states a fixed day of payment when it also states that the day stated may not represent the date of payment if the stipulation as to an extension that follows is put into effect. The note cannot be said to be a. demand note, as by its very terms it is not such. It fixes day of payment, subject to extensions. So far as having no fixed day of payment is concerned, the time is rendered as uncertain by reason of possible extension^ as it would be if it provided for extensions indefinitely, and is therefore fairly within the principles of the Iowa cases cited in the opinion. In Bank v. Gunter, 67 Kan. 227, 72 Pac. 842, the note contained this stipulation: “The makers and endorsers hereby severally * * * agree to all extensions * * * before or after maturity without prejudice to the holder,” and in reference .to the effect thereof upon the negotiability of the note, the court said: “In the note in question, payment is first fixed at 182 days after the date, but as will be observed, a later provision makes the time indefinite by stipulating that it may be changed and extended either before or after maturity. If the time is to remain fixed until maturity, when another time is to be fixed by the parties, or if payment is made to depend upon events which necessarily must occur, and the time of payment is ultimately certain, other considerations would arise; but here payment is not ultimately certain, for the time stated in the paper is subject to change at any time at the volition of some of the parties to the action.”
*333In Coffin v. Spencer (C. C.) 39 Fed. 262, the court said in reference to a similar stipulation: “Every successive taker of the paper is, of course, bound to take notice of the stipulation, and, instead of looking only to the face of the instrument for the time of its maturity, as in case of commercial paper he must, is put upon inquiry whether or not any agreement for a renewal or extension of time has been made by his proposed assignor or by any previous holder.”
In Oyler v. McMurray, 7 Ind. App. 645, 34 N. E. 1004, the court said in speaking of a like stipulation: “The holder was not bound by the stipulation in either case to extend the time of payment. The material and controlling fact is that the holder had the -option, at any time before as well as after the time of payment stated in the note, to extend to the drawers and indorsers, or either of them, the time of payment.”
The following authorities specifically hold that stipulations like the one contained in the note in suit render the note non-negotiable: 7 Cyc. 600, and cases cited; Daniel on Neg. Inst. (5th Ed.) p. 49; Eaton & Gilbert on Commercial Paper, p. 220; Smith v. Van Blarcom, 45 Mich. 371, 8 N. W. 90; Woodbury v. Roberts, 59 Iowa, 348, 13 N. W. 312, 44 Am. St. Rep. 685; Hodge v. Farmers’ Bank of Frankfort, 7 Ind. App. 94, 34 N. E. 123; Oyler v. McMurray, 7 Ind. App;. 645, 34 N. E. 1004; Glidden v. Henry, 104 Ind. 278, 1 N. E. 369, 54 Am. St. Rep. 316; Rosenthal v. Rambo, 28 Ind. App. 265, 62 N. E. 637; Id., 165 Ind. 584, 76 N. E. 404, 3 L. R. A. (N. S.) 678; Evans v. Odem, 30 Ind. App. 207, 65 N. E. 755; Second National Bank v. Wheeler, 75 Mich. 546, 42 N. W. 963; Lamb v. Storey, 45 Mich. 488, 8 N. W. 87; Citizens’ Nat. Bank v. Piollet, 126 Pa. St. 194, 17 Atl. 603, 4 L. R. A. 190, 12 Am. St. Rep. 860.
On principal and authority, the note should be held non-negotiable.