NEGO practically his de facto guardian, and that his mother was indebted to him in
[10] IN RE SMITH'S ESTATE, SMITH V CROW approximately the amount of the note and the note was a settlement of this
No. 48214 | January 13, 1953
Mulroney, J.
Julian
PETITONERS/PROSECUTORS: (can’t find it in the case)
RESPONDENTS/DEFENDANTS: (can’t find it in the case)
TOPIC: (as stated in the syllabus)
• Constructive Delivery
CASE SUMMARY: Bruce Smith filed a claim against the estate of his mother, Flora B.
Smith, for $5,000 based on a note signed by his mother, naming him as payee and
payable five years after date without interest. The trial court directed the verdict in
favor of the executrix on the ground there "was not a delivery of the note such as is
contemplated under the law." SC reversed and held that there was ample evidence to
support a finding that the mother was indebted to Bruce and the note was intended
as a settlement of the indebtedness. It also noted that when inferring intent to deliver
from acts and circumstances the jury can infer an intent to deliver to the payee's
possession by the act of placing it where the payee keeps other private and important
papers. Such happened in the case herein since the mother delivered the note to the
receptacle where her son kept his important papers.
DOCTRINE: "The fact whether there was any actual indebtedness at the date of the
note has some material bearing upon the question whether a delivery of the note was
made, or intended to be made."
Delivery of a note by the maker is largely a matter of intention.
There can be delivery notwithstanding the maker retains possession of the note and
the maker can accomplish delivery by delivering to himself as agent for the payee.
FACTS:
• Bruce Smith filed a claim against the estate of his mother, Flora B. Smith, for
$5,000 based on a note signed by his mother, naming him as payee and payable
five years after date without interest. The executrix denied execution and
delivery of the note and asserted lack of consideration and other defenses.
• Smith introduced the note and established it was executed by his mother,
introduced evidence tending to show that his mother had been his agent and
indebtedness, among others.
• The trial court directed the verdict in favor of the executrix on the ground there
"was not a delivery of the note such as is contemplated under the law."
• The following facts were further established:
o The deceased, Flora, wrote out her own will in her own handwriting and this
was found in a tin lock box at the Norwalk-Cumming State Bank at Iowa.
o The note was found in the envelope with the will. The will left deceased's
property to the five children of Bruce and the five children of his sister.
o This tin box in the bank bore a label with Bruce's mother's name on it. It
fairly appears that Bruce used the box as a receptacle for his important
papers. There was evidence in the case that Bruce's mother owed him money
coming to him from his father's estate and that she was anxious to settle this
indebtedness with him. She looked after all of his affairs, rented his farm and
collected the rents, deposited the proceeds in her account and sent him
checks and later sold his farm, signing the contract as Bruce's agent.
o There was also competent evidence of statements made to Bruce that she
wanted to settle up with him. She also made statements that she would sell
her farm if she could get her price as she wanted to get out of debt and have
everything fixed and all their business straightened up, but never did sell
her farm.
ISSUES and RULING: (Doctrine in bold letters)
• WON there was "delivery" of the note as that term is defined in the negotiable
instrument law -- YES
o Section 541.192, Code 1950, provides delivery "means transfer of possession,
actual or constructive, from one person to another." The Court did not pass
on the application of the presumption of delivery that might arise by virtue
of claimant's possession of the note at the time of filing the claim.
o SC first held that "The fact whether there was any actual indebtedness at
the date of the note has some material bearing upon the question whether
a delivery of the note was made, or intended to be made." There is some
assumption that every honest person desires to pay his debts so evidence of
the indebtedness has direct bearing on whether there was delivery of the
instrument which, so the jury could find, evidenced the indebtedness. Here
there was ample evidence to support a finding that the mother was indebted
 to Bruce and the note was intended as a settlement of the indebtedness.
Delivery of a note by the maker is largely a matter of intention.
o It is not necessary that delivery be made by manual transfer. The law
recognizes this by saying there can be a "constructive" delivery or some act
which, under all of the facts is equivalent to actual delivery. There can be
delivery notwithstanding the maker retains possession of the note and the
maker can accomplish delivery by delivering to himself as agent for the
payee.
o It is true Bruce did not have knowledge of the existence of the note until
after his mother's death or if she ever did tell him about it he did not
remember. Admittedly she was the son's agent in most of his business
transactions and the jury could find from the record that she considered
herself practically the guardian for her son who had suffered much from
mental illness. The fact that she constituted herself the guardian for her son
with a weakened mind would be material on the question of delivery even
though she was not his legal guardian. It also appears without question that
the mother delivered the note to the receptacle where her son kept his
important papers.
o When inferring intent to deliver from acts and circumstances the jury can
infer an intent to deliver to the payee's possession by the act of placing it
where the payee keeps other private and important papers. The executrix
cites the case of In re Estate of Martens, but the Court refused to make use of
this as there were differences between the former and the case herein. It held
that the claimant was entitled to have the issue presented to the jury, and
reversed the judgment of the trial court.

DISPOSITIVE: Reversed. All Justices concur.