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with an attorney it was ascertained fer on the record of the deed of that it was not necessary for an ac trust, then plaintiff cannot hold knowledgment to the transfer to be Shields on said indorsement, and the made on the record. The real estate jury will find for the defendant.” covered by the several mortgages And a verdict was returned for the was old under the first trust deed, defendant, and from the judgment and Hawkins became the purchaser. entered thereon this appeal is prosThe property did not bring enough ecuted. money to pay the debts covered by In the first place, it may be said the first and second trust deeds, and there was no evidence at all, even the result was that Hawkins de if it were admissible, that the inmanded of Shields the balance that dorser, Shields, was not to be rewas due on the Johnson notes, trans sponsible in the event the makers ferred by Shields to Hawkins. failed to pay the notes. There was

The defense set up by Shields was in truth and in fact no agreement that at the date of the transfer one way or the other about this matShields was not to be responsible ter. Evidently the conversation reas an indorser of the notes. There lating to having the record show a is no evidence in the record to show transfer of the notes was for the that at the time of this transfer purpose of complying with $ 2794 of there was any understanding at all the Code of 1906, to the effect that between Hawkins and Shields as to the assignor "shall be required by the latter's liability on the notes as the assignee to enter the fact of the indorser. Hawkins never said any- assignment on the margin of the thing to Shields about being liable record of the lien, and in default of as indorser until after the property making such entry any satisfaction was sold under the trust deed, but

of the lien or instrument shortly thereafter he made demand evidencing it, entered by the original upon Shields for the difference. creditor, shall release the same as to Shields's testimony on this point is subsequent creditors and purchasas follows: "There was no agree ers for value without notice," ete.; ment between me and you that I was and under $ 2795 of the Code it is to become responsible. He says: 'I provided that “all assignments know it, but the place did not bring

of any indebtedness seenough to pay the two notes; but, cured by mortgage [etc.] shall be as your indorsement is on the notes, entered on the margin of the record I will look to you for it.' I says:

of the lien within thirty days from 'If I was legally or morally responsi the day of said assignment,” and ble to you, I would pay you; but I

for a failure so to do the assignee am neither legally nor morally re

"shall forfeit to the debtor 10 per sponsible for it. You did not ask

cent of the amount of said indebt

edness." We must conclude from me to indorse them to you, and for

the evidence in this case that the that reason I will not pay it, unless

conversation had between Hawkins the law says so.'' Objection was

and Shields, as to letting the record made to the testimony of Shields,

show the assignment, was simply for objection overruled, and exception

the purpose of complying with the taken.

provisions of these two statutes. The court gave the following in

The indorsement of a bill or note struction for the defendant: “The

is not merely a transfer thereof; court instructs the jury for the de- but it is a fresh and substantive fendant, Shields, that if they believe

contract, embodying all of the terms from the evidence that Shields did

of the instrument in itself. The innot indorse said notes for the pur dorsement of a bill pose of transferring same to E. B.

is equivalent to the effect of Hawkins, and that the only require- drawing of a new ment of Hawkins from Shields was bill by the indorser upon the drawee that Shields was to make the trans in favor of the indorsee; and the

Bills and potes




(100 Mi88. 739, 57 SO. 4.) indorsement of a note is equivalent they should be left for the ascertainto the drawing of a bill upon the ment and judgment of the jury unmaker, who stands in the relation of der proper instructions from the acceptor, as it were, in favor of the court. Further, that when the facts indorsee. So entirely distinct and are ascertained it is for the court to independent is the contract of an determine what is reasonable time indorser of a note thereof and the as a matter of law. Dan. Neg. maker that at common law a sepa Inst. § 612; Baskerville v. Harris, rate action against each was in supra. dispensable. The indorser engages It is elementary that parol evithat the bill or note will be accepted dence is never ador paid, as the case may be, accord missible to contra- parol-to vary ing to its purport; dict or vary the

writing. -engagement of but this engagement terms of a valid written instru

is conditioned upon ment. While this general prindue presentment or demand and ciple is admitted to be applinotice. It also engages that it is cable to all contracts written out in every respect genuine, that it is in full, some authorities are not the valid instrument it purports to willing to apply this principle to be, that the ostensible parties are those contracts which are raised competent, and that he has the law- from implication by the operation ful title to it and the right to in of law, such, for instance, as indorse it. Such is the nature and ef dorsements in blank. Such seems fect of the contract of indorsement to be the rule in Pennsylvania, as shown by all of the authorities. North Carolina, Florida, Colorado,

