Case Name: McGaughey and Another v. Elliott and Another
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1862-05
Citations: 18 Ind. 121
Docket Number: 
Parties: McGaughey and Another v. Elliott and Another.
Judges: 
Reporter: Indiana Reports
Volume: 18
Pages: 121–123

Head Matter:
McGaughey and Another v. Elliott and Another.
A made his note payable to the order of JB, and B and C then endorsed it to B, who sued A, B, and C, as joint makers, alleging that they made the note:
Held, that the complaint was bad on demurrer.
Held, also, that B being the payee, could in no sense be deemed a maker, and having endorsed the note, his contract as an endorser can not be varied by extrinsic evidence.
Held, also, that C, having endorsed the note under B, his contract became that of an endorser, and must be governed by the same rule.
APPEAL from the Shelby Circuit Court.

Opinion:
Davison, J.
Elliott and Major sued Bavid McGaughey, Robert McGaughey, Samuel McGaughey and Alexander Corey, upon a promissory note, alleging in their complaint, that, on the 19th of January, 1857, the three McGaugheys made and delivered the note to one Thomas 'Wray; that Bavid Mc-Gaughey signed the note on its face; that the same was made payable to Robert Me Gaughey, and was at the time it was made endorsed by Robert and Samuel McGaughey, for the purpose of making it acceptable to Wray; that the note thus made by all the parties was sold and transferred to Wray, who afterwards assigned it to Corey, who, without endorsement, assigned the same to the 'plaintiffs. A copy of the note and endorsements was filed with the complaint, and made a part of it, in these words:
"$1,600. January 19, 1857.
"Twelve months after date, I promise to pay Robert Mc-Gaughey, or order, 1,600 dollars value received, without any relief whatever from the appraisement laws.
"David McGaughey."
Endorsed, "Robert McGaughey," " Samuel McGaughey."
Corey was made a defendant to answer as to his assignment to the plaintiffs. Process against Davicl McGaughey was returned "not found." Robert and Samuel demurred severally to the complaint; but their demurrers were overruled, and they excepted. The Court, to whom the issues were submitted, found for the plaintiffs, and against the defendants—Robert and Samuel McGaughey—1,816 dollars, and, having refused a new trial, rendered judgment upon the finding, &e.
The only question to settle is, Are the appellants liable as makers qf the note? In Vore v. Hurst, 13 Ind. 551, it was held, that " where a promissory note is endorsed by the payee, whose name is followed upon the back of the note by other names in blank, parol evidence will not be allowed to- vary the effect of the endorsements thus appearing on the note." This case is, in our judgment, decisive of the one before us. The note, as we have seen, was signed by David McGaughey, was made payable to Robert McGaughey, was endorsed by him, and then by Samuel McGaughey. And this being the case, the averment in the complaint that they made the note, is not consistent with its legal effect, and is, therefore, ineffective. Decause Robert McGaughey being the payee, can in no sense be deemed a maker; and having endorsed the note, his contract as an endorser became defective in point of law, and can not be varied by extrinsic evidence. And tbe name of Samuel McGaughey standing, as it does, second on tbe back of the note, makes his contract that of an endorser, and renders it liable to a similar construction. The demurrer was no doubt well taken, and should have been sustained.
Gordon § Beal, for appellants.
Per Curiam.
The judgment is reversed, with costs. Cause remanded for a new trial.