Case Name: Heman Barrows vs. Lane & Benham
Court: Vermont Supreme Court
Jurisdiction: Vermont
Decision Date: 1832-12
Citations: 5 Vt. 161
Docket Number: 
Parties: Heman Barrows vs. Lane & Benham.
Judges: 
Reporter: Vermont Reports
Volume: 5
Pages: 161–166

Head Matter:
Heman Barrows vs. Lane & Benham.
Chittenden,
December, 1832.
If A. execute to B. his promissory Note, nnd C. endorse his name in blank mu the same, parole evidence Is admissible to show the understanding, that *0. was to- be holdeu only collaterally.
This wás ah action of ¿assumpsit upon a promissory note for tbe sura of twenty-four dolíais, dated December 14th ÍS29, payable to the plaintiff, in good neát cattle, by the first day of October, A. D. 1830, or in grain in the month iff January thereafter, and signed by the defendant Lane, and endorsed in blank by the defendant Benham.
Plea, General Issue. — On the trial of this issue the defendant Benham offered evidence showing, that at the time of the indorsement by him he refused to sign the note with Lane, or be liable with him as a joint promissor; but that he indorsed the note under the express agreement; that Lane, the signer should first be prosecuted, and in the e-went that Lane failed, that he was to guarantee the payment of thé note. This evideiic-e was by the Court admitted ; and upon it the defendants contended, that Benham ivas not liable as a joint promissor, and moved the Court to be permitted id fill up the indorsement agreeable to the •contract between the parties, when the blank indorsement ivas made. But the Court charged the jury that the in-dorsement, having been made on the sanie- day, the defendant Benham was by law liable as a joint promissor; and directed a verdict for the plaintiff. To this charge and direction of the Court the defendants excepted and the ■cause passed to the Supreme Court.
Manser for plaintiff.
The plaintiff in’ this case contends that the signature of Benham, one of the defendants, upon the back of the note, in blank, constitutes him an original promissor.
1st. IfÁ. give his note, añd B. at the same time, indorse his name in blank upon the back of it, B. is an original promissor, and not a guarantor or indorser. Hunt Ad. vs. Adams, 5 Mass. 358, do. Carver vs. Warren, 545; 9 Mass. 314, White vs. Howland; 6 Mass. 519, Hunt Ad. vs. Ad-sms : 13 Johns. 175 JNekon vs. Dubois.
2d. The evidence, offered by Benham, shewing what he considered the understanding at the time he indorsed the note was not admissible. 7 Mass. 518, Hun i vs. JM-ams; 1 Swift Digest. 180.
3d. If one indorse his ñamé in blank, on a note to which he is riot a'party, the prOmissor may fill up the indorsement so as to charge him as a'joint and several promissor. 6 Mass. 386, Blakely vs. Grant; 11 Mass. 436, JWoies vs*» Éird; 3 Mass. 274j Jbselyn vs. dimes; Doug. Rep. 514, Russell vs. Bahgstaffe.
4th. The undertaking of'Benham at the time, was not a collateral] buta-direct undertaking on his part"; for the legal presumption is that Bárrow's parted with the property which was the consideration of the note in question, its tíónsequence of the signature of Benham. 11 Mass.- ■ 436, ■ Moies vs ..Bird.-
Briggs, for defendant.
IfBenham is riofa' joint promise soY'in virtue of his indorsement, then the action cannot bé riiaintained ; anchin no sense, can he be so considered: The contract of the indorser, is collateral; he dOesmot-engage to pay the note, according to its terms, as does the maker,' but to be responsible'that'the maker pays; and even this' responsibility is discharged on neglect of notice, &c. He is therefore merely a guarantor and not a joint contractor; and since this Court have decided that instruments of this description are to be treated as promissory notes, the fact that the note is payable in specific articles can make no' difference, but leaves the responsibility of the indorser as’ it was at common law, and no case can be found where the action was ever brought' against'the indorser- and: maker as joint promissors.
From the nature of the cas'e, Benham could be nothing-more than a surety. In the 'absence of all other evidence of the nature and extent of his contract than the blank in-dorsement, the law would determine his obligations. Blit here the contract' expressly was, that Benham was not to-be a principal; that Barrows should pursue the maker,- and Benham was not to be liable till the prosecution being ended, Lane’s inability- to pay was established. Such evidence was proper, and ought to have been left to the jury.
In Rhodes vs. Rislry, 1 D. Chipman’s Hep, 5:2, the Court received evidence to show that the endorsement.wás made for the purpose of filling a power of Attorney, and not .to transfer the property of the note. In Miner vs. Robinson, D. Chipman’s Rep. 392, evidence to establish the same tacts, offered to be proved here, was received. In Raker vs. Prentiss, 6 Mass Rep. 430, evidence was received to show that .the indorsement was .for the purpose of collection and.not for-transfer of property of the note.
In these and other cases there cited, it was decided that .where the indorsement was in blank, ;the contract between the original parties, with its conditions, and limitations might be shown by the indorser.

