Iron City N. Bank v. McCord , 139 Pa. 52 ( 1891 )

OPINION,

Mr. Justice Sterrett:

This action of assumpsit was brought by the Iron City National Bank, indorsee and holder, against Mrs. McCord, drawer, of an order in the following form:

It appears that W. J. Quinn, the payee and indorser of the order, obtained^ the same from the defendant, in payment of the balance claimed to be due him as contractor for the erection of buildings on her separate estate, by assuring her that all claims of material-men and sub-contractors were fully paid, and no liens could be filed against the buildings. That representation proved to be untrue, and liens amounting, with costs, to $444.90 were subsequently filed. In view of the facts, it cannot be doubted that, as between Quinn and Mrs. McCord, the latter had a valid defence to the payment of the order, at least to the extent of the liens, and, unless the order is negotiable, in the sense of the law-merchant, the plaintiff, as Quinn’s indorsee, is in no better position. The learned president of the Common Pleas must have been of that opinion, because he refused to charge “ that, under all the evidence, the verdict of the jury must be for the plaintiff,” and instructed them that, if they believed the evidence, the defendant had a valid defence to the order, in the hands of the bank, to the extent of the liens and costs thereon. The verdict in favor of the plaintiff for -$481.10 was evidently the result of that instruction, as applied to the facts found by the jury. The main question, therefore, is whether, iu the legal sense, the order in suit is negotiable. If it is not, there was no error in refusing to charge as requested by plaintiff, and in affirming defendant’s second point.

While the direction is to “ pay to W. J. Quinn or order, nine hundred dollars in nine weeks from date, or Feb. 1, 1888,” there is enough on the face of the order to show that, in the commercial sense, it was not a regular check, and was not intended to operate as such. It sufficiently appears from the memoranda on its face that it was drawn on a specially deposited fund held by the bank subject to certain rules and regulations, in force between it a,nd the depositor, requiring certain things to be done before payment could be required, viz., previous notice of depositor’s intention to draw upon the fund, return of the notice ticket with the order to pay, and presentation of the deposit-book at the bank, so that the payment might be entered thereon.

Section 8 of the by-laws given in evidence, requires : “ When money is to be drawn out, the book must be brought to the office to have payment entered thereon. Depositors must take out the money themselves, except, in case of sickness or other infirmity, or absence from the city, it may be paid to their order, properly witnessed, accompanied by the book. Blank orders will be furnished at the office of the corporation.” One of those blanks appears to have been used for the order, sued on in this case, substituting the word “order” for “bearer.” According to the testimony of plaintiff’s cashier, his attention was called to the prerequisites to payment noted on the face of the order, and it must therefore be presumed that he knew the order “ to pay in nine weeks,” etc., was restricted or qualified by the .provisions contained in the by-law, requiring notice of intention to draw, return of notice ticket with the order, and, at the same time, presentation of the deposit-book. The effect of these requirements was to restrain or qualify the otherwise general operation of the order.

It is well settled that anything written or printed on a negotiable instrument prior to its issuance by the maker, relating to the subject matter of the instrument, and tending to restrain or qualify it, must be regarded as part of the contract intended to be evidenced thereby : Costello v. Crowell, 127 Mass. 293, and cases there cited; Henry v. Colman, 5 Vt. 403; Fletcher v. Blodgett, 16 Vt. 26; Benedict v. Cowden, 49 N. Y. 396, 400; Johnson v. Heagan, 23 Me. 329. In Costello v. Crowell, supra, the words, “ given as collateral security with agreement,” written on the margin of a promissorjr note, were held to destroy its negotiability. Speaking for the court in that case, Mr. Justice Loud said: “ It is settled, by an uninterrupted series of decisions, that any language put upon any portion of the face or back of a promissory note by the maker, before delivery, is part of the contract; and, if by any such language the payment of it is not necessarity to be made, at all events and of the full sum, in lawful money, and at a time certain to arrive, and subject to no contingency, the note is not negotiable.” Our own cases, among which are Overton v. Tyler, 3 Pa. 346; Sweeney v. Thickstun, 77 Pa. 131; Woods v. North, 84 Pa. 407; Citizens N. Bank v. Piollet, 126 Pa. 194, in effect recognize the same principle. In Jones v. Fales, 4 Mass. 245, the words, “ Foreign bills,” written at the foot of a promissory note were held to be part of the note itself, and rendered it non-negotiable. The same effect was given to the words, “ In facilities,” shown to mean a class of banknotes, then worth less than par: Springfield Bank v. Merrick, 14 Mass. 322.

The principle recognized in these and other cases is undoubtedly correct, in that it is necessary to preserve the integrity of negotiable instruments. Applying it to the instrument in suit, it is, in substance, merely an order on the Dollar Savings Bank to pay W. J. Quinn, or order, nine hundred dollars in nine weeks from date, or February 1,1888, provided he or his transferee present to the bank, with tbe order, tbe notice ticket, and also produce at and before tbe time of payment tbe drawer’s deposit-book. As already remarked, these are undoubtedly prerequisites wbicb restrain or qualify the generality of tbe order to pay as contained in the body of tbe instrument. They are also prerequisites with which it may be difficult, if not sometimes impossible, for the payee, transferee, or bolder of such an order to comply. As was said in Woods v. North, supra : “ It is a necessary quality of negotiable paper that it should be simple, certain, unconditional, not subject to any contingency. It would be a mere affectation of learning to cite the elementary treatises, and the decided cases which have established this principle. It is very important to the commercial community that it should be maintained in all its rigor.” If this is not done, such paper would soon cease to be a “ courier without luggage,”^* and become loaded down with conditions, contingencies, and all sorts of impedimenta, so that its usefulness would be greatly impaired, if not entirely destroyed.

Technically, the plaintiff was not entitled to recover; but, by treating the record as amended, a verdict was rendered and judgment entered thereon for all that could have been recovered if Quinn had been made the legal plaintiff. Substantial justice has thus been done, and there is no reason why the judgment should not be

Affirmed.

* Overton v. Tyler, 3 Pa. 346. It is said that, opposite the sentence, “ A negotiable bill or note is a courier without luggage,” in the original opinion, Mr. Chief Justice Gibson wrote in the margin: “The printer will please print this, luggage,, and not baggage, according to a barbarous American usage.” See Mr. Owen Wister, in 3 Green Bag 75:—Rep.