As between the indorser and in- and Connecticut; but this doctrine dorsee there is no difference in the is certainly opposed to the great contract of indorsement, so far as weight of authority, and also to the the rights and liabilities of the better reason. When it appears

indorser are con from an inspection of the paper that

cerned, when the in- the party is an indorser, there seems Ing-effect.

dorsement is made to be no just ground for the disbefore and when made after matu- tinction taken between the implied rity; the only difference being that contract from his mere name therewhen the indorsement is made be

on written and contracts written out fore the maturity of the bill or note, in extenso. The signature of the the time of payment is fixed by the indorser upon the bill or note is as terms of the instrument itself; but marked a manifestation of the inwhen the indorsement is made after tention of the party as if the conmaturity, payment must be demand tract were set forth in express ed of the payor within a reasonable words. All of the authorities hold time and notice, in the event of a that, though there be nothing but refusal given to the indorser in or the indorser's signature, the indorsder to charge him. In such an in

er's contract is as fully expressed stance the instrument is regarded as that of the drawer of the bill or as being equivalent to one payable maker of a note payable to bearer; on demand. Dan. Neg. Inst. 5th ed. and it is a general rule, supported $611, and authorities cited in notes; by the great weight of authority, 7 Cyc. 822, et seq; Baskerville v. that the indorser in a suit brought Harris, 41 Miss. 535.

by the indorsee,

-varying inThe great weight of authority is whether mediate or dorsement on that, when the facts are few and remote, cannot show

simple, it is within by parol that it was agreed that

the province of the the indorser should not be liable, presenting note.

court to determine and that his indorsement was with: what is reasonable time; but, when out recourse on him.

Brown v. they are complicated and doubtful, Spofford, 95 U. S. 474, 24 L. ed.

-time of mak


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508; Martin v. Cole, 104 U. S. 30, The evidence in this case shows 26 L. ed. 647; Dan. Neg. Inst. § that the indorser wrote his name in 709; Tiedman, Com. Paper, § 274. blank across the back of the notes Indeed, this is no new question in and delivered the same to a bank, this state, as has been so declared when he hypothecated these notes by this court. Baskerville v. Harris, as collateral security for an accomsupra.

modation extended by the bank; that În denying the admissibility of

when he paid the bank its debts parol evidence to vary or to contra

these notes were surrendered to the dict the terms of a contract of indorser, Shields; that the indorser indorsement, we, of course, do not

did not erase his indorsement, but extend this rule, so as to exclude evidence offered to show want or fail when, subsequently, he made

the con

the same remained on the notes, and ure of consideration, or in cases of

tract with the appellant, Hawkins, irregular indorsement (Thomas v. Jennings, 5 Smedes & M. 627; Polk

he, the indorser, did not rewrite inghorne v. Hendricks, 61 Miss. 366;

his name or reindorse the notes, but Holmes v. Preston, 70 Miss. 152, 12

delivered the notes with the old inSo. 202; Richardson v. Foster, 73

dorsement thereon, --it being a blank Miss. 12, 55 Am. St. Rep. 481, 18 So. indorsement. It was not at all 573; Pearl v. Cortright, 81 Miss. necessary to rein300, 33 So. 72), or to impeach the dorse the notes. The Note-second original or present indorsement on delivery of the notes original inthe ground of fraud, nor to exclude with the old inthe parol evidence to the effect that dorsement thereon the indorsement was upon trust for was an adoption of the former insome special purpose, as from a

dorsement, and was equivalent to a principal to an agent, or for collec- new indorsement. No authority is tion merely, or as an escrow upon

needed for so obvious a proposition. an express condition that has been The instruction given for appellee complied with, and in cases of fraud, was in direct conflict with this opinand perhaps in other instances. ion, and the cause is reversed.


dorsement effect.


ANNOTATION. Admissibility of parol evidence to vary or explain the contract implied from

the regular indorsement of a bill or note. 1. Introductory, 765.

II. a, 3-continued. II. Instruments regularly executed and

(b) Agreements enlarg. transferred:

ing the ina. Majority rule:

dorser's con1. In general, 765.

tract: Theory, 771.

(1) Agreement 3. Application:

that indorser (a) Restrictive agree

maker, ments:

surety, (1) In general,

guarantor, 772.

774. (2) That indorser

(2) Agreement was not to in

waiving de

mand and noany li. ability or

tice, 774.

4. Limitations, 776. that indorse

b. Minority rule: ment was to

1. In general, 778. be without re

2. Theory, 781. course, 772.

3. Application, 783. (3) Miscellanous,

4. As against subsequent 773.

holders, 784.



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III. Accommodation indorsers:

V. Evidence to show absence of cona. In general:

tractual intention or limited 1. Theory of regular indorse

contractual intention: ments, 785.

a. In general, 798. 2. Theory of irregular in

b. Indorsement for collection, dorsements, 789. b. Actions between original par

799. ties, 790.

c. Indorsement for collateral seIV. Qualified indorsement:

curity, 801. a. Indorsement without recourse,

d. Indorsement to transfer to 794.

true owner, 801. b. Indorsement "with recourse,"

e. Indorsement to evidence pay795.

ment, 802. a Indorsement "for collection" or

VI. Negotiable Instruments Law, 802. "for account," 796. d. “Without recourse" between

VII. Identification indorsements, 803. indorsers' signatures, 797. VIII. Ambiguous indorsements, 803. 1. Introductory.

qualifiedly indorsed by such transferThe admissibility of parol evidence rer to evidence the transfer, the deto vary or explain the contract im cided weight of authority holds that plied from a regular indorsement can the contract implied from such indorsenot be stated in any general way. ment, whether it is made in blank or There are several elements which have in full, cannot, even as between the a bearing upon the admissibility. The parties, be varied or explained by pacircumstances under which the in

rol evidence of a prior or contemporadorsement was made, the question as

neous agreement. to whether the rights of a bona fide

United States.-Bank of United holder are involved, and the character

States v. Dunn (1832) 6 Pet. 51, 8 L. of the evidence, are the three chief

ed, 316 (see Rose's notes to this case); elements to be considered on the ques

Martin v. Cole (1881) 104 U, S. 30, 26 tion. As regards the circumstances

L. ed. 647; Bank of Alexandria v. Deunder which the indorsement was neale (1824) 2 Cranch, C. C. 488, Fed. made, indorsements may be divided in

Cas. No. 846; Van Vleet v. Sledge to (a) those made by a holder of the

(1890) 45 Fed. 743 (in full). instrument for value upon a transfer

The holding in Susquehanna Bridge of the same in the ordinary course of

& Bank Co. v. Evans (1824) 4 Wash. a commercial transaction, and (b)

C. C. 480, Fed. Cas. No. 13,635, that accommodation indorsements.

parol evidence is admissible, is overThe present note deals only with

ruled by the above decisions of the regular indorsements. This limitation

United States Supreme Court. is particularly important in its rela

Alabama.--Sommerville v. Stephention to accommodation indorsements.

son (1831) 3 Stew. 271; Hightower v. Accommodation indorsements are

Ivy (1835) 2 Port. 308; Tankersley v. sometimes regular and sometimes ir

Graham (1845) 8 Ala. 247; Carlton regular. The present discussion is

v. Fellows (1848) 13 Ala. 437; Day v. confined to those that are regular in

Thompson (1880) 65 Ala. 269 (in form, that is, an indorsement appear full); Preston v. Ellington (1883) 74 ing after the indorsement of the payee.

Ala. 133.
Il. Instruments regularly executed and


Davis transferred.

(1863) 23 Cal. 256; Citizens' Bank v.

Jones (1898) 121 Cal. 30, 53 Pac. 354. a. Majority rule.

Colorado.-Martin v. Cole (1876) 3 1. In general.

Colo. 113, affirmed in (1881) 104 U. S. When an instrument which has had 30, 26 L. ed. 647; Dunn v. Ghost (1879) a valid inception in the hands of the 5 Colo. 134; Doom y. Sherwin (1894) payee is by such payee or subsequent 20 Colo. 234, 38 Pac. 56; Torbert v. indorsee transferred with the intent Montague (1906) 38 Colo. 325, 87 to pass the property therein, and un Pac. 1145.

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Connecticut.–Dale v. Gear (1871) 8 Me. 213, 23 Am. Dec. 499; Smith v. 38 Conn. 15, 9 Am. Rep. 353; Hopkins Frye (1837) 14 Me. 457; Crocker v. v. Merrill (1907) 79 Conn. 626, 66 Atl. Getchell (1844) 23 Me, 392; Goodwin 174; SCHINE V. JOHNSON (reported v. Davenport (1860) 47 Me. 112, 74 herewith) ante, 744.

Am. Dec. 478. The doctrine of these Georgia.--Bartlett v. Lee (1863) 33 cases is overruled by the later cases Ga. 491; Meador v. Dollar Sav. Bank in this state. See infra, II. b, 1. (1876) 56 Ga. 605; Dunn V. Welsh Michigan.—Newberry v. Trowbridge (1879) 62 Ga, 241 (case inyolved a (1865) 13 Mich. 263; Ortmann v. Cana. New York contract). See Georgia dian Bank (1878) 39 Mich. 518. statute discussed in II. b, 1.

Minnesota.-Levering v. WashingIllinois.--Mason v. Burton (1870) ton (1859) 3 Minn. 323, Gil. 227 (note 54 IU. 349; Skelton y. Dustin (1879) given to assignees of maker and by 92 III. 49; Courtney v. Hogan (1879) them indorsed, to pay debt of maker); 93 Ill. 101; Johnson v. Glover (1887) Borup v. Nininger (1861) 5 Minn. 523, 121 III. 283, 12 N. E. 257; Hately v. Gil. 417; Kern v. Von Phul (1862) 7 Pike (1896) 162 III. 241, 53 Am. St. Minn. 426, Gil. 341, 82 Am. Dec. 105; Rep. 304, 44 N. E. 441; Cozzens v. First Nat. Bank v. National Marine Chicago Hydraulic-Press-Brick Co. Bank (1873) 20 Minn. 63, Gil. 49; Coon (1897) 166 Ill. 213, 46 N. E. 788 (obi v. Pruden (1878). 25 Minn. 105; Knobter); George E. Lloyd & Co. v. Mat lauch v. Foglesong (1888) 38 Minn. thews (1906) 223 Ill. 477, 7 L.R.A. 352, 37 N. W. 586; Farwell v. St. Paul (N.S.) 376, 114 Am. St. Rep. 346, 79 Trust Co. (1891) 45 Minn. 495, 22 N. E. 172; Kimmel v. Weil (1901) 95 Am. St. Rep. 742, 48 N. W. 326; Clarke Ill. App. 15; Second Nat. Bank v. Wood v. Patrick (1895) 60 Minn. 269, 62 N. ruff (1904) 113 Ill. App. 6; First Nat. W. 284; Giltner v. Quirk (1915) 131 Bank v. Heeb (1914) 188 Ill. App. 194. Minn. 472, 155 N. W. 760; Lake Har

This rule was applied to an indorse riet State Bank v. Miller (1917) 138 ment by a man who married the payee Minn. 481, 164 N. W. 989. in Beattie v. Browne (1872) 64 Ill. Mississippi.--Baskerville v. Harris 360.

(1867) 41 Miss. 535; HAWKINS v. Indiana.-Wilson v. Black (1843) 6 SHIELDS (reported herewith) ante, Blackf. 509; Bowers v. Headen (1853) 760. 4 Ind. 318; McGaughey v. Elliott Missouri.-Rodney v. Wilson (1877) (1862) 18 Ind. 121; Parker v. Morton

67 Mo. 123, 29 Am. Rep. 499; Beeler v. (1867) 29 Ind. 89; Campbell v. Rob

Frost (1879) 70 Mo. 185; Lewis v. ns (1868) 29 Ind. 271; Lee v. Pile

Dunlap (1880) 72 Mo. 174; Howser v. (1871) 37 Ind. 107; Holton v. McCor

Newman (1896) 65 Mo. App. 367; mick (1873) 45 Ind. 411; Smythe v.

First Nat. Bank v. Korn (1915) Scott (1886) 106 Ind. 245, 6 N. E. 145;

Mo. App. 179 S. W. 721; People's Brown v. Nichols, S. & Co. (1889) 123

Bank v. Baker (1917) Mo. App. Ind. 492, 24 N. E. 339 (dictum).

193 S. W. 632; Eaves v. Keeton (1917) Jowa. It is not clear whether the indorser in Porter v. Moles (1911) 151

196 Mo. App. 424, 193 S. W. 629. Iowa, 279, 131 N. W. 23, was a regular

New Hampshire.-Barry v. Morse indorser, but apparently this was the

(1824) 3 N. H. 132. fact. In that case parol evidence was

New Jersey.-Foley v. Emerald & P. held inadmissible to vary the contract Brewing Co. (1898) 61 N. J. L. 428, 39 of a blank indorser under the Negotia

Atl. 650. See Chaddock v. Vanness ble Instruments Law.

(1871) 35 N. J. L. 517, 10 Am. Rep. 256 Kansas.-Doolittle v. Ferry (1878) and Johnson v. Ramsey (1881) 43 N. 20 Kan. 230, 27 Am. Rep. 166 (in full); J. L. 279, 39 Am. Rep. 580, infra, II. Guaranty Invest. Co. v. Gamble (1918)

b, 1. 102 Kan. 791, 171 Pac. 1152.

New York.-Bank of Albion v. Louisiana.--Helm v. Ducayet (1868) Smith (1858) 27 Barb. 489; Washing20 La. Ann. 417 (obiter).

ton Sav. Bank v. Ferguson (1899) 43. Maine.-Fuller v. McDonald (1832) App. Div. 74, 59 N. Y. Supp. 295; Hod

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