Court Opinion

ID: 7277853
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:02:20.988539+00
Date Added: 2024-06-11T16:18:56.717593
License: Public Domain

Mr. Chief Justice Shepard
delivered the opinion of the Court:
The assignments of error present a question of law only. The contention is that the effect of the first rubber stamp indorsement is to constitute the plaintiff the holder of the note for the credit of the Samuel H. Moore Company, and the second is a guaranty of payment merely by the Samuel H. Moore Company and Samuel H. Moore, and not sufficient to pass the legal title to the plaintiff. The case relied on in support of the contention is Central Trust Co. v. First Nat. Bank, 101 U. S. 68, 25 L. ed. 816. In that case the Wyandotte Bank, under an arrangement with the Cook County Bank, executed its note for $5,000 to the order of the latter bank. The arrangement was that the Wyandotte Bank should execute the note, and have the same discounted by the Cook County Bank. The proceeds were to be entered to the credit of the Wyandotte Bank, but not to be drawn against so as to reduce it below $4,000. To the note were attached as collateral security certain county bonds of the face value of $6,000. The Cook County, Bank was to hold the note as a memorandum, and it was not to be negotiated or separated from the bonds. The sum of $4,000 remained on deposit as agreed, until the Cook County Bank failed and passed into the hands of a receiver. At that time there was an additional credit of the Wyandotte Bank of $868. Before the maturity of the note the Cook County Bank, in violation of the agreement, delivered the note to the trust company, the bonds being retained. The trust company had no knowledge of the agreement concerning the note. The Wyandotte Bank, tendering the balance of $132, filed a bill against the *468receiver and the trust company to compel the surrender of the note and bonds. It was said by the court: “Tbe note was not indorsed to tbe trust company, and it was not therefore taken in tbe usual course of business by that mode of transfer in which negotiable paper is usually transferred. Had it been indorsed by tbe Cook County Bank, it may be that tbe trust company would bold it unaffected by any equities between tbe maker and tbe payee. But instead of an indorsement, tbe president of tbe Cook County Bank merely guaranteed its payment, and banded it over with this guaranty to tbe trust company. The note was not even assigned. There was written upon it only tbe following: ‘For value received, we hereby guarantee tbe payment of tbe within note at maturity, or at any time thereafter, with interest at 10 per cent per annum until paid, and agree to pay all costs and expenses paid or incurred in collecting tbe same. B. F. Allen, President.’ In no commercial sense is this an indorsement, and probably it was not intended as such. Allen bad agreed that tbe note should not be negotiated, and for this reason, perhaps, it was not indorsed. That a guaranty is not a negotiation of a bill or note as understood by tbe law merchant is certain. * * * In this case, tbe guaranty written on tbe note -was filled up. It expressed fully tbe contract between tbe Cook County Bank and tbe trust company. Being express, it can raise no implication of any other contract.”
The conditions of tbe case at bar are quite different. Tbe note was first indorsed in blank by tbe Samuel H. Moore Company and Samuel H. Moore. It was discounted, and tbe proceeds paid over to tbe indorser. Tbe affidavit of defense, following tbe pleas, does not deny tbe execution and delivery of tbe note, nor does it allege any equity of tbe maker against tbe payee. It raises tbe question of legal ownership only by tbe plaintiff. Tbe first indorsement was sufficient to pass tbe title to tbe indorsee. Code sec. 1334. Even if tbe subsequent rubber stamp indorsements are to be considered as restrictions of tbe first, constituting tbe indorsee tbe agent or trustee, merely, of tbe indorser, tbe indorsee has tbe right to bring any action *469thereon that the indorser could bring. Code sec. 1341 [31 Stat. at L. 1400, chap. 854.]
Whether the first indorsement was restricted or qualified by the subsequent indorsements (one unsigned, the other signed), so that any equities of the maker against the payee would be preserved, is a question that does not arise.
We find no error in the judgment, and it will be affirmed, with costs. Affirmed.