Opinion
March 2, 1971.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 393
Leland S. Huttner, David B. Savitz, Denver, for plaintiff in error.
Williams, Taussig & Trine, Paul Snyder, Jr., Boulder, for defendants in error.
COYTE, Judge.
This case was originally filed in the Supreme Court of the State of Colorado and subsequently transferred to the Court of Appeals under authority vested in the Supreme Court.
The original complaint was initiated by the plaintiffs Steinbrecher and Dworak, to recover on a check given by defendant Eckley to a couple named Ferguson, and endorsed by them to the plaintiffs. The check was dishonored by the bank because of insufficient funds.
The factual background of this case discloses that in 1962 the Fergusons contacted Dworak Realty Co. in order to purchase a farm from the plaintiff Steinbrecher. As a down payment on the contract the Fergusons sought a loan from defendant Eckley in the amount of $2,000. On July 25, 1962, Eckley executed and delivered his check postdated July 29, 1962, payable to the Fergusons. On the face of the check was written 'Loan on farm.' The Fergusons then endorsed the check and delivered it to the plaintiffs. The check was dishonored by the bank due to insufficient funds in Eckley's account, and the transaction for the sale of the property was never completed.
In July of 1967, this suit was brought to recover on the check. Both the Fergusons and Eckley were named as defendants. A default judgment was entered against the Fergusons and they are not parties to this appeal. Trial was held to the court, which found that the check being sued on was a negotiable instrument and that plaintiffs were holders in due course, and entered judgment against Eckley for $2,000.
Eckley appeals, claiming the trial court misapplied the facts in this case when it held the check to be a negotiable instrument and the plaintiffs to be holders in due course. Since the transaction occurred in 1962, we must refer to C.R.S. 1963, 95--1--1, et seq., for disposition of this case rather than Art. 3 of the subsequently enacted Uniform Commercial Code.
Defendant's first argument is that the check was defective on its face and non-negotiable since it was post-dated and bore the notation 'Loan on farm.' In order for the check to be non-negotiable, it would have to have a patent defect, which would mean that the check does not meet the requirements for negotiability set forth in C.R.S. 1963, 95--1--1, which are:
'(b) It must be in writing and signed by the maker or drawer;
(c) Must contain an unconditional promise or order to pay a sum certain in money;
(d) Must be payable on demand, or at a fixed or determinable future time;
(e) Must be payable to order or to bearer; and,
(f) Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty.'
Since there is no denial of the fact that the check was signed by the defendant, or that it was for a sum certain, or that it was payable at a definite future time to a definite drawee, the defect assigned by the defendant must go to the requirement that it be an unconditional promise to pay. C.R.S.1963, 95--1--3(1)(c), states that a promise is not qualified or made conditional merely because it recites: '* * * the transaction which gives rise to the instrument.' This notation on the check does not affect the negotiability of the checks as this section of the statute is applicable to the notation 'Loan on farm.'
The mere fact that the check was postdated does not render it void, but merely defers negotiability to a subsequent time. Gentry v. People, 166 Colo. 60, 441 P.2d 675. Nor does it qualify or make the promise conditional. C.R.S.1963, 95--1--12, specifically provides that postdated instruments are not made invalid unless done for some illegal purpose. Since the defendant does not claim, nor prove, that the postdating was done for such an illegal purpose, the check remains valid.
The next argument raised is that the plaintiffs are not holders in due course because no value was given in return for the check, as is required by C.R.S.1963, 91--1--52(1)(d). The value spoken of in this section is consideration given by the plaintiffs for the check, not consideration given to Eckley by the Fergusons in return for execution of this check in their favor.
The evidence supports the finding that plaintiffs did give value in the form of a promise to convey the farm in return for the check as earnest money, and therefore plaintiffs' claim of being holders in due course cannot be defeated by this assertion.
We must conclude, therefore, that the check was negotiable within the meaning of the statute and that the plaintiffs did become holders in due course, entitling them to enforce the provisions of the check.
Defendant also argues that the defense of laches is available to him. We note that no change of position by the defendant has been alleged or proven, such a change of position being a necessary element in order to be shielded by the doctrine of laches. Norman v. Boyer, 111 Colo. 531, 143 P.2d 1017.
Judgment affirmed.
DUFFORD and PIERCE, JJ., concur.