Brown v. Thomas

Sims, J.,

after making the foregoing statement, delivered the opinion of the court.

Upon the assignment of error in this case only two questions are presented for our determination, namely:

1. Did the plaintiff have the authority to complete the note sued on by filling up the blanks therein as he did?

2. Were the blanks in the note sued on filled up “within a reasonable time” ?

The rule at common law was that, if, at the time an incomplete instrument was negotiated to a holder for value, the latter was without notice of any limitation upon the authority to complete the instrument, other than was given by the incomplete instrument itself, the person who signed the incomplete instrument, either as maker or indorser, and delivered it, in order that it might be converted into a negotiable instrument, was not allowed thereafter to defend an action against him on the instrument, upon the ground that the blanks were not filled up in accordance with the authority he may have given to the person into whose hands, he delivered the incomplete instrument. That is to say, in such case, the authority in any holder for value of such an instrument, to complete it, was absolute — could not be rebutted by proof for defendant on the trial that the instrument was not filled up strictly in accordance with such authority as the defendant may have given on the subject dehors the instrument itself and unknown to the holder for value at the time he negotiated the instrument. Russell v. Langstaff, (Opinion by Lord Mansfield), 2 Douglas 514; Violett v. Patton, (Opinion by Chief Justice Marshall), 5 Cranch (U. S.) 142, 3 L. Ed. 61; Chestnut v. Chestnut, 164 Va. 541, 52 S. E. 348, 2 L. R. A. (N. S.) 879, 7 Ann. Cas. 802; Frank v. Lilienfeld, &c., 33 Grat. (74 Va.) 377-83; Orrick v. Colston, 7 Grat. (48 Va.) 189; Jordan v. Neilson, 2 Wash. (Va.) 164; Douglas v. Scott & Foy, 8 Leigh (35 Va.) 43; Boyd v. McCann, 10 Md. 118; Eliott v. Chestnut, 30 Md. 562 ;Redlich v. Doll, 54 N. Y. 234, 13 Am:. Rep. 573; 1 Daniel on Neg. Inst. (2nd ed.), pp. 121-2.

It is true that at common law before an incomplete instrument was negotiated to a holder for value — before the consideration for the note passed — the authority to complete it was prima facie only. But after this occurrence in its history, the authority to complete the note became, at common law, absolute.

The statute in Virginia, (above quoted) makes the authority under consideration prima facie only, after, as well as before, the occurrence next above referred to. It allows, at the trial, in a case such as first above stated, the defense that the blanks were not filled up in accordance with the authority given to the person into whose hands the incomplete instrument was delivered. This was a very important change in the common law on this subject and very far reaching in its effect, but it does not affect the case before us. In the instant case, the defendant — the person who signed and delivered the incomplete instrument, in order that it might be converted into a negotiable instrument — introduced no evidence, nor was there any in the case, to rebut the prima facie authority of the plaintiff to complete the instrument given by the statute. Hence in the instant case, such authority is the same in effect as if it had been absolute, as at common law.

Therefore,

The first question we have to determine must be answered in the affirmative; and our conclusion is that the plaintiff had at one time the authority to complete the note sued on as he did.

But counsel for defendant contend that the plaintiff lost the authority to complete the note sued on by his failure to do so within a reasonable time. This brings us to the remaining question we have to consider, namely:

2. Were the blanks in the notes sued on filled up “within a reasonable time”?

Both at common law (7 Cyc. p. 622) and by virtue of the express provisions of said statute in Virginia, the blanks in an incomplete negotiable instrument must be filled “within a reasonable time” in order that the person in the position of the defendant in the instant case may be held bound thereon.

It has been held that the burden of proof under the negotiable instrument law, is upon the plaintiff — the subsequent holder of the note for value — to show that the instrument was completed within a reasonable time. (Madden v. Gaston, 137 App. Div. 294, 121 N. Y. Supp. 952). It is unnecessary, however, for us to pass on such question in the case before us.

What is a reasonable time in such a case is usually a question for the jury (7 Cyc. p. 622). As when the facts are doubtful or disputed. (Hill v. Hobart, 16 Me. 164). But “when the facts are clearly established, or undisputed, or admitted, the reasonable time is a question of law.” {Idem.}

The demurrer to evidence in the instant case avoids any controversy as to the facts. When the facts thus ascertained are such that reasonable minds coiild draw but one conclusion therefrom, it is for the court to draw that conclusion as a matter of law. (Recker v. Southern R. Co., 115 Va. 201, 78 S. E. 580.)

Upon the facts of the case, ascertained upon the demurrer to evidence, the purpose for which the note sued on was delivered to the plaintiff was to secure and save him harmless from loss by reason of his becoming bound to pay any subsequent note he might endorse for W. A. Thomas, as well as the note he endorsed for him on October 10, 1913. The plaintiff in fact subsequently endorsed another such note, on July 10, 1915. W. A. Thomas died one month and nineteen days thereafter. It was not until his death that it could be determined that plaintiff might not be asked by him and consent to endorse other notes for him. The next day after such death, the blanks were filled up by plaintiff and the note completed. It could not have been completed before the death of W. A. Thomas, and have accomplished •the purpose for which it was delivered to the plaintiff. It is clear, therefore, that in the instant case, the note was completed within a reasonable time.

For the foregoing reasons we are of opinion that the trial court should have overruled the demurrer to evidence and entered! judgment for the plaintiff. The judgment complained of will therefore be reversed and such judgment will be entered by us as should have been entered by the court below.

Reversed.