Court Opinion

ID: 3433422
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:02:26.732293+00
Date Added: 2024-06-11T13:56:21.410901
License: Public Domain

I concur that the stipulation in the note in the instant case does not make the note nonnegotiable in character. It must be borne in mind that only the makers of the note bound themselves by the terms of the said stipulation, and further, that the makers could not affect the due date until after the due date had arrived. No person could become a holder in due course subsequently to the maturity of this note. The Negotiable Instruments Law not only determines the earmarks of a negotiable instrument, but also defines the conditions upon which a negotiable note shall be transferred in order that it shall possess the characteristic called "negotiability." Therefore, whatever might be done by or with the consent of the makers after due date could not affect negotiability.
The majority opinion cites, inter alia, Quinn v. Bane, 182 Iowa 843. I do not understand that this case is cited in this opinion to sustain a reversal of the instant cause; but whether or not, I am not in accord with the Quinn case, either in its conclusion or in the reasoning upon which the conclusion is based. It is contrary to the numerical weight of authority. My thought is that, if the payee of a note has obligated himself with the maker *Page 334 
to extend the time by a stipulation in the note, he has thereby made a contract with the maker, mutually binding, to extend the time upon demand of the maker. Such a stipulation clearly makes the note nonnegotiable, and this court, in effect, held this to be the true interpretation in Cedar Rapids Nat. Bank v. Weber,180 Iowa 966.
In the Weber case, supra, the stipulation in the note did constitute a contract between the makers and payee, and the payee by the stipulation or contract was obligated to extend the time. On this state of facts, the time of payment of the note was not certain, as it was not payable "at a fixed or determinable future time," and therefore not negotiable. Section 9461, Code of 1924.
The stipulation in the Quinn case, supra, was entirely different in essence and legal effect, since the makers only consented "that the time of payment may be extended, from time to time, without notice thereof." There was no obligation on the part of the payee or the holder, as in the Weber case, supra, to extend the time of payment.
The stipulation in the note in the case at bar does no violence to any provision of the Negotiable Instruments Act in relation to one of the essentials to make a note negotiable in the first instance, — to wit, a fixed and determinable time of payment.
I concur in the reversal.