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with an attorney it was ascertained that it was not necessary for an acknowledgment to the transfer to be made on the record. The real estate covered by the several mortgages was sold under the first trust deed, and Hawkins became the purchaser. The property did not bring enough money to pay the debts covered by the first and second trust deeds, and the result was that Hawkins demanded of Shields the balance that was due on the Johnson notes, transferred by Shields to Hawkins.

The defense set up by Shields was that at the date of the transfer Shields was not to be responsible as an indorser of the notes. There is no evidence in the record to show that at the time of this transfer there was any understanding at all between Hawkins and Shields as to the latter's liability on the notes as indorser. Hawkins never said anything to Shields about being liable as indorser until after the property was sold under the trust deed, but shortly thereafter he made demand upon Shields for the difference. Shields's testimony on this point is as follows: "There was no agreement between me and you that I was to become responsible. He says: 'I know it, but the place did not bring enough to pay the two notes; but, as your indorsement is on the notes, I will look to you for it.' I says: 'If I was legally or morally responsible to you, I would pay you; but I am neither legally nor morally responsible for it. You did not ask me to indorse them to you, and for that reason I will not pay it, unless the law says so.'" Objection was made to the testimony of Shields, objection overruled, and exception


The court gave the following instruction for the defendant: "The court instructs the jury for the defendant, Shields, that if they believe from the evidence that Shields did not indorse said notes for the purpose of transferring same to E. B. Hawkins, and that the only requirement of Hawkins from Shields was that Shields was to make the trans

fer on the record of the deed of trust, then plaintiff cannot hold Shields on said indorsement, and the jury will find for the defendant." And a verdict was returned for the defendant, and from the judgment entered thereon this appeal is prosecuted.

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In the first place, it may be said there was no evidence at all, even if it were admissible, that the indorser, Shields, was not to be responsible in the event the makers failed to pay the notes. There was in truth and in fact no agreement one way or the other about this matter. Evidently the conversation relating to having the record show a transfer of the notes was for the purpose of complying with § 2794 of the Code of 1906, to the effect that the assignor "shall be required by the assignee to enter the fact of the assignment on the margin of the record of the lien, and in default of making such entry any satisfaction of the lien or instrument evidencing it, entered by the original creditor, shall release the same as to subsequent creditors and purchasers for value without notice," ete.; and under § 2795 of the Code it is provided that "all assignments of any indebtedness secured by mortgage [etc.] shall be entered on the margin of the record of the lien within thirty days from the day of said assignment," and for a failure so to do the assignee "shall forfeit to the debtor 10 per cent of the amount of said indebtedness." We must conclude from the evidence in this case that the conversation had between Hawkins show the assignment, was simply for and Shields, as to letting the record the purpose of complying with the provisions of these two statutes.

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The indorsement of a bill or note is not merely a transfer thereof; but it is a fresh and substantive contract, embodying all of the terms of the instrument in itself. The indorsement of a bill Bills and notesis equivalent to the effect of drawing of a new


bill by the indorser upon the drawee in favor of the indorsee; and the

(100 Miss. 739, 57 So. 4.)

indorsement of a note is equivalent to the drawing of a bill upon the maker, who stands in the relation of acceptor, as it were, in favor of the indorsee. So entirely distinct and independent is the contract of an indorser of a note thereof and the maker that at common law a separate action against each was indispensable. The indorser engages that the bill or note will be accepted or paid, as the case may be, according to its purport; -engagement of but this engagement is conditioned upon due presentment or demand and notice. It also engages that it is in every respect genuine, that it is the valid instrument it purports to be, that the ostensible parties are competent, and that he has the lawful title to it and the right to indorse it. Such is the nature and effect of the contract of indorsement as shown by all of the authorities.


As between the indorser and indorsee there is no difference in the contract of indorsement, so far as the rights and liabilities of the

-time of making-effect.

indorser are concerned, when the indorsement is made before and when made after maturity; the only difference being that, when the indorsement is made before the maturity of the bill or note, the time of payment is fixed by the terms of the instrument itself; but when the indorsement is made after maturity, payment must be demanded of the payor within a reasonable time and notice, in the event of a refusal given to the indorser in order to charge him. In such an instance the instrument is regarded as being equivalent to one payable on demand. Dan. Neg. Inst. 5th ed. § 611, and authorities cited in notes; 7 Cyc. 822, et seq; Baskerville v. Harris, 41 Miss. 535.

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they should be left for the ascertainment and judgment of the jury under proper instructions from the court. Further, that when the facts are ascertained it is for the court to determine what is reasonable time as a matter of law. Dan. Neg. Inst. § 612; Baskerville v. Harris,


It is elementary that parol evidence is never ad- Evidencemissible to contra- parol-to vary writing. dict or vary the terms of a valid written instrument. While this general principle is admitted to be applicable to all contracts written out in full, some authorities are not willing to apply this principle to those contracts which are raised from implication by the operation of law, such, for instance, as indorsements in blank. Such seems to be the rule in Pennsylvania, North Carolina, Florida, Colorado, and Connecticut; but this doctrine is certainly opposed to the great weight of authority, and also to the better reason. When it appears from an inspection of the paper that the party is an indorser, there seems to be no just ground for the distinction taken between the implied contract from his mere name thereon written and contracts written out in extenso. The signature of the indorser upon the bill or note is as marked a manifestation of the intention of the party as if the contract were set forth in express words. All of the authorities hold that, though there be nothing but the indorser's signature, the indorser's contract is as fully expressed as that of the drawer of the bill or maker of a note payable to bearer; and it is a general rule, supported by the great weight of authority, that the indorser in a suit brought by the indorsee, -varying inwhether mediate or dorsement on remote, cannot show by parol that it was agreed that the indorser should not be liable, and that his indorsement was without recourse on him. Brown v. Spofford, 95 U. S. 474, 24 L. ed.


508; Martin v. Cole, 104 U. S. 30, 26 L. ed. 647; Dan. Neg. Inst. § 709; Tiedman, Com. Paper, § 274. Indeed, this is no new question in this state, as has been so declared by this court. Baskerville v. Harris, supra.

In denying the admissibility of parol evidence to vary or to contradict the terms of a contract of indorsement, we, of course, do not extend this rule, so as to exclude evidence offered to show want or failure of consideration, or in cases of irregular indorsement (Thomas v. Jennings, 5 Smedes & M. 627; Polkinghorne v. Hendricks, 61 Miss. 366; Holmes v. Preston, 70 Miss. 152, 12 So. 202; Richardson v. Foster, 73 Miss. 12, 55 Am. St. Rep. 481, 18 So. 573; Pearl v. Cortright, 81 Miss. 300, 33 So. 72), or to impeach the original or present indorsement on the ground of fraud, nor to exclude the parol evidence to the effect that the indorsement was upon trust for some special purpose, as from a principal to an agent, or for collection merely, or as an escrow upon an express condition that has been complied with, and in cases of fraud, and perhaps in other instances.

The evidence in this case shows that the indorser wrote his name in blank across the back of the notes and delivered the same to a bank, when he hypothecated these notes as collateral security for an accommodation extended by the bank; that when he paid the bank its debts

these notes were surrendered to the

indorser, Shields; that the indorser did not erase his indorsement, but the same remained on the notes, and when, subsequently, he made the contract with the appellant, Hawkins, he, the indorser, did not rewrite his name or reindorse the notes, but delivered the notes with the old indorsement thereon,-it being a blank indorsement. It was not at all necessary to rein


dorse the notes. The Note-second delivery of the notes original inwith the old in- effect. dorsement thereon


was an adoption of the former indorsement, and was equivalent to a new indorsement. No authority is needed for so obvious a proposition.

The instruction given for appellee was in direct conflict with this opinion, and the cause is reversed.


Admissibility of parol evidence to vary or explain the contract implied from the regular indorsement of a bill or note.

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III. Accommodation indorsers:

a. In general:

1. Theory of regular indorsements, 785.

2. Theory of irregular indorsements, 789.

b. Actions between original parties, 790.

IV. Qualified indorsement:

a. Indorsement without recourse, 794.

b. Indorsement "with recourse," 795.

c. Indorsement "for collection" or "for account," 796.

d. "Without recourse" between indorsers' signatures, 797.

I. Introductory.

The admissibility of parol evidence to vary or explain the contract implied from a regular indorsement cannot be stated in any general way. There are several elements which have a bearing upon the admissibility. The circumstances under which the indorsement was made, the question as to whether the rights of a bona fide holder are involved, and the character of the evidence, are the three chief elements to be considered on the question. As regards the circumstances under which the indorsement was made, indorsements may be divided into (a) those made by a holder of the instrument for value upon a transfer of the same in the ordinary course of a commercial transaction, and (b) accommodation indorsements.

