Court Opinion

ID: 7816360
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:37:40.282467+00
Date Added: 2024-06-11T16:30:36.842603
License: Public Domain

George Eose Smith, J. (dissenting). The question before the court in Spencer v. Halpern, relied upon by the majority, was not the same as that confronting us today. There the issue was whether an assignment purporting to convey all the transferror’s interest in a note amounted to a qualified indorsement at common law. The court held the indorsement to be a qualified one. In the ease at hand we are not concerned with the common law. The statute has greatly sharpened the conception of a qualified indorsement by declaring explicitly that the transferror may use “the words ‘without recourse ’ or any words of similar import. ’ ’ Ark. Stat. Ann. § 68-138 (Eepl. 1957). Hence in the case at hand the narrow question is whether the words of the indorsement, “I hereby assign, transfer, set over and convey all my interest in and to the note, ’ ’ are of similar import to the statutory phrase “without recourse.” I think this question should be answered in the negative, both upon reason and upon authority. The transferror’s real intent is not apt to be open to doubt when the indorsement is prepared by one skilled in the law of commercial paper, such as a banker or a lawyer, for then the draftsman will select whatever statutory language he needs to express his purpose. The ambiguous indorsements, for which today’s decision will become a controlling precedent, are those prepared by laymen not well versed in the law of negotiable instruments. The laity’s unfamiliarity with this field of law, however, is not unlimited. Nearly everyone old enough to be dealing with checks and promissory notes knows perfectly well that he can protect himself against liability upon such an instrument by indorsing it “without recourse.” Hence in the overwhelming majority of cases the parties, if they really mean to bring about the limited liability that is involved in a qualified indorsement, will accomplish that purpose by indorsing the instrument without recourse. It follows as a corollary that the parties, whether learned in the law or not, will not resort to the cumbersome indorsement now before the court as a deliberate device for achieving a transfer without recourse. Thus it seems to me that as a matter of practical thinking and sound policy the majority are demonstrably mistaken in declaring that the language now before us expresses the same intention as the familiar phrase “without recourse.” Nor does the majority’s position have any particular equitable appeal. One who assigns a note or check ordinarily receives value; so there is no injustice in holding him liable upon the instrument if it proves to be worthless. The authorities point to this same conclusion. The decision in Spencer v. Halpern followed what was the minority rule at common law and what is even more decidedly the minority rule under the N.'I.L. The eases were carefully reviewed by the Supreme Court of Nebraska in an opinion that refers to the “decisive majority” of the courts that hold such an indorsement to be unqualified and to the ‘ unanimity ’ ’ that prevails under the N.I.L. Baldwin-Heckes Co. v. Kammerlohr, 123 Neb. 317, 242 N. W. 661. One may infer that the majority view was also favored by Dean J. S. Waterman, a genuine scholar in the law of Bills and Notes. See Waterman, The Assignment and Guaranty of Promissory Notes, 1 Ark. Law School Bulletin 25. I think the rule of Spencer v. Halpern to be unsound. We are not compelled to follow that decision; it was a declaration of the common law rather than an interpretation of the statute. We have recognized the desirability of construing uniform laws in harmony with the decisions in other jurisdictions. Grauman v. Jackson, 216 Ark. 362, 225 S. W. 2d 678. There is every reason for us now to abandon the minority rule and align ourselves with the majority. It is especially regrettable that this opportunity is being lost, for the language of the Commercial Code, Ark. Stat. Ann. § 85-3-414 (Addendum 1961), is so similar to that of the N.I.L. that today’s decision will doubtless apply to the new statute as well as to the old one. Harris, C. J., joins in this dissent.