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the estimates now due and unpaid, aná hereafter Knapp, Secretary... Gahren, Dodge & Maltby, to become due; this ten per cent. (10%) to be by J. W. Butler, Vice President.' paid as and when these estimates are collected.
At the time Gahren, Dodge & Maltby unThe certified pay rolls and bills for supplies and materials necessary to carry on the work dertook the work there was an unsettled will be paid out of each estimate as it becomes pay roll due the men who had been employed due, and Gahren, Dodge & Maltby agree and by Garrettson on the work. This payroll guarantee that they will not remove any of their plant from the site of the work without the was for the month of August and until about consent of Citizens' Trust & Guaranty Com- the 17th of September. Gahren, Dodge & pany of West Virginia. Citizens' Trust & Maltby, under their contract with appellant, Guaranty Company of West Virginia agrees to retained in their employ the men who had sublet the work to Gahren, Dodge & Maltby upon the foregoing terms and conditions, and worked for Garrettson, and to whom the it is further understood that if the total cost money due on this pay roll was going. of completion by Gahren, Dodge & Maltby be will be observed from the foregoing writings less than $55,000, then one-half of the difference between that cost and $55,000 shall be paid that Gahren, Dodge & Maltby agreed that to Gahren, Dodge & Maltby in addition to the they would furnish not only the cash necesten per cent. heretofore mentioned. "This agreement is based upon the approval roll for August and September, 1912, but also
sary for paying off Garrettson's unpaid payof the chief of engineers of the War Department of the United States government, and also up- all future pay rolls during the progress of on the annulment of the contract of Garrett- the work of construction; and, in addition, son, and the assumption of the same by Citizens' that they would furnish the necessary labor Trust & Guaranty Company of West Virginia, as surety for W. F. Garrettson. It is under and material and perform the work of comstood and agreed by the parties hereto that pleting the construction of the lock and dam. Gahren, Dodge & Maltby shall take care of and For the repayment of the sums advanced by pay the payroll on this work until such time Gahren, Dodge & Maltby to discharge the as the estimates received from the government exceed the pay rolls paid.
Garrettson and future pay rolls, as well as “In witness whereof Citizens' Trust & Guar- the cost of material, the above writings proanty Company of West Virginia has caused this vide that appellant should turn over to them instrument to be signed in its behalf by R. J. A. Boreman, its first vice president, and its all amounts received from the government corporate seal to be affixed and attested, by J. on the Garrettson estimates for August and H. Knapp, its secretary, this 17th day of Sep- September, 1912, and all subsequent estitember, 1912, and Gahren, Dodge & Maltby have caused its corporate name to be hereunto mates, and, in addition, that they should resigned by J. W. Butler, its vice president, this ceive 10 per cent. of the amount of each of 17th day of September, 1912. Executed in these estimates as a bonus; and, further, quadruplicate. (Signed] Citizens' Trust Guaranty Company of West Virginia, by R. that if the actual cost to Gahren, Dodge & A. Boreman, Firsť Vice President. Attest: J. Maltby for the material and work required H. Knapp, Secretary. [Signed] Gahren, Dodge should be less than the government paid, & Maltby, by J. W. Butler, Vice President."
they would make that much more profit over The second writing, of October 8, 1912, is and above the 10 per cent. they would receive as follows:
as stated; that is if the total cost was less "A-19574. This agreement made this 8th than $55,000, then one-half of the difference day of October, 1912, by and between Citizens' between such total cost and $55,000 would Trust & Guaranty Company of West Virginia, a corporation, of the first part, and Gