Acme Coal Co. v. Northrup National Bank

Beard, Justice. This is an action on a promissory note brought by the defendant in error against the plaintiffs in error. Trial was had to the court and judgment rendered in favor of plaintiff below, and defendants bring error. The note was given by the Acme Coal Co., and indorsed by Ora Darnall and A. K. Craig, and payable to the order of the United States Iron Works Co., and by said company indorsed to the Bank. The note bears date November 9, 1912, is for $1,589.15, due ninety days after date with interest from date. A blank printed form was ttsed and the blanks filled in on a typewriter, and in the blank space for the rate of interest after the printed word “at”, the typewritten figure and words are: “7 per cent from date.” There is a circle drawn around the figure 7 with a pen and ink .and above it is the figure 8, also made with pen and ink. The defendants denied the execution of the note, but averred that if they did execute it it was given in renewal of a former note, dated August 3, 1912, which was given for a part of the purchase price of certain pit cars for use in the Coal Company’s mines; that said cars were purchased from the Iron Works Co. by the Coal Co. under an agreement that they were to be of the same kind and in all substantial respects like cars formerly purchased [72] by the Coal Co. from the Iron Works Co.; alleged certain defects in the cars which could - not be discovered by inspection, but which the Iron Works Co. knew, or should have known, and that the cars were practically worthless. That the cars were delivered during the year 1911 and forepart of the year 1912. That the plaintiff knew, or should have known, that said cars were defective and useless and worthless to the Coal Co., and if it purchased the note in suit it did not do so in good faith, but for the purpose of defeating the Coal Company’s claim for damages against the Iron Works Co. The defendants contend that the note is not a negotiable instrument by reason of an uncertainty in the rate of interest it bears appearing on its face, there being a conflict between the rate as inserted in the printed blank by the typewriter and that with pen and ink. The rule of construction provided by our statute (it being what is known as the Uniform Negotiable Instrument Act) is, where there is a conflict between the written and printed provisions of the instrument, the written provisions prevail. (Sub-division 4, Section 3175, Comp. Stat. 1910.) Had the figure “7” been printed in the blank as it was printed on a printing press, and the figure “8” written with pen and ink, the rule of the statute would unquestionably apply. The question here is, is that portion of this note which is typewritten to be considered as printed, or as written? When we consider what we conceive to be the reason for the rule, as laid down in the statute, and the connection in which the words “written” and “printed” are there used, we think the question is not difficult of solution. The printed form, or blank, is used for convenience and is prepared in advance of the final agreement between the parties; and when a conflicting provision is afterward inserted therein in writing, the natural and reasonable presumption is that the later and written provision expresses the true intent of the parties. The word “writing” is defined in the Century Dictionary, “Specifically, as distinguished from printing, stamping, incision, etc., the act or [73] art of tracing graphic signs by hand on paper, parchment, or any other material, with a pen and ink, style, pencil, or other instrument.” And the word “print” is defined by the same authority, “Specifically, to stamp by direct pressure, as from the face of types, plates, or blocks covered with ink or pigments; impress with transferred characters or delineations by the exercise of force, as with a press or some other mechanical agency.” And “typewriting” is defined, “The process of printing, letter by letter, by the use of a typewriter.” When, as in this case, it clearly appears from an inspection of the instrument that the blank form used was “printed,” using that term in its common and ordinary sense, and the blanks therein are filled in on a typewriter, and it then further appears that there is a conflict between a typewritten provision and one afterward made with pen and ink, we think the typewritten portion of the instrument must be considered as “printed” within the meaning of the statute. We do not wish, however, to be understod as holding that in all cases and under all circumstances typewriting is to be construed as printing; but that in the circumstances here presented it is to be so construed and that the rule adopted by the statute applies, and that the rate of interest in the note is not uncertain, and that it is a negotiable instrument. Nor have we overlooked the further provisions.of the statute (Section 3349) with reference to the construction of words, viz: “In this chapter, unless the context otherwise requires: * * * ‘written includes printed and ‘writing’ includes print.” To so construe those words in the case before us would render the rule prescribed by Section 3175 meaningless and of no force; and in our opinion the case comes within the exception, “unless the context otherwise requires.” The defendants further alleged in their amended answer (upon which the case was tried) that they relied upon the agreement and representations of the Iron Works Co. that the cars were like the cars purchased prior to 1911 and could be used for the purpose for which they were intended, and it was by reason of said agreement and represen [74] tations that the Coal Co. was induced to buy, and did buy, said cars. As- to those allegations counsel for plaintiffs in error say in their brief: “By failure to deny, the reply of defendant in error admits the ninth paragraph of the answer.” (That being the paragraph containing said allegations.) If a reply was necessary, the reply to the original answer denied the new matters set up in the answer; and we find in the record a written stipulation, signed by the attorneys for the respective parties and filed in the court below, that the reply filed to the original answer should stand as the reply to the amended- answer. That point is not, therefore, well taken. The note being negotiable, the statute provides (Sec. 3217) : “Every holder is deemed prima facie to be holder in due course; but when it is shown .that the title of any person who has negotiated the Instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as a holder in due course.” And by Section 32x3 id.: “The title of a person who negotiates an instrument is defective within the meaning of this chapter when he obtained the instrument or any signature thereto, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to fraud.” Assuming the allegations of the amended answer to be sufficient to present the issue of defective title in the Coal Co. on the ground of false representations' and fraud in procuring the note, the evidence, including certain testimony stricken "out by the court on plaintiff’s motion, is insufficient to establish those allegations. The most that can be said of it is that it tended to prove a breach of contract. It was to the effect that the Iron Works Co. agreed to furnish cars like those previously purchased by the Coal Co. from it, but failed to do so. There is an entire lack of any evidence that the plaintiff had, prior to or at the time it purchased the note, any notice or knowledge of any defect or infirmity in the note, or knowledge of such facts that in its ac [75] tion in taking the instrument amounted to bad faith; which notice or knowledge was necessary to let in the defense of failure of consideration, breach of contract, or breach of implied warranty. (Ireland v. Shore (Kan.) 137 Pac. 926, 91 Kan. 326.) The finding of the District Court is general, but it must necessarily have held the note to be negotiable; and found that the defendants failed to establish fraud in the inception of the note, or notice of any infirmity or defect therein, or bad faith on the part of plaintiff as holder of the note. We think the record sustains the judgment and it, accordingly, is affirmed. Affirmed. Potter, C. J., and Scott, J., concur.