Lovejoy v. Citizens' Bank

The opinion of the court was delivered by Horton, C. J.: In the case of Doolittle v. Ferry, 20 Kas. 230, Mr. Justice Brewer, in speaking for the court of the indorsement of negotiable paper, said: “Where the law furnishes such apt, brief, and well-known expressions for making the indorsement accomplish exactly what the parties may desire, wise policy demands that each form of indorsement should conclusively carry with it the liability which it implies.” Again, “that those implications should be as conclusive upon all the parties as though the full contract were reduced to writing.” While the general rule applicable in such cases has been stated so strongly and clearly, yet certain limitations and exceptions are noted in the opinion — as where the indorsement was without consideration, or upon trust for some special purpose, or where there was an equity arising from an antecedent transaction, including an agreement that the note should be taken in sole reliance on the responsibility of the maker, and that it was indorsed in ordet to transfer the title in pursuance of such agreement, and where the attempt to enforce it would be a fraud. We think these limitations and decisions are justly and wisely recognized in the authorities and decisions; and further, that the [334] portion of the answer in the case at bar which was objected to was amply sufficient, and the allegations, if true, a valid defense. The answer brings the case within the limitations and exceptions of the general rule, and the court erred in sustaining the demurrer. (Doolittle v. Ferry, supra, Sharsw. Starkie, 671; Daniel on Negotiable Instruments, vol. 1, p. 720; Dale v. Gear, 38 Conn. 15.) The judgment of the district court will be reversed, and the case remanded with direction to overrule the demurrer filed by the defendant in error. All the Justices concurring.