Case Name: Rockfield et al. v. The First National Bank
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1907-12-17
Citations: 77 Ohio St. 311
Docket Number: No. 10336
Parties: Rockfield et al. v. The First National Bank.
Judges: Si-iauck, C. J., Price, Crew, Summers and Davis,. JJ., concur.
Reporter: Ohio State Reports, New Service
Volume: 77
Pages: 311–332

Head Matter:
Rockfield et al. v. The First National Bank.
Third person places name in blank — On back of note before or at time of delivery — Liable as indorser and not surety — Entitled to notice of demand — Section 31JI et seq., Revised Statutes.
Prior to the taking effect of the act of April 17, 1902, entitled “An act to establish a law uniform with the laws of other states on negotiable instruments,” a third person placing his name in •blank on the back of a promissory note before or at the time of delivery, assumed the position of a surety unless a different understanding between the parties was shown, and he did not thereby become an indorser in the legal sense of the term, nor contract any liability but that of maker. Ewan v. The BrooksWaterfield Co., 55 Ohio St., 596. But by force of said act (sections 3171. 3173^, 3i73h 3i'73L 3l73g, 31743 and 31780, Revised Statutes), such person so placing his name on the back of the paper by blank indorsement is an indorser and cannot be held in any other capacity. As such he is entitled, in- order to render him liable, to notice of demand upon those who are primarily liable, and failing such demand and due notice to him, he is discharged.
(No. 10336
Decided December 17, 1907.)
Error to the Circuit Court of Clark county.
Action was brought in the common pleas of Clark'by The First National Bank of Springfield against H. L. Rockfield, L. M. Goode, E. H. Ackerson, John Snyder, Frank Patterson and The Springfield, Charleston, Washington & Chillicothe Railway Company, to recover on a .promissory note, a copy of which follows:
“$10,000. Springfield, Ohio, December 12, 1904.
“On demand after date we jointly and severally promise to pay The First National Bank of Springfield, Ohio, or order, at its banking house Ten thousand dollars for value received, with six per cent, interest after date.”
“(Signed) The Springfield, Charleston, Washington & Chillicothe Railway Company.
“H. L. Rockfield, President, E. IT. Ackerson, Secretary.”
On the back of the note appeared these names: “John Snyder, Frank Patterson, L. M. Goode, E. H. Ackerson.”
The petition avers that there were no credits and that there were due plaintiff from defendants ten thousand dollars with interest from date. It further avers that the defendants, Rockfield, Goode, Ackerson, Snyder and Patterson indorsed the note before it was delivered to plaintiff; that due demand had been made of each defendant July 5, 1905, but no part had been paid.
Demurrers were interposed by defendants, Rock-field, Snyder and Ackerson, which being overruled those defendants answered admitting that they indorsed the note before delivering it to plaintiff, but averred that they indorsed it for accommodation only, receiving no consideration whatever for so indorsing the note. Also that defendants were not notified of the non-payment of the note by the maker at maturity, and, therefore, were not indebted to the plaintiff in any sum. To this answer plaintiff demurred. This demurrer was sustained, and the answering defendants not desiring to plead further, judgment was rendered against them for the amount claimed and costs. On error to the circuit court this judgment was affirmed. Rockfield and Snyder, by this proceeding, ask a reversal of the judgments below.
Mr. James Johnson, Jr., and Mr. W. R. Horner, for plaintiffs in error.
The only question in the case arises on the construction of the new Negotiable Instruments law, passed April 17, 1902, found in 95 O. L., 162.
It appears from the copy of the note in the petition that the indorsement was in blank. There is no allegation in the petition that the plaintiffs in error sustained any other relation to the note than indorsers, but it is alleged that they indorsed the note before is was delivered.
We contend that the indorsers were entitled to notice of non-payment.
Owing to the anomalous character of such an indorsement there was a wide diversity of holding by the courts of England and the United States as to its legal effect. What was the liability of such an indorser?
Some courts held that the obligation was that of first indorser. Others held it to be that of second indorser. Others that it imports a contract of guaranty. Others that the signer was liable as a surety and some that no obligation was incurred. In England such an indorsement was held to impose no liability^ whatever. 1 Ames Cas. B. & N., 269.
