Court Opinion

ID: 7050792
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:59:55.570364+00
Date Added: 2024-06-11T16:11:43.908766
License: Public Domain

On Petition for a Rehearing.
McBride, J.
— The appellee in this case earnestly insists that a rehearing should be granted. The ground upon which this is asked can be best stated by quoting from the petition. They say: “ The lamented judge, who was the author of the opinion, seems to have overlooked the vital point insisted upon by appellee. * * McIntosh held a dual position; he represented himself, of course, and at the same time he represented De Pauw. * * When De Pauw signed the note at New Albany and sent it to McIntosh at Salem, and failed to send special instructions, and failed to limit the authority of McIntosh, the law is that McIntosh acted as a sort of agent for De Pauw, and whatever McIntosh did with the note would bind De Pauw. * * If De Pauw intended when he put his name to the note to only stand as endorser, the law should hold him to such action as will protect the innocent and unsuspecting.”
The rule of law thus invoked has no application to the facts of this case. It is undoubtedly the law that when one signs a note in blank, or leaves blanks in it necessary to be filled in order to make it a complete contract, and delivers it in this condition, he thereby clothes the holder with implied authority to fill the blanks. And in such case, even if the blanks are filled in violation of the express understanding of the parties, he will be liable to an innocent holder, the note being negotiable. Armstrong v. Harshman, 61 Ind. 52; Cronkhite v. Nebeker, 81 Ind. 319; Randolph Com. Paper, section 181, and cases cited. The authority to fill the blank in such case is derived from the implied agency created by the maker’s act in putting the paper into circulation. Randolph Com. Paper, supra. There is, however, in such cases no implied authority to change the instrument *558in any respect in which it is complete and perfect when it is thus signed and issued. If the instrument lacks nothing to make it a complete and perfect contract, the mere fact that blanks are left in which other stipulations may be written confers no implied authority upon the person to whom it is intrusted to fill such blanks. Coburn v. Webb, 56 Ind. 96; Gothrupt v. Williamson, 61 Ind. 599; Cronkhite v. Nebeker, supra, and numerous cases there cited.
The meaning of the contract created by a blank endorsement of commercial paper is fixed by mercantile law, and the degree of liability assumed by the endorser is as fixed and certain as if its terms were written in full. Judge Elliott, in the case of Campbell v. Robbins, 29 Ind. 271, says : “ ‘ This liability is not expressed, in terms, in a full endorsement any more than it is in a blank one; it is an implication of law arising from each/ and can not, in either case, be varied or qualified by a parol agreement simultaneous with the endorsement.”
It is true, as stated in the original opinion, the courts have recognized an apparent exception to this rule, by holding that it may be shown by parol that the apparent endorser assumed the liabilities of a surety, but as there stated, this can only be shown by showing a mutual agreement to that effect between the payee and the endorser. The maker of the note, to whom it is intrusted for delivery, has no implied authority to make such an agreement for him.
De Pauw, in writing his name across the back of the note and saying nothing as to the character in which he was signing it, assumed the character of endorser, and no other. In that character it was not necessary that he should say anything. It was only necessary for him to speak if he intended the primary significance of that act to be varied. Therefore, in intrusting the note to McIntosh for delivery, he placed in his hands a contract which was fixed, specific and complete in all its terms. There was, therefore, no room for any inference of any implied authority in McIntosh to add *559any thing to it. The implied authority possessed in such cases by the party intrusted with the contract is to complete it. Whatever is necessary to make it a complete contract according to the intention of the parties he may do, but beyond that he can not go.
Filed Jan. 17, 1891.
In this case the only thing needed to complete the contract was delivery, and this was the extent of the authority with which De Pauw had clothed him. Of this the bank was bound to take notice.
It was bound to know that the contract thus presented to them was upon its face a contract of endorsement, and nothing more; and it was also bound to know that if it wished to change the character of that contract it must treat with the party who had made it.
The court did not overlook the point indicated, and is still of the opinion that the case was correctly decided.
Petition for rehearing overruled, at appellee’s costs.