Jones v. American Savings Bank & Trust Co. , 139 Wash. 598 ( 1926 )

While I concur in the conclusion reached by Judge Holcomb, I do so for a different reason than is stated in his opinion.

The provisions of the negotiable instruments act pertinent to the inquiry before us are found at §§ 3392, 3394 and 3395 of Rem. Comp. Stat. [P.C. §§ 4072, 4074, 4075], and read as follows:

"§ 3392. An instrument to be negotiable must conform to the following requirements:

"1. It must be in writing and signed by the maker or drawer;

"2. Must contain an unconditional promise or order to pay a sum certain in money;

"3. Must be payable on demand, or at a fixed or determinable future time;

"4. Must be payable to order or to bearer; and,

"5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty."

"§ 3394. An unqualified order or promise to pay is unconditional within the meaning of this act, 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 the amount; or

"2. A statement of the transaction which gives rise to the instrument.

"But an order or promise to pay only out of a particular fund is not unconditional."

"§ 3395. An instrument is payable at a determinable future time, within the meaning of this act, which is expressed to be payable —

"1. At a fixed period after date or sight; or

"2. On or before a fixed or determinable future time specified therein; or

"3. On or at a fixed period after the occurrence of a specified event, which is certain to happen, though the time of happening be uncertain.

"An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect."

The instrument before us, the negotiability of which is in question, contains a promise to pay the sum of five hundred dollars "as authorized by Resolution No. 1123, as passed on the 6th day of June, 1922, . . . not . . . later than such time as will permit the levy of 12 annual consecutive tax levies after the date of the issuance hereof." This, it is at once apparent, is not a promise to pay on demand or at a fixed future time, and, if the promise is sufficiently definite to bring it within the terms of the statute, it is because it is payable at a "determinable future time." But I cannot think it is thus definite. To ascertain this we must look to the definition in § 3395, supra. Comparing the terms of the promise with that section, it is plain that the promise does not fall within the first nor the third of its subdivisions; the instrument is not "expressed to be payable at a fixed period after date or sight," nor "on or at a fixed period after the occurrence of a specified event which is certain to happen." Nor is it within the first of the conditions of subdivision 2 of that section; it is not "expressed to be payable . . . on or before a fixed . . . future time specified therein." Nor is it, in my opinion, within the second condition of this subdivision, the only one within which it can possibly fall. To come within this condition it must be "expressed to be payable on or before a . . . determinable future time specified therein," and I cannot conceive that a determinable future time of payment is expressed. It cannot be told from the face of the bond whether it is payable after one year or after twelve years, or within any intermediate time between these periods. We know from an examination of the proceedings leading up to the issuance of the bond that it is one of a number of such instruments, and is payable in its order as determined by number, but this is not expressed on the face of the bond, and to make it payable at a determinable future time it was necessary that it be so expressed.

It is not my opinion that we may look to the proceedings leading up to the issuance of the bond to determine its negotiability, but conceding that we may do so, an examination will show that the bond falls within the ban of Rem. Comp. Stat., § 3394, above quoted. The resolution referred to in the bond is not complete in itself, but refers to a prior resolution which it is necessary to consult to understand its meaning, and this prior resolution plainly declares that the bond is payable "only out of a particular fund;" namely, a fund created by assessment upon the property within a special improvement district.

On any theory, therefore, I am compelled to conclude that the bond is not negotiable.