The rule referred to in the books as the' “Massachussets” rule held that such a signature creates a liability as surety. Moies v. Bird, 11 Mass., 436.
This rule was afterwards called in question by the Supreme Court of Massachussets in Bank v. Willis, 8 Metc., 504.
Another rule, known as the New York rule, held that the liability of a stranger who signed his name on the back of a negotiable instrument before delivery is that of an indorser. Coulter v. Richmond et al., Admrs., 59 N. Y., 478; Phelps v. Vischer, 50 N. Y., 69.
This rule prevailed in many states. Temple v. Baker et al., 125 Pa. St., 634; Delsman v. Friedlander et al., 66 Pac. Rep., 297; Comparree v. Brockway, 11 Hump. (Tenn.), 355; Perkins v. Catlin, 11 Conn., 213; Price v. Lavender, 38 Ala., 389; Cady v. Shepard, 12 Wis., 639; Bank v. Dreydoppel, 134 Pa. St., 499; Daniel on Negotiable Instruments, Vol. 1, Sec. 713d; De Pauw v. Bank, 126 Ind., 553; Jennings v. Thomas, 13 S. & M. (Miss.), 617.
In Ohio the supreme court followed the rule that an indorser in blank before delivery is liable as surety.
• This rule was followed and stated in Ewan v. The Brooks-Waterfield Co., 55 Ohio St., 596.
This hopeless confusion as to liability caused great difficulty in commercial transactions, and the necessity of some uniformity was constantly pointed out by the courts and writers.
Fortunately this confusion has been largely removed by the passage in many states of the Negotiable Instruments law, which follows generally the “English Bills of Exchange Act.”
This law fixes the liability as that of an indorser in due course.
The Massachusetts rule above quoted was abro gated by statute whicK provides “all persons becoming parties to promissory notes by a signature in blank on the back thereof shall be entitled to notice of non-payment the same as an indorser.” Massachusetts Statutes, 1874, Ch. 404; Bank v. Law et al., 127 Mass., 72; California Code, Sec. 3117; Fessenden v. Summers et al., 62 Cal., 484; Fisk v. Miller, 63 Cal., 367.
The following states and territories have adopted the “Negotiable Instruments law”: Ohio, Arizona, Colorado, Connecticut, District of Columbia, Florida, Iowa, Maryland, Massachusetts, New Jersey, New York, North Carolina, North Dakota, Oregon, Pennsylvania, Rhode- Island, Tennessee, Utah, Virginia, Washington, Wisconsin. See Eaton & Gilbert on Commercial Paper, 653.
This law as given in Eaton & Gilbert, 654 et seq., is the same as the Ohio law.
The legislature of Ohio recognizing the desirability of uniformity on this important subject and following, the implied suggestion by the supreme court in the language above quoted from Ewan v. The Brooks-Waterfield Co., supra, passed the law April 17, 1902, 95 O. L., 162.
The first-section of the act, Section 3171, defines a negotiable instrument and describes the maker.
We confidently assert that Section 3173/1, and the next disposes of the question in this case. Under the old rule in Ohio the status of one who placed his signature in blank on the back of a note, was not by that act alone fixed. He might be shown to be a guarantor, an indorser or a surety. But by this section his status is fixed as that of an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity.
Of course in the case at bar the plaintiffs in error come under subdivision one of Section 3173*. The note was payable to a third person (the bank) and plaintiffs in error were liable (as indorsers) to the payee and all subsequent parties.
If a note would come under subdivisions 2 and 3, the indorser before deliver)^ would not be liable to payee, but would be liable to “all parties subsequent to the payee,” but always and only liable as indorser.
This Section 3173! lays down the conditions under which the irregular indorser (one who indorses in blank before delivery) is liable to the payee and all subsequent parties and then the conditions under which he is liable only to the “parties subsequent to the payee.”
The defining of these conditions is the only object of that section. It says so.
But the section itself carefully and explicitly declares that the liability is that of indorser.
