Court Opinion

ID: 3841117
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:10:22.206594+00
Date Added: 2024-06-11T07:40:34.797131
License: Public Domain

This is an appeal from the judgment in favor of defendant Ashley based on a directed verdict in his favor. The action was based upon an ordinary promissory note, upon the back of which was written the following:
"For value received, we hereby guarantee the payment of the written note and waive protest, demand and notice of nonpayment thereof.
                                    "ASHLEY  RUMELIN, "By C.E. RUMELIN."
The presiding judge construed the writing on the back of the note to be a collateral contract to guarantee the payment of the note. He stated:
"This action is not brought on this undertaking but is brought on the note itself. I have become convinced, after very extended argument, that Ashley  Rumelin were not endorsers, as we say in the general business world. The endorsement that appears on the back of this note is not a commercial endorsement *Page 263 
by the firm of Ashley  Rumelin; it is a guaranty contract and they are not sued on that contract; they are sued on the note, sued as endorsers. * * I must hold that the endorsement is one of guaranty and as they are not sued on the guaranty, of course they can not be held. There is nothing for the jury to consider. * *"
The charging part of the allegation is that
"defendants executed and delivered to plaintiff a certain promissory note payable one year after date of the following tenor, to wit";
Then follows the note in full. In order to dispose of the case it is only necessary to consider the order of the judge presiding at the trial directing the verdict.                     REVERSED.
This court has determined that a writing on the back of a note, of the tenor involved in the instant case, constitutes an indorsement with additional liability and is not a collateral contract to guarantee the payment of the note only: Cady v.Bay City Land Co., 102 Or. 5 (201 P. 179, 21 A.L.R. 1367). See, also, National Bank of the Republic v. Price, 65 Utah 57
(234 P. 231, 234).
The indorsement in the instant case was a blank indorsement and was made before delivery of the instrument. This principle is further discussed at great *Page 264 
length in Case v. McKinnis, 107 Or. 223 (213 P. 422, 32 A.L.R. 167). It is there held that an indorsement in blank, similar to the writing here involved, before the delivery of a note, makes the indorsers liable as indorsers, not as makers or guarantors only. This was the holding of this court as early as 1894 when Wade v. Creighton, 25 Or. 455 (36 P. 289), was decided.
Parol evidence is not admissible to vary the liability assumed by defendants as shown by the written instrument itself:Case v. McKinnis, above. The instrument having been set out in full in the complaint, it is the duty of the judge presiding at the trial to define the liability of the maker and the indorsers thereon.
There was a question of fact involved and that was whether or not C.E. Rumelin was authorized to subscribe the name of Ashley  Rumelin to the indorsement. Their liability, if they did sign the indorsement, is fixed by statute. It follows that the court erred in directing a verdict in favor of defendant Ashley.
The judgment is reversed and the cause remanded for further proceedings in harmony with this opinion.
REVERSED AND REMANDED.
RAND, C.J., and McBRIDE and ROSSMAN, JJ., concur. *Page 265