Case ID: iowa_30/html/0047-01.html
Source: Caselaw Access Project
Author: {"author": "Miller, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James v. Smith et al.
    
    Promissory note: blank indorsement: parol evidence. In an action by an indorsee against an indorser in a blank indorsement of a promissory note, it is competent for the plaintiff to show by parol evidence the actual agreement pursuant to which the indorsement was made, though it establishes a different contract from that implied by the blank indorsement itself.
    
      Appeal from General Term, Fifth District (Polk County.)
    
    Saturday, October 8.
    The petition as it stood at the time of the trial, after several amendments, contained two counts. The first alleged, in substance, that the plaintiff loaned to Redhead & "Wellslager the sum of $1,200; that a note was made by the defendant Smith for the amount of the loan, payable to the order of Redhead & Wellslager, and by them indorsed in blank and delivered to the plaintiff, the defendants Redhead & Wellslager at the time agreeing and promising by parol to pay the amount of the note to the plaintiff, in the event that the plaintiff failed to purchase an interest in a stock of goods owned by the defendant Smith.
    In the second count it is averred, that, at the time of the transfer of the note to the plaintiff by Redhead & Wells-lager, it was agreed by the parties to the note — -which was given for money advanced by plaintiff to Redhead & Wellslager — that it should not be presented for payment until the invoice of a stock of goods belonging to Smith was completed and the plaintiff had determined whether he would purchase an interest therein; that if the plaintiff on the completion of the invoice determined not to purchase, said Redhead & Wellslager should repay said $1,200 with interest to the plaintiff; that said defendants waived protest of the note, and notice of non-payment; that the plaintiff determined not to purchase, upon the completion of said invoice, and gave immediate notice to Redhead & Wellslager, etc.
    Smith made no defense; Redhead & Wellslager answered, denying generally the allegations of the petition.' The cause was tried to a jury. Yerdict and judgment for plaintiff, and the defendants Redhead & Wells-lager appeal.
    Polk, Hubbell & Bancroft for the appellants.
    
      Withrow & Wright for the appellees.
   Miller, J.

But a single question is presented by the record for our determination. The promissory note was inade by Smith, payable to the order of Redhead & Wellslager, and by them indorsed in blank and delivered to the plaintiff. The court permitted the plaintiff to give parol evidence of a contract different from that implied by a blank indorsement, and showing the real nature of the transaction; that the indorsers obtained the loan from the plaintiff, promised to repay the money to the plaintiff, and waived demand, and notice of non-payment by the maker.

The instructions given to the jury were also framed upon this theory of the law.

Appellants’ counsel urge that the rule of evidence, “that prior or cotemporaneous parol evidence is not admissible to contradict or vary the terms of a valid written instrument,” was violated by the court below in the admission of the evidence referred to, and in the instructions given to the jury.

This same question came before this court in Harrison v. McKim, 18 Iowa, 485, where it was learnedly argued and carefully and fully considered, and, after an examination of numerous authorities, it was held that “ in an action by the indorsee against the indorser of a promissory note, on an indorsement made in blank, it is competent for the defendant to show by parol evidence the actual contract or agreement pursuant to which such indorsement was made.”

Under the rule established in that case, there was no error in the admission of the evidence objected to or in the instructions given to the jury. The judgment' will therefore be affirmed.

Affirmed.