But under whatever class he would come, of those enumerated, the section fixes his liability to be that of indorser. The old rule in Ohio as declared in Ewan v. Brooks-Waterfield Co., supra, in second proposition of syllabus, is — The undertaking of a third person who places his name in blank on the back of a note before delivery, etc., is that of surety of the maker for the payment of the note, etc.
In Rhode Island the old rule was that an irregular indorser in blank before delivery was liable as joint maker. In 1899 t,he Negotiable Instruments act was passed in that state. See Downey v. O’Keefe, 59 Atl. Rep., 929; Thorpe v. White et al., 188 Mass., 333; 73 N. E. Rep., 644; Cyc. of Law & Procedure, Vol. 7, 673.
The indorsers were entitled to notice that the note had been presented to the maker and payment refused.
Notice that the maker has not paid is the thing that is required.
He only contracts to pay in case he is notified that the maker has not paid. Section 3173A Revised Statutes; Bank v. Law et al., 127 Mass., 72.
For additional authorities, see: Gibbs v. Guaraglia, 67 Atl. Rep., 81; Baumeister v. Kuntz, 42 So. Rep., 886; Farquhar Co. v. Higman, 112 N. W. Rep., 557; Vander Ploeg v. Van Fuuk, 112 N. W. Rep., 807.
Messrs. Hagan & Hagan and Messrs. Martin & Martin, for the Bank, defendant in error.
The legal propositions involved may be stated thus:
1st. When the name of a third person is placed upon a joint and several note prior to its delivery, such person’s undertaking rests upon the consideration which supports the note, and the legal presumption is that he is one of the makers, and a surety thereon, unless he can show that there was a different agreement or understanding between the parties.
2d. That such original promisor upon such note is primarily responsible thereon, and as such, under the Negotiable Instruments act, is not entitled to notice of non-payment.
Since the case of Douglas v. Waddle, 1 Ohio, 414, decided in 1824, up to the present time, a period of eighty-three years, through an uninterrupted course of decisions applicable to the various forms of negotiable instruments and other obligations, the principle stated in the first proposition has been clearly and definitely established.
Irrespective of the form of the note, or the order in which the names appear thereon, the responsibility of the parties is primarily determined by the fact whether their names were placed upon the instrument prior to delivery, or subsequent thereto. If prior to delivery, then they are makers or sureties. If after delivery, they are not makers or sureties, unless the facts show that they intended to become such.
The most important of the decisions of our supreme court, announcing and affirming these principles for almost a century, are: Bright v. Carpenter et al., 9 Ohio, 141; Stage v. Olds, 12 Ohio, 159; Champion v. Griffith, 13 Ohio, 228; Robinson v. Abell, 17 Ohio, 36; Gale’s Admx. v. Van Arman, 18 Ohio, 336; Seymour & Co. v. Leyman, 10 Ohio St, 283, s. c. 15 Ohio St., 515.
A résumé and a reaffirmation of these prior decisions, with a historic statement of the antiquity of the rule, is found in the case of Castle v. Rickly, 44 Ohio St., 490.
The latest decision is that of Ewan v. The Brooks-Waterfield Co., 55 Ohio St., 608.
It is claimed by counsel for plaintiff in error that this rule of law so well established in Ohio, has been abrogated by certain provisions of the Negotiable Instruments law enacted by the legis lature of this state prior to the execution of the promissory note here in controversy.
Counsel for plaintiff in error contend that such is the legal effect of two sections of said law, viz., Section 3173/4 and Section 31734, Revised Statutes.
It is said in favor of this view, that the purport of these sections is that where a person places his name on the back of a negotiable instrument before delivery thereof, he must be conclusively deemed an indorser in the technical legal sense.
The claim is untenable, as appears by the very language of said sections. The name must be placed upon the instrument otherwise than as maker, drawer or acceptor, to make the signer such indorser.
We have seen that the rule of law independent of the statutes, is that where one places his name on a promissory note prior to its delivery, it is presumed that he is a maker thereof, unless he shows a different agreement to the contrary, between the parties.
He is not placing his signature upon the note as an indorser, but as a maker; he is not placing his name upon it “otherwise than as maker, drawer or acceptor thereof.”
