Yates v. Brown

Britt, J. Subsequent to the filing of the case in this court, defendants’ counsel filed a motion to add to the record an order entered by Criss-man, J., on 17 October 1968 extending the time for defendants to docket their record on appeal to and including 16 November 1968. The motion is allowed. In passing upon the merits of the appeal, the first question we must decide is whether the endorsement on the note which is the subject of this action was qualified or unqualified. We hold that it was an unqualified endorsement. In reaching this conclusion, we must consider the law of our State as it existed on 18 October 1963, the date of the endorsement. Defendants were endorsers of the note. G.S. 25-69. To have constituted a qualified endorsement, it was necessary to add to the endorsers’ signatures the words “without recourse” or words of similar import. G.S. 25-44. In the case before us, the endorsement contained the following words: “This note * * * is transferred and assigned to Minnie W. Yates.” In Davidson v. Powell, 114 N.C. 575, 19 S.E. 601, the [95] words “I assign over the within note” were used; the court held that the words used did not limit the endorser’s liability, and in the opinion we find the following: “When assigned or transferred by endorsement he becomes simply an endorser 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 endorses, ‘for value received I assign over the within note to G. A. Davidson,’ there is no restriction upon their liability.” Our conclusion is also supported by decisions from other states. In McCullough v. Stepp, 91 Ga. App. 103, 85 S.E. 2d 159, the words “I hereby transfer my right to this note to W. E. McCullough” were used. The Georgia court held this to be an unqualified endorsement. In Maine Trust & Banking Co. v. Butler, 45 Minn. 506, 48 N.W. 333, the following words were used: “For value received, I hereby assign and transfer the within note, together with all interest in and all rights under the mortgage securing the same, to L. D. Cooke.” The Minnesota court held this endorsement to be unqualified. See also Jones County Trust & Savings Bank v. Kurt, 192 Iowa 965, 182 N.W. 409; and 11 Am. Jur. 2d, Bills and Notes, § 363, p. 386. The next question for our consideration is whether the trial court erred in refusing to permit defendants to introduce parol evidence of an alleged agreement which would tend to qualify the endorsement. We hold that the court did not err in rejecting the proffered testimony. In Bank v. Dardine, 207 N.C. 509, 177 S.E. 635, it was held that evidence of a parol contemporaneous agreement that a person signing a note should not be obligated thereon in any way is incompetent, even as against the payee, the parol evidence being in contradiction of the written instrument. Of like effect were the holdings of our Supreme Court in Kindler v. Trust Co., 204 N.C. 198, 167 S.E. 811, and Bank v. Moore, 138 N.C. 529, 51 S.E. 79. We have carefully reviewed each of defendants’ assignments of error but finding them without merit, they are overruled. No error. Mallard, C.J., and Parser, J., concur.