Court Opinion

ID: 6652136
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:55:11.624355+00
Date Added: 2024-06-11T15:59:43.079471
License: Public Domain

Irvine, C.,
dissenting.
I adhere to the former opinion. It seems to me that the opinion now held by the majority of the court logically overrules a number of earlier cases. If not, it certainly creates a distinction which is confusing, and which has no reason for its existence. It has been held that, as between the original parties, parol evidence is receivable to vary or to contradict the terms óf a general indorsement, and also that such evidence may be received to show that the liability of those signing the note on its face is other than would be implied from the- place and character of the signatures. The indorsement in this case is no more the expression of a complete contract than is a general indorsement. On its face it is simply an authority to the maker of the certificate to pay the same to R. 0. Outcalt for the benefit in some way of the indorser. It is only by implication of law that these words acquire any of the distinctive features of a contract. To show that the reasons for allowing extrinsic evidence, as between the parties, apply as well to restrictive as to general indorsements the following language from Dye v. Scott, 35 O. St. 194, which has been quoted with approval by this court in Holmes v. First Nat. Bank, 38 Neb. 326, is pertinent: “If there was a contemporaneous contract between the parties upon which the indorsement was made, both reason and justice require that, as between themselves, the actual and not the presumed contract should be enforced; and, as between them, oral testimony should be admissible to prove the contemporaneous contract. This will not necessarily, or even probably, im*470pair the currency or credit of the instrument as commercial paper. Prior parties to it wall not be affected, nor will the rights of subsequent indorsees without notice be impaired or limited in any degree.” The above is a statement of a rule generally prevalent with regard to negotiable instruments. Often they are drawn contrary to the real relations of the parties for the very purpose of giving rights to transferees which could not be ac-quii'ed were the true relations disclosed. A familiar instance is that of an accommodation note or an accommodation indorsement. In the case of the note the contract to pay a certain sum at a certain time is distinctly and fully expressed, and where rights are claimed under the law merchant the liability attaches. But if the payee himself should sue, he would be defeated by extrinsic evidence to show that, as between the parties, the note did not express the contract. In this case no rights are claimed under the law merchant. It is not sought to charge any one upon or through the indorsement. The question is simply whether the Hebron bank sold the certificate to the Lincoln bank. To transfer negotiable paper no compliance with the law merchant is necessary. It may be transferred so as to pass the holder’s rights by assignment like any other chose in action. If it had not been indorsed at all, recovery could be had by proof of a sale. If it had admittedly been first transmitted as a bailment for collection, and the Lincoln bank had after-wards bought it without further indorsement, that fact might be shown. The chief fallacy in the majority opinion lies in treating the case as if rights were claimed under the law merchant, whereas the law merchant is not necessarily involved in the case. The form of the in-dorsement is merely evidence of what the contract was, but it was only a single step in the transaction and is explained by the other evidence and the acts of the parties in such a way as not even to tend to. show a bailment. Other matters are somewhat fully discussed in the former opinion, and I do not care to again refer to them, *471nor shall I enter into a discussion of the authorities, except to the extent of repeating that an inspection of the numerous cases cited in the briefs will show that in nearly all of them extrinsic evidence was considered to ascertain the contract, and that the issue has been treated as one of fact in the light of such extrinsic evidence.
Habbison, C. J., and Ryan, C., concur in the foregoing dissenting opinion.