It will be noticed that Section 3173/4 applies equally to a case where a name is placed on a note after its delivery, and to a case where it is so placed before its delivery, to the payee.
The Negotiable Instruments law removes all questions as to the status of the person so placing his name on the note “otherwise than as maker, drawer or acceptor,” by declaring he shall be deemed an indorser, “unless he clearly indicates by appropriate words his intention to be bound in a different capacity.”
Section 31734 covers only cases where one not otherwise a party to an instrument places thereon his signature in blank before delivery, and provides that he shall be held liable as an indorser.
The phrase “a person not otherwise a party” occurs in this section, and of course means not “maker, drawer or acceptor,” mentioned in the preceding section. The two sections are to-be read together and considered as a whole. The key is the word “party.”
There is nothing in these sections which sets aside the rule stated in Ewan v. Brooks-Waterfield Co., supra, that a person placing his name on a negotiable instrument prior to its delivery is presumed to be a maker, as surety.
What was notice to plaintiff that defendants had signed their names on the back of the note, or in popular parlance, had “indorsed” the note for accommodation merely, other than information to plaintiff that defendants were merely sureties on the note ?
The supreme court in Ewan v. Brooks-Waterfield Co., as hereinbefore stated, accurately gives the legal definition of an indorser and his relation to the note.
Another definition of a technical indorsement is found in Richards, Exr., v. Waring et al., 39 Barb., 42; Eaton & Gilbert Neg. Instruments, 319.
Hence, a contract of guaranty is not an “indorsement.” Trust Co. v. National Bank, 101 U. S., 68; Ridley et al. v. Hightower, 112 Ga., 476, 37 S. E. Rep., 733.
The words “indorse” and “indorsee” have a popular, as well as a technical meaning. Redden v. Lambert, 112 La., 740.
There is nothing in our view of the law which in any way conflicts with Sections 3173/2 or 31732, Revised Statutes. The whole matter is made very clear and simple by assigning to these sections their function, which is to define the status of irregular indorsers of negotiable paper, that is, the status of those who sign their names on the back of such instruments, or in the popular parlance, “indorse” them, but not as makers, drawers or acceptors.
The Negotiable Instruments act did not change the legal meaning of the term indorser. Clearly, it intended to preserve the distinction which had heretofore existed, otherwise there would have been no necessity for the two sections, which provide for the liability of a general indorser, and the liability of a regular indorser.
If the legislature proposed to make no distinction between the party who places his name upon the back of a note before delivery, and one who does so thereafter, as a means of transfer in the chain of title, it would have done so by an explicit statement to that effect. This was done by the California Statute, Section 3117. Bank v. Babcock, Jr., 94 Cal., 96, 29 Pac. Rep., 414. Or, as was provided by statute in Massachusetts, statutes of 1874, Chap. 404, 18 L. R. A., notes, 34, a party who places his name upon the back of an instrument before delivery is the original promisor, with the rights of a surety. As such, he is primarily liable upon the instrument, and absolutely required to pay it.
This holding is in accord with a recent decision of the Supreme Court of North Carolina, under the Negotiable Instruments act. Rouse et al. v. Wooten, 53 S. E. Rep., 430.

Opinion:
Spear, J.
Whether or not the answer avers a defense to the cause of action set up in the petition is the question here. The theory of the defendants' pleading is that Rockfield and Snyder, by writing their names across the back of the note, became indorsers in the' commercial sense, and therefore entitled to notice of demand at maturity of the maker and of non-payment, and, failing that, no liability attached. The theory of the petition is that these defendants, having signed the note before delivery, must be held to have signed with the purpose of giving it credit and of aiding negotiability, and therefore stand as makers, and although their names appear on the back of the instrument, and they are in law sureties, yet they are not indorsers in the commercial sense and therefore not entitled to notice of demand and non-payment. This view is the one adopted by the trial court which incorporated in the judgment entry a finding that the defendants are indebted as joint and several makers of the note, and this is the view taken of the question by the circuit court in affirming the judgment of the common pleas. Which is the correct view is the question we have. And here it is proper to express our obligation to the learned counsel whose ample and luminous briefs have greatly aided in our examination and disposition of the case.
