Robertson v. Virginia National Bank

Sims, J., after making the foregoing statement, delivered the following opinion of the court. In the view we take of the case it will not be necessary for us to pass upon any of the questions raised by the assignments of error other than the following: 1. Did the court err in taking from the jury all consideration of the defense of the defendant, Robertson, that the note sued on was endorsed and delivered upon the express condition and understanding, assented to by the plaintiff bank, that it was not to become binding as an obligation of such defendant unless it was endorsed by I. Berglass—as was done by the giving of instructions I and II and the refusal of instruction F? The question must be answered in the affirmative. Under the pleadings in the case the plaintiff bank sought to recover upon the obligation of the endorsers upon the note, and not upon any implied obliga [183] tion upon them resulting from the receipt of the money by the defendant bank. No issue as to whether such an implied obligation existed was before the jury. Even if it had been, in view of the testimony of and for the defendant, Robertson, to the effect that he did not know that the money had been paid the defendant bank without the endorsement of the note by Berglass until after it was paid and the bank had been closed by the State authorities, the question of the existence of such implied obligation should have been submitted to the jury for determination under proper instructions, and should not have been decided by the court, as was done by instructions I and II. Therefore, confining our consideration of the question above stated to the issue on the subject made by the pleadings, we find, this: Section 5578 of the Code provides as follows: “Every contract on a negotiable instrument is ineompleted and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties and as regards a remote party other than a holder in due course the delivery in order to be effectual must be made either by or under the authority of the party making, drawing, accepting, or indorsing as the case may be, and in such case the delivery may be shown to have been conditional or for a special purpose only and not for the purpose of transferring the property in the instrument. But where the instrument is in the hands of a holder in due course a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed, and where the instrument is no longer in the possession of a party whose signature-appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved.” [184] The instrument, in the instant ease, was not in the hands of a holder in. due course, but in the hands of an immediate party. In such case, under the section just, quoted, as stated in the note of the revisors thereto, “* * a person may manually deliver a negotiable instrument to another, on its face containing a binding obligation in praesenti of such person to such other, with a contemporaneous verbal agreement that it shall not take'effect until the happening of some specified event (as, that others shall endorse it). This does not violate' the rule that a written instrument cannot be varied by contemporaneous parol agreement, but is only evidence to show that the instrument never had vitality as a contract. * * ” Citing Hodge v. Smith, 130 Wis. 326, 110 N. W. 192. Even if the defendant, Robertson, could be regarded as not an accommodation endorser in the instant-case (upon which subject it is unnecessary for us to express an opinion)—even if he could be regarded as-bound as if he were a maker of the note—by the very terms of the statute, the same rule, just stated, would be applicable. 8 C. J. pp. 205-6 and authorities cited, including Ward v. Churn, 18 Gratt. (59 Va.) 801, 98 Am. Dec. 749. The latter case rests upon the common law rule, which is adopted by the statute. See to same effect Blair v. Bank, 103 Va. 762, 769-772, 50 S. E. 262, and authorities cited. To meet this view of the law the position, among others, is taken in the brief for the plaintiff bank that “There is no evidence in the record from which a conditional delivery can fairly be inferred.’ ’ In view of the testimony of the defendant, Robertson, and' other endorsers of the note, referred to, and some of it quoted, in the statement preceding this opinion, we do not consider such position tenable. [185] We, therefore, feel constrained to reverse the case and award a new trial. As the pleadings will likely be different and the other questions presented by the assignments of error may not arise upon a new trial, we express no opinion upon them. Reversed and remanded for a new trial.