The present note deals only with regular indorsements. This limitation is particularly important in its relation to accommodation indorsements. Accommodation indorsements are sometimes regular and sometimes irregular. The present discussion is confined to those that are regular in form, that is, an indorsement appearing after the indorsement of the payee. II. Instruments regularly executed and transferred.

a. Majority rule.

1. In general.

When an instrument which has had a valid inception in the hands of the payee is by such payee or subsequent indorsee transferred with the intent to pass the property therein, and un

V. Evidence to show absence of contractual intention or limited contractual intention:

a. In general, 798.

b. Indorsement for collection, 799.

c. Indorsement for collateral security, 801.

d. Indorsement to transfer to true owner, 801.

e. Indorsement to evidence pay

ment, 802.

VI. Negotiable Instruments Law, 802. VII. Identification indorsements, 803. VIII. Ambiguous indorsements, 803.

qualifiedly indorsed by such transferrer to evidence the transfer, the decided weight of authority holds that the contract implied from such indorsement, whether it is made in blank or in full, cannot, even as between the parties, be varied or explained by parol evidence of a prior or contemporaneous agreement.

United States.-Bank of United States v. Dunn (1832) 6 Pet. 51, 8 L. ed. 316 (see Rose's notes to this case); Martin v. Cole (1881) 104 U. S. 30, 26 L. ed. 647; Bank of Alexandria v. Deneale (1824) 2 Cranch, C. C. 488, Fed. Cas. No. 846; Van Vleet v. Sledge (1890) 45 Fed. 743 (in full).

The holding in Susquehanna Bridge & Bank Co. v. Evans (1824) 4 Wash. C. C. 480, Fed. Cas. No. 13,635, that parol evidence is admissible, is overruled by the above decisions of the United States Supreme Court.

Alabama.-Sommerville v. Stephenson (1831) 3 Stew. 271; Hightower v. Ivy (1835) 2 Port. 308; Tankersley v. Graham (1845) 8 Ala. 247; Carlton v. Fellows (1848) 13 Ala. 437; Day v. Thompson (1880) 65 Ala. 269 (in full); Preston v. Ellington (1883) 74 Ala. 133.

California.-Goldman V. Davis (1863) 23 Cal. 256; Citizens' Bank v. Jones (1898) 121 Cal. 30, 53 Pac. 354.

Colorado.-Martin v. Cole (1876) 3 Colo. 113, affirmed in (1881) 104 U. S. 30, 26 L. ed. 647; Dunn v. Ghost (1879) 5 Colo. 134; Doom v. Sherwin (1894) 20 Colo. 234, 38 Pac. 56; Torbert v. Montague (1906) 38 Colo. 325, 87 Pac. 1145.

Connecticut.-Dale v. Gear (1871) 38 Conn. 15, 9 Am. Rep. 353; Hopkins v. Merrill (1907) 79 Conn. 626, 66 Atl. 174; SCHINE V. JOHNSON (reported herewith) ante, 744.

Georgia.-Bartlett v. Lee (1863) 33 Ga. 491; Meador v. Dollar Sav. Bank (1876) 56 Ga. 605; Dunn v. Welsh (1879) 62 Ga, 241 (case involved a New York contract). See Georgia statute discussed in II. b, 1.

Illinois.-Mason v. Burton (1870) 54 Ill. 349; Skelton v. Dustin (1879) 92 Ill. 49; Courtney v. Hogan (1879) 93 Ill. 101; Johnson v. Glover (1887) 121 Ill. 283, 12 N. E. 257; Hately v. Pike (1896) 162 III. 241, 53 Am. St. Rep. 304, 44 N. E. 441; Cozzens v. Chicago Hydraulic-Press-Brick Co. (1897) 166 Ill. 213, 46 N. E. 788 (obiter); George E. Lloyd & Co. v. Matthews (1906) 223 III. 477, 7 L.R.A. (N.S.) 376, 114 Am. St. Rep. 346, 79 N. E. 172; Kimmel v. Weil (1901) 95 Ill. App. 15; Second Nat. Bank v. Woodruff (1904) 113 Ill. App. 6; First Nat. Bank v. Heeb (1914) 188 Ill. App. 194. This rule was applied to an indorsement by a man who married the payee in Beattie v. Browne (1872) 64 Ill. 360.

Indiana.-Wilson v. Black (1843) 6 Blackf. 509; Bowers v. Headen (1853) 4 Ind. 318; McGaughey v. Elliott (1862) 18 Ind. 121; Parker v. Morton (1867) 29 Ind. 89; Campbell v. Robbins (1868) 29 Ind. 271; Lee v. Pile (1871) 37 Ind. 107; Holton v. McCormick (1873) 45 Ind. 411; Smythe v. Scott (1886) 106 Ind. 245, 6 N. E. 145; Brown v. Nichols, S. & Co. (1889) 123 Ind. 492, 24 N. E. 339 (dictum).

8 Me. 213, 23 Am. Dec. 499; Smith v Frye (1837) 14 Me. 457; Crocker v. Getchell (1844) 23 Me. 392; Goodwin v. Davenport (1860) 47 Me. 112, 74 Am. Dec. 478. The doctrine of these cases is overruled by the later cases in this state. See infra, II. b, 1.

Iowa.-It is not clear whether the indorser in Porter v. Moles (1911) 151 Iowa, 279, 131 N. W. 23, was a regular indorser, but apparently this was the fact. In that case parol evidence was held inadmissible to vary the contract of a blank indorser under the Negotiable Instruments Law.

Kansas.-Doolittle v. Ferry (1878) 20 Kan. 230, 27 Am. Rep. 166 (in full); Guaranty Invest. Co. v. Gamble (1918) 102 Kan. 791, 171 Pac. 1152.

Michigan.-Newberry v. Trowbridge (1865) 13 Mich. 263; Ortmann v. Canadian Bank (1878) 39 Mich. 518.

Minnesota.-Levering v. Washington (1859) 3 Minn. 323, Gil. 227 (note given to assignees of maker and by them indorsed, to pay debt of maker); Borup v. Nininger (1861) 5 Minn. 523, Gil. 417; Kern v. Von Phul (1862) 7 Minn. 426, Gil. 341, 82 Am. Dec. 105; First Nat. Bank v. National Marine Bank (1873) 20 Minn. 63, Gil. 49; Coon v. Pruden (1878) 25 Minn. 105; Knoblauch v. Foglesong (1888) 38 Minn. 352, 37 N. W. 586; Farwell v. St. Paul Trust Co. (1891) 45 Minn. 495, 22 Am. St. Rep. 742, 48 N. W. 326; Clarke v. Patrick (1895) 60 Minn. 269, 62 N. W. 284; Giltner v. Quirk (1915) 131 Minn. 472, 155 N. W. 760; Lake Harriet State Bank v. Miller (1917) 138 Minn. 481, 164 N. W. 989.

Mississippi.-Baskerville v. Harris (1867) 41 Miss. 535; HAWKINS V. SHIELDS (reported herewith) ante, 760.

Missouri.-Rodney v. Wilson (1877) 67 Mo. 123, 29 Am. Rep. 499; Beeler v. Frost (1879) 70 Mo. 185; Lewis v. Dunlap (1880) 72 Mo. 174; Howser v. Newman (1896) 65 Mo. App. 367; First Nat. Bank v. Korn (1915) Mo. App. 179 S. W. 721; People's Bank v. Baker (1917) Mo. App.

193 S. W. 632; Eaves v. Keeton (1917) 196 Mo. App. 424, 193 S. W. 629.

New Hampshire.-Barry v. Morse (1824) 3 N. H. 132.

New Jersey.-Foley v. Emerald & P. Brewing Co. (1898) 61 N. J. L. 428, 39 Atl. 650. See Chaddock v. Vanness (1871) 35 N. J. L. 517, 10 Am. Rep. 256 and Johnson v. Ramsey (1881) 43 N. J. L. 279, 39 Am. Rep. 580, infra, II. b, 1.

New York.-Bank of Albion v. Smith (1858) 27 Barb. 489; Washington Sav. Bank v. Ferguson (1899) 43Maine.-Fuller v. McDonald (1832) App. Div. 74, 59 N. Y. Supp. 295; Hod

Louisiana.-Helm v. Ducayet (1868) 20 La. Ann. 417 (obiter).

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