That the conclusion adopted by the lower courts is in accord with the law as held in this state from early times, and with all decisions of this court thus far made, is conceded. The latest deliverance on the subject is the case of Ewan v. The BrooksWaterfield, Co., 55 Ohio St., 596, opinion by Williams, C. J. It is there held that where the name of a third party, a stranger to the note, appears in blank upon the back of the note at the time it takes effect, his undertaking rests upon the consideration which supports the note, and the presumption is that he intended to be liable as a surety, and he will be held accordingly unless it is shown that there was a different agreement between the parties. This conclusion is reached after a careful and somewhat extended review of authorities, many of them decisions of this court, and is supported by strong and convincing argument. While a contrary doctrine, holding such party to be an indorser in the commercial sense, had been held in a number of states, notably Alabama, California, Connecticut, Indiana, Mississippi, New York, Oregon, Pennsylvania and Wisconsin, the Ohio rule, as above indicated, had been the settled common law rule of the states of Arkansas, Colorado, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, North Carolina, Rhode Island, South Carolina, Texas, Utah and Vermont.
The statute referred to is the act of April 17, 1902, known as the Negotiable Instruments act (95 O. L., 162), carried into the Revised Statutes as. sections 3171 to 3178»' inclusive, the particular sections relied upon being 3171, 3173A, 3173^ 3l73k> 3I73(1> 3l74g and 3178a. By the provisions of these sections a negotiable instrument must be in writing and signed by the maker or drawer. The person primarily liable is the person who by the terms of the instrument is absolutely required to pay the same, all others being secondarily liable. A person placing his signature upon an instrument otherwise than as maker, drawer or acceptor," is deemed to be an indorser unless he clearly indicates, by appropriate words, his intention to be bound in some other capacity. Then follows, as to liability, this: Where a person not-otherwise a party to an instrument places thereon his signature in blank before delivery, he is liable as indorser: 1. If the instrument is payable to the order of a third person, he is liable to the payee and to all subsequent parties. 2. If the instrument is payable to the order of the maker or drawer, or is payable to bearer, he is liable to all parties subsequent to the maker or drawer. 3. If he signs for the accommodation of the payee he is liable to all parties subsequent to the payee. Every indorser who indorses without qualification, guarantees to all subsequent holders the genuineness of the instrument, the title, the capacity of previous parties to contract, etc., and engages that on due presentment, the instrument shall be accepted or paid or both, as the case may be, and that, if it be dishonored and the necessary proceedings' on dishonor be duly taken, he will pay the amount thereof to the holder or to any subsequent indorser who may be compelled to pay it. Pre sentment for payment must be made at a reasonable hour on a business day at a proper place, to the person primarily liable on the instrument, or if he is absent or inaccessible, to any person found at the place where the presentment is made. When such instrument has been dishonored by non-acceptance or non-payment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged.
The question at issue very largely turns upon what is meant by the terms of section 3173b the substance of which we here repeat: "Where a person not otherwise a party to an instrument places thereon his signature in blank before delivery, he is liable as indorser," etc. It seems to have been the view of the learned circuit court (see opinion by Dustin, J., 8 O. C. C., N. S., 290), that inasmuch as the liability defined by the rules following the above quoted portion of section 3173b does not differ essentially from the liability attaching to such party under the decisions of this court, that no change in the law can be presumed to have been intended by the general assembly in the enactment of the statute. Also that the subsequent provisions of the sections relating to indorsers and providing what shall be done to fix liability, etc., are not inconsistent with this conclusion because the later sections apply only to general indorsers, and in those sections every indorser is described as such, is called an indorser, while in the earlier section the party described is only to be deemed an indorser, and has the liability of an indorser only to a limited extent. The contention further is that the terms of section 3173/1 forbid the conclusion that such party is to be deemed an indorser in the commercial sense because he must, in order to have that effect, place his name on the back otherwise than as maker, and the rule is and was, that the person so placing his name is a maker unless he shows a different agreement between, the parties.