Opinion:
The opinion of the Court was pronounced by
Phelps, J,
At the .trial in the .Court below, my first impression was in favor of the defendant, and I should have admitted the evidence, had not the case of Hunt vs. Adams been presented. But conceiving at the moment that that .case governed the present, and having no leisure to examine it, the evidence was rejected. If the effect of an inr dorsement .of this kind were to make the indorser a joint promissor ,X could see no distinction between one promissor and the other ; and no reason why one could explain his contract by parole if the other could not. I am now satisfied that the principle of those decisions was misapprehended, and so are my brethren.
The law on this subject may be^ expressed in a few •words. The mere name of a person upon blank paper of itself meafis nothing. It is evidence of no contract and has no legal import. To give it any legal .effe.ct, evidence is necessary of a delivery of the signature and fhe general purpose of that delivery. When however such proof is had, such signature becomes binding upon the party in any way or manner consistent with the purpose of delivery. It is an authority to the holder,to make the particular terms of the contract such as he pleases, provided it falls within the the general scope of the transaction in view. Hence -a blank signature delivered for the purpose of.having a promissory note or bill of exchange written upon the paper, is in effect an indefinite letter of credit. Doug. Rep. 514. But even in this case, the delivery and the PurP0S0 that delivery must appear. Hence it appears: that the validity of a contract written over a signature originally deliyered in blank depends altogether upon proof ex^raneotIS ofthe instrument, and in many cases upon mere-verbal testimony. And where evidence is given on one side |o give validity to such a contract, counter evidence is proper on the'other side to rebut it. The result is, that the whole subject, rests in the outset in parole; and in. this; light it is uniformly treated in the books. It is also competent for the party to limit or qualify his liability at the time ; and whatever may be the effect of a blank signan ture as it respects third persons, in case it is attached to negociable paper, yet, as between the original parties, iheif actual under-standing and agreement is always to be regarded. This is abundantly shown even by the authorities cited by the plaintiff.
Where, as in this ease, the signature is attached to- an instrument already executed, and to which the signer is not previously a party, the presumption is that the signeir intended to bind himself in some way In respect to the contract: and as he has left the terms of hrs contract indefinite by signing in blank, it is understood, in the absence of proof to be in any way or manner which the holder may elect. It is on this ground that the cases relied on by the plaintiff turn. Were this however a new question, we should have some doubt whether the circumstance of indorsing a note in this manner, instead of signing it did not of itself imply a collateral guarantee instead of a joinf. obligation. The subject however has been viewed otherwise in some of the states, ar i perhaps theirs is the better doctrine. But y^hatew / may be the prima faci% inference from such an indo sement, the question in this case is, whether parole evidf ice i admissible to explain it
From what has been said it is iparent that such evidence is admissible. Nor does th position impugne the doctrine that written contracts ai 3 not to be varied by parole 5 for here is no contract in writing — there is evidence of a contract of some kind, but its particular terms are not given on the paper but are left to be ascertained by parole. In accordance wi.th this view of the subject are all the authorities; and to prove this, we must go no farther than the authorities cited by the plaintiff himself.
In Jocelyn vs. Ames, 3 Mass. R. 274, parole proof was admitted; and the Court held that the plaintiff could not rel cover upon the contract which he had written over the' defendant's indorsement, but that upon the facts proved, he was at liberty to write over it a different contract upon which he might recover, and the plaintiff took judgement by consent. This case shews that parole proof was admissible on both sides.
In Hunt vs. Adams, 6 Mass. R. 358, -there was no question as to parole proof, but the question was what was the .legal inference from the endorsement in the absence of proof. Upon a subsequent' trial of the same case, see 5 Mass. 516; parole evidence was admitted, and it was left i.o -the jury to determine whether the defendant's undertaking was absolute or conditional. In Carver vs. Warren, 5 Mass. 545, the plaintiff in counting on such an endorsement set forth the making of the note by J. C., and averred, that<! the defendant, there afterwards by his writing under his hand on the back of said note, for value received, promised the plaintiff to pay him the contents of said -note, agreeably to the tenor thereof." To this the defendant demurred. Parsons, C. J. says, " If, as has been suggested, the defendant endorses his name as a guarantor, and the present endorsement had been made, without his consent, or any authority from him, he should not have .demurred, but should have pleaded the general issue and on the trial he might have availed himself of this defence."
In White vs. Howland, 9 Mass. R. 314, parole evidence was introduced and the case was held to fall within the principle of Hunt vs. Adams. Moies vs. Bird, 11 Mass. R. 436, like Hunt vs. Adams, merely decides, that upon the indorsement alone, without proof to explain it, the indor-.sor may be treated as a joint promissor.
Nelson vs. Dubois, 13 John. R. 175, turned also upon parole proof explaining the indorsement.
If it were necessary to go further, we might refer to the cases in D. Chipman's Rep. 52 & 892, as cited by counsel in support of our decision.
Manser, for plaintiff.
Briggs, for defendant.
On the whole, we are all of opinion, that the judgement of the County Court is erroneous and must be reversed. case is remanded for trial.