Court Opinion

ID: 6690475
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:37:16.115607+00
Date Added: 2024-06-11T16:01:05.806828
License: Public Domain

POLLEY, J.
This case is before the court on rehearing. The former opinion was filed on the 31st day of August, 1921, and will be found reported in 184 N. W. at page 265.
The second proposition considered by the court on the former hearing — relating to commercial paper — was regarded as of so much importance to the bar arid the commercial interests of the *276state that several law firms asked' and were granted permission to appear as amici curiae, and take part in presenting the case at the rehearing. Pursuant to such permission the firms of French, Orvis & French qnd Caldwell & Caldwell, each filed a printed brief, and took part in the oral argument on behalf of the appellant, while Mr. Alan Bogue, of Bogue & Bogue, filed a printed brief and took part in the oral argument on 'behalf of the respondent.
[i] Counsel on behalf of respondent very earnestly contend that this court is not only in error, but out of harmony with the weight of authority in our construction of section 1756, Rev. Code (section 52, Un. Neg. Inst. Act). The adjudicated cases touching upon this question have been collected and presented to the court. So far as available, we have examined these cases. While we agree with the result reached in a great many of the cases cited by appellant, we think the result should have been reached by the application of the doctrine of estoppel rather than by the construction put upon section 1756.
Our attention has been called to the recent case of Merchants’ Bank v. Smith, 59 Mont. 280, 196 Pac. 523, 15 A. L. R. 430. Appended to this case in 15 A. L. R. is a very complete and comprehensive note. All the cases on the subject are collected and reviewed, and, after reviewing such, the annotator reaches this conclusion:
“It thus appears that opinion is quite evenly divided on the question under annotation. A logical construction of the Negotiable Instruments Act supports the conclusion reached by those courts which hold that the payee in whose hands the instrument had its inception cannot be a holder in due course under the Act. * * * Throughout the act a holder in due course is treated as one to whom the instrument has been negotiated by one in whose hands it was an obligation. Vander Ploeg v. Van Zuuk (1907) 135 Iowa, 350, 13 L. R. A. (N. S.) 490, 124 Am. St. Rep. 275, 112 N. W. 807; Builders’ Lime & Cement Co. v. Weimer (1915) 170 Iowa, 444, 151 N. W. 100, Ann. Cas. 1917C, 1174; Southern Nat. Life Realty Corp. v. People’s Bank (1917) 178 Ky. 80, 198 S. W. 543; St. Charles Sav. Bank v. Edwards (1912) 243 Mo. 553, 147 S. W. 978; Bank of Gresham v. Walch (1915) 76 Or. 272, 147 Pac. 534; Britton Mill. Co. v. Williams (1921, S. D.) *277184 N. W. 265; Lewis v. Clay (1897) 67 L. J. Q. B. N. S. (Eng.) 224, 77 L. T. N. S. 653, 14 Times L. R. 149, 46 Week. Rep. 319; Herdman v. Wheeler, [1902] 1 K. B. (Eng.) 361, 5 B. R. C. 651, 71 L. J. K. B. N. S. 270, 50 Week. Rep. 300, 86 L. T. N. S. 48, 18 Times, R. R. 190.”
And it seems to us that, without eliminating the fourth clause of section 1756, no other conclusion can be reached.
We have before us the case of Bank of Commerce v. Randell, 186 N. W. 70, just decided by the Supreme Court of Nebraska. In that case the court holds that a payee of a promissory note may be a holder in due course, but it reaches this conclusion by changing the wording of the first sentence of section 175Ó, 'Rev. Code 1919 (section 5370, Rev. !St. Neb. 1913), which reads as follows:
“A holder in due course is a holder who has taken the instrument under the following conditions”
■ — so as to make it read as follows:
“A holder in due course is a payee or indorsee of a bill or note, ‘who is in possession of it, or the bearer thereof,’ who has taken the'instrument under the following conditions:”
This is reading into the law something that the Legislature did not put there, and materially changes the meaning of the sentence. This we do not feel called upon, or at liberty, to do. The meaning of the section is easily ascertainable, and interpolation or elimination is wholly unnecessary, and, in our opinion, not permissible.
[2] Counsel for appellants strenuously contend that their position is warranted by that portion of section 1734, R. C. 1919 (section 30, Un. Neg. Inst. Act), which reads as follows:
“An instrument is negotiated1 when it is transferred from one person to another in such manner as to constitute the transferee the holder.”
This claim is based upon the theory that transfer as used in this section is synonymous with delivery or “execute and deliver.” This section will bear no such construction. It must be borne in mind that such words as “execute,” “transfer,” “negotiate,” and others as they are used in the Negotiable Instruments Act, are technical terms—highly technical—and are used in the Act in their technical sense. While the word “transfer” is broad enough to comprehend any physical movement of an object from one place to an*278other or from the hands of one person to the hands of another person, it has no such meaning in the Negotiable Instruments Act. “Transfer,” as used in the act takes place after an instrument has become an obligation, and it never becomes an obligation until after it has passed beyond the control of the maker. It can be “transferred” or “negotiated” within the meaning of the statute only by a person in whose hands it is an obligation. Upon this question we are satisfied with the conclusion reached in our former opinion.
[3] Upon further consideration, we believe we were in error in holding that the case should be reversed because not submitted to the jury. The allegations in the answer setting up the alleged fraud are not in any wise denied by the plaintiff. These allegations were fully sustained by the evidence of the defendant, and corrobated by another witness who was present when the alleged fraudulent representations were made. It is true the corroborating witness was the father of defendant. But in one respect at least defendant was corroborated by written evidence. Defendant testified that when he subscribed for the stock Bucklin promised 10 issue the stock immediately and he gave to defendant a written receipt, which stated that the stock would be issued immediately, but it was shown at the trial that the stock was not issued for some 16 months thereafter. Another representation of a then existing fact that was made by Bucklin, and one that was relied upon by defendant was the statement that arrangements had been made to build a railroad from Burch to Britton. This statement was proven to be false by a member of the board of Directors of plaintiff company, who testified that he knew nothing of any such arrangement ever having been made.
Bucklin was not put upon the stand to deny any of the statements or representations attributed to him, nor was it shown that his testimony could not be procured. That left only the question whether the said false representations were such as would constitute legal fraud, and this is the position taken by appellant at the trial. In its assignment of error appellant says:
“There was no evidence showing that any representation of fact made by the agent Bucklin was false, and the promises and the statements claimed by defendant to have been made by Buck-lin, and which he relied upon, and which were false, were promis*279sory statements as to future happenings, and could not be made the basis of fraud or deceit.”
As further showing this was the position of the appellant at the trial, appellant contends in this court that, upon the evidence as it stood at the time defendant moved for a directed verdict, plaintiff was entitled to a directed verdict in its favor. If appellant was entitled to a directed verdict, -it is ¡because there was no question of fact to be decided and, if there was no issue of fact to be determined, there was nothing for the court to submit to the jury. Under these circumstances the court was warranted in directing a verdict for defendant.
The judgment and order appealed from are affirmed.
ANDERSON, J., not sitting.