There is much plausibility in these contentions, and they would seem to be sound were it not for the incorporation of the words "as indorser" in section 31732. Had these words been left out of the section the construction claimed would not seem an unnatural one. But we are required, by the inexorable rule of construction, to give to them some signification, some meaning consistent with a rational purpose in placing them in the statute. The law makers were making law. They cannot be presumed to have been simply dealing with legal terms in a loose, popular sense. The word "indorser" has a distinct, clearly defined legal meaning. An indorser is one who undertakes to be responsible to the holder of the paper for the amount thereof, if the latter shall, at maturity, make legal demand of the payer, and in default of payment, give proper notice thereof to the indorser. The language of the section is plain and free from ambiguity. The words express a clear meaning. The party has placed his name upon the instrument where general indorsers sign. He is not a party to the note, but is a stranger. Section 3173k says he shall be deemed to be an indorser unless he clearly indicates by appropriate words his intention to be bound in some other capacity. He has not so indicated. He has used no words appropriate or otherwise. His status on the paper is, therefore, fixed by the emphatic words of the statute. Then follows the fixing of liability. He is liable "as indorser." And how is that? Why, he must pay when, and only when, proper demand has been made of the maker at maturity and legal notice given him. This is clearly shown by what follows. Every indorser who indorses without qualification engages that on due presentment and dishonor, and due notice to him, he will pay. This expresses the extent of his liability; without these requisites being complied with he is discharged. And, then, as though to cover a doubtful situation, the provision is (section 3171/») that where the language of an instrument is ambiguous because of the signature being so placed that it is not clear in what capacity the person intended to sign, he is deemed to be an indorser. Of the rules prescribed by section 3-173?, it is enough to say that they are not inconsistent with the obligation of the general indorser. He, too, is liable to those who come after him as indorsers or holder. The important question is not to whom is such party liable but in what capacity, in what relation, is he liable?
The contention that the provision (section 3173&) to the effect that every indorser undertakes to pay if the instrument is dishonored and he has due notice applies only to general indorsers, we think untenable. The language forbids it. It is: "Every indorser who indorses without qualification," etc. The word "every" is a term of inclusion. It embraces every party who, by previous provisions, is classed as an indorser unless his indorsement . has been qualified by appropriate words. Nor is the obligation as indorser imposed on the stranger an unreasonable one, for, if not content to assume the position of indorser, the opportunity to indicate upon the paper his intention to be bound in some other capacity is given him.
The contention that these later provisions relate only to general indorsers rests wholly on the assumption that in placing his name on the back in blank the stranger himself fixes his own position and that he has conclusively declared himself a maker; that is, thát he has placed his name as maker. But it seems a sufficient answer to this to say that he has not and could not, by a mere blank indorsement, so place himself, because the statute fixes his position. That position is important only as it relates to his liability, and the statute has said that that liability is "as indorser." An indorser is not a maker or a drawer; not ope primarily liable. This conclusion ignores neither the words: "A person placing his name upon an instrument otherwise than as maker," etc., nor the words: "Where a person not otherwise a party to an instrument places," etc. Both sections must be construed together. Thus construed .they .simply describe a person who is not a party by the terms of the instrument. And he is not, in fact, such party in any possible sense at the time he places his signature. He remains a total stranger until he has placed his name on the back- and then the statute says he is an indorser.
But other considerations enter into the question. It is so much a matter of common knowledge as to make it proper to take judicial notice of the fact, that the act herein considered was enacted because of an effort on the part of the bar of many, if not all of the states of the Union,- to bring about a uniform system of law respecting negotiable instruments. In a substantial measure the effort has been successful. Of the states which had, by judicial decision, adopted the rule prevailing in this state, the legislatures of the following have enacted a Negotiable Instruments act substantially like that of Ohio, viz.: Colorado, Maryland, Massachusetts, North Carolina, Rhode Island and Utah. And it has been enacted also in the states of Connecticut, Florida, Iowa, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Tennessee, Virginia, Washington and Wisconsin. Joyce on Defenses to Commercial Paper, at page 859, gives a list of thirty-two states and territories which have passed the act, including, in addition to the foregoing, the following: , Idaho, Kansas, Kentucky, Louisiana, Michigan, Missouri, Montana, Nebraska, West Virginia, Wyoming. Also Arizona, New Mexico, and the District of Columbia. To these may be added the states of Alabama and Illinois, and the territory of Hawaii. All of these several statutes are not framed, in the particular here under investigation, in the exact language of the Ohio act, but it. is believed that they all embody the same principle, and it is manifest that one prominent motive leading to their enactment was the desire to establish a uniform law on the subject of negotiable instruments. And wherever these acts have received judicial interpretation in the several states this purpose has been recognized. See Fessenden v. Summers, 62 Cal., 484; Fisk v. Miller, 63 Cal., 367; Downey v. O'Keefe, 26 R. I., 571; Thorpe v. White, 188 Mass., 333; 7 Cyc., 673; Bank v. Law, 127 Mass., 72; Toole v. Crafts, 193 Mass., 110; Gibbs v. Guaraglia, 67 Atl., 81; Baumeister v. Kuntz, 42 So., 886; Farquhar Co. v. Higham, 112 N. W., 557; Vander Ploeg v. Van Fuuk, 112 N. W., 807.
