Court Opinion

ID: 3845325
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:18:14.61052+00
Date Added: 2024-06-11T07:40:42.240084
License: Public Domain

This is a proceeding to strike off a judgment, and the inferences and deductions must be limited entirely to the paper (the note) in the case. I agree "no one else could [originally] assign or negotiate the obligation," so, to be effective in the hands of others, it must be assigned or endorsed by the maker-payee. I agree that the writing on the back of it is "a complete, nonseverable, indivisible contract," but I do not agree that it is worded in such manner that no one could properly execute it save the payee," as expressed by the majority opinion. On the contrary, the assignment on the back shows on its face that this appellant, with the maker, could execute it, that he had an interest to assign, and did assign it, and authorized a judgment to be confessed against him. This was the contract of the parties as presented to the bank, honored by the bank, and this court strikes down a part of the contract (the most valuable part) by holding that the signature of appellant "had and could have had no relation to the assignment of the note as [he] had no interest in it to assign." To so hold raises a legal impediment to the right to contract not heretofore existing in the law as to notes of this or any other character.
In agreeing the note as written could not be negotiated or assigned unless endorsed or assigned by the maker-payee, I deny that negotiation or assignment must be through the medium of the printed words on the back. An assignable interest could be acquired otherwise and before the note reached the bank.
The presumption from the use of the words "For value received __________ hereby sell and assign this note" would be that the parties had an interest to assign. To "sell" or "assign" is to transfer a right to another, and to sell or assign a chose in action or chattel personal implies a *Page 594 
warranty of title. In negotiable instruments the mere delivery warrants title in the person delivering.
If, as the words of the contract state, appellant had an entire or qualified title, the fact of the nonappearance in terms of such interest on the back of the note or otherwise attached thereto would not be conclusive that none existed, or prohibit him from assigning, guaranteeing and giving an authority to confess judgment, even though such contract be joined with a similar engagement by the maker-payee.
To illustrate my thought, suppose we take an everyday transaction to show interest, title and assignability, using the three defendants, Ogden, Baker and Bockel for example. They had their own note for $21,000 in the Union National Bank of Johnstown. The Southern Lime  Stone Company, indebted to these parties, or one of them, at their request, executed the note in question, and by a loose assignment, or one attached by clip, transferred it as collateral to the note in the bank. I think the legal effect of this transaction could not be seriously questioned. Ogden, Baker and Bockel then had an interest in the paper. They subsequently concluded, for business reasons, to withdraw their paper from the bank, and to that end induced the latter to accept the Southern Lime  Stone Company paper in its place. This the bank agreed to do if the three parties would guarantee its payment. This was done. Can there be any question but that Ogden, Baker and Bockel then had an assignable interest and the Southern Company still had an assignable interest, and that the assignment in question transferred the entire note with the added clause of guarantee and confession. It was no longer necessary to attach the assignment used when the note was up as collateral when the note was subsequently conveyed or sold.
The bank would lose nothing so far as the note of Ogden, Baker and Bockel is concerned, because it had their guarantee on the back of the Southern Company's *Page 595 
note, with the authority to confess judgment attached. Here the words "for value received," etc., distinctly assert a situation such as described. That being so, does the printed memorandum on the back they admittedly signed become their contract?
The same result would be reached if the same printed form on the back of this note were duplicated immediately below and signed by the three individuals. This printed form, as it stood, was supposed to be exactly what it states, and is an ordinary banking engagement. Ogden, Baker and Bockel assigned the note and guaranteed payment, and the maker-payee reiterated its prior obligation on the face of the paper, limiting the time of entry of judgment to the maturity of the note. Can it be doubted under these circumstances what the liability would be? We emphasize this because we are reviewing a proceeding to strike off a judgment.
Can we as a court, without other evidence than what appears on the face of the papers, hold that these parties had no assignable interest in this note sufficient to guarantee and authorize confession? May we presume from the papers, notwithstanding their signatures to a contract in terms covering them, that they were not bound thereby. Without considering any hypothetical case, when this note was presented to the bank, signed as it was, the bank had a right to believe that the parties, when they sold and "assigned," had an interest to assign, and could do everything they contracted to do in the printed memorandum on the back: assign the note, guarantee its payment, and authorize a judgment. A contract will be construed most strongly in favor of an innocent holder. Banks must rely on the integrity of the written contracts presented to them or cease to do business. The majority opinion must find from an inspection of the papers before us as a legal proposition (1) that the maker-payee was powerless to assign the note or any interest in it in another manner or for another purpose than that expressed through the assignment or endorsement *Page 596 
on the back, or (2) if it is conceded that the note could be assigned or used as collateral, then the conclusion must go farther and hold that, unless that prior assignment (for any purpose) appears in some form with or to the note, the parties, then assignees, cannot assign, guarantee or authorize a confession of judgment as here done, or (3) if it is held that a loose assignment, guarantee and confession may be made, then that the parties cannot join with the maker-payee in the memorandum on the back or (4) that this memorandum, executed as admitted, was ineffectual to bind the parties to the confession.
In considering this last proposition, in addition to the note we have the allegations contained in the papers filed, by virtue of which this judgment is entered. Plaintiff's statement avers: "Plaintiff's claim __________ is further founded upon said instrument and the provisions thereof, signed by the above-named defendants, printed on the reverse side of said note, under the terms of which, the above-named defendants sold and assigned said note on the first day of December, 1922, to the said Union National Bank __________, and which said assignment guaranteed payment of the same at maturity, and in default thereof, authorizes any attorney of any court of record of this state to confess judgment against the above-named defendants in favor of the __________ bank, __________ for the amount of said note, with interest, costs, and attorney's fee of five per cent for collection, waiving exemption __________ as appears by said printed portion on the reverse side of said note hereto attached and made a part of this statement of claim, and which was duly signed by all of the above-named defendants on the first day of December, 1922." And attached to this statement is the affidavit of an officer of the bank averring that the "note was sold and assigned to the Union National Bank __________ by the within named defendants." As a confessed judgment must be self-supporting, it seems to me the facts here averred are sufficient to sustain it. Especially *Page 597 
should this be so when the only matter of record upon which the judgment is stricken down is a motion by defendants' counsel that "the said judgment was confessed __________ upon a declaration filed alleging that the defendant had guaranteed payment of the note filed in said case and had authorized such confession of judgment, when in point of fact the note and the printed assignment on the back thereof shows that the defendant did not guarantee payment of said note and did not sign or execute any warrant of attorney, and there was no authority for the confession of judgment against said defendant."
As we said above, when the company and these three men sold and assigned this note for value to the appellee bank, the presumption was that they had an interest in it to assign. How they got that interest is immaterial on a motion to strike off.
It may be immaterial to this decision whether the note was negotiable or nonnegotiable; that does not determine the effect of the contract on the back of the note. If Baker and others owned an assignable interest or if they at one time owned this note, and the presumption and averment of fact is they had such interest, they could join with the maker-payee in this very assignment and authority to confess. This assignment then speaks in its entirety as to the three men, as well as to the maker-payee who reaffirms what it had already obligated itself to do, modified perhaps as to the date when the judgment might be entered.
I would hold as did the court below, that judgment could not be stricken off, but appellant could proceed to have it opened, thereby obtaining full relief if entitled to it. This would affirm the court below.