Davidson v. . Powell

MaoRais, J.: The indorsement of a note, as generally understood, is its transfer or assignment by writing upon its back, although a negotiable note may be transferred without indorsement. If indorsed it may be, and generally is, in blank, it having long been the practice for the counsel to fill up the bank on the trial, if an action is brought upon it. The blank may be filled by the holder in any way which will not enlarge the liability of the indorser. The usual words by which the indorser may limit his liability are “without recourse”; and by these or similar words it is at once understood that the indorser is not to be held liable unless it turns out that the note is not a valid obligation of those whose names are upon it. The exact and legal meaning of the word “indorsement,” as applied to notes and bills, is “the transfer of a negotiable note or bill by the indorsement of some person who has the right to indorse. Nor can there be an indorsement, in this *579 sonso of the word, except by the payee of the bill; but he may be the original payee, or he may have become, by previous indorsement, a second or subsequent payee.” 2 Pars. Bills & N., 1. To assign is to transfer to another. Abbott’s Law Dictionary. A bill or note may be assigned by delivery, and without indorsement, in which case his liability is somewhat different from that of an indorser. 1 Daniel Reg. Inst., section 730. When assigned or transferred by indorsement he becomes simply an indorser unless, by the terms of the assignment, his liability is limited. When, as in this case, he uses the words, “I assign over the within note to S. M. Powell,” and S. M. Powell indorses, “For value received I assign over the within note to G. A. Davidson,” there is no restriction upon their liability. The effect of indorsements, where expressions like those used in our case are employed by the indorser, is discussed in 1 Daniel, supra (section 688c), where he states his conclusion thus: “It is from the fact that a payee assigns a bill or negotiable note by indorsement of his name on the back of it that the law implies his liability as an indorser. ITis relation to the instrument creates the implication, and the circumstance that he sets forth that relation in express terms does not change it, for the maxim applies, ‘ Expressio eorum quae tacite insunt nihil operatur.’ Did the payee intend merely to pass the title he should use the words ‘without recourse,’ or some phrase of equal import.” By section 50 of The Code, “ Whenever any bill or negotiable bond or promissory note shall be indorsed, such indorsement, unless it be otherwise plainly expressed therein, shall render the indorser liable as surety to any holder of such bill, bond or promissory note.” In the hands of the original payee an indorsement may be shown to be upon certain conditions; but a bona fide holder for value before maturity and without notice is not affected by any equities *580 existing between the original parties. The same rule will apply between the last payee and all subsequent indorsers. It appears that the note in question was assigned by indorsement of the original payee to S. M. Powell before maturity and by him to plaintiff after maturity. Ilis Honor, therefore, presented an issue to the jury, “Was it the understanding of the parties at and before the trade that the notes would be indorsed by S. M. Powell to plaintiff?” which was answered'in the affirmative. It follows from what we have said that there was no error in the refusal of his Honor to give the instructions 'asked by defendants. The effect of the indorsements was to make the indorsers liable under the statute; and if there-was a different agreement between the parties by which the plaintiff was bound the burden was upon the defendants to show it. We concur in the view taken .by his Honor that the “further defence” was too vague and indefinite to be considered. There is no error. Affirmed.