That this purpose was prominent in the minds of the members of our general assembly in the enactment of the Ohio act is shown by the title of the act itself, which is: "An act to establish a law uniform with the laws of other states on negotiable instruments." The desirability of such legislation had been long felt by commercial people of our state as well as by the judiciary and the bar at large. Indeed the learned jurist who reported the case of Ewan v. Brooks-Waterfield Co., supra, gives expression to that sentiment in his opinion. True, it is as suggested by the circuit court, that the act covers many phases of the subject and that the title does not apply especially to the subject of indorsement, but inasmuch as this very subject had been the source of irreconcilable conflict between judicial utterances in so many states, and that such differences of judicial interpretation of the common law had been so marked and these differences so recently emphasized by this court, and the importance of uniformity in the law on this particular phase of the general subjects had been so recently pointed out, it is inconceivable, it seems to us, that the general assembly, while treating the subject at large, should have failed to endeavor to establish uniformity respecting the position of indorsers and their liability to others connected with the paper. These considerations, if they stood alone, and if the language of the act were less plain than it is, would impose a duty upon this court to look for ground in the statute warranting the conclusion that the purpose of the act is to bring Ohio into harmony with the other states of the Union on so important a branch of the law as the relation of parties to commercial paper, but we are not compelled to resort to such an effort, for the plain, natural meaning of the language of the sections cited, as we think, fully warrants, if indeed it does not compel, the conclusion hereinbefore indicated, which conclusion is .also supported by a number of the cases hereinbefore cited. See Fessenden v. Summers; Fisk v. Miller; Downey v. O'Keefe; Thorpe v. White; 7 Cyc.; Bank v. Law; Toole v. Crafts; Gibbs v. Guaraglia; Baumeister v. Kuntz; Farquhar Co. v. Higham; Vander Ploeg v. Van Fuuk.
But another purpose seems to us to be indicated by this legislation. Not only were the courts of the country in conflict respecting the attitude and liability of a third party, a stranger, who placed his name in blank on the back of commercial paper, but the situation was in itself an anomalous one, calculated to lead, as it often did lead, to confusion respecting the duty of the holder of such paper with regard to demand and notice. Mistakes in this respect were easy and were frequently made, often resulting in litigation, and, not infrequently, loss. To clear this situation up, and to establish a plain, easily understood rule, and one of universal application, was surely a result of high importance to all who deal in commercial paper; and it seems to us that the desire to accomplish this purpose had much to do with inducing the enactment of the Negotiable Instruments act by our general assembly.
It follows from these conclusions that by force of' sections 3171, 3173/1, 3173Í WM* 3174g and 3178a; of the Revised Statutes, a person who, being a stranger to a promissory note, places his name on the back by blank indorsement, is an indorser of the paper and can not be held in any other capacity. As such he is entitled, in order to render him liable, to notice of demand upon those who are primarily liable, and failing such demand and due notice to him, he is discharged. The answer, therefore, stated a defense, and the sustaining of the demurrer and rendering judgment for the Bank upon the note was- error. Judgment reversed and cause remanded.
Reversed.
Si-iauck, C. J., Price, Crew, Summers and Davis,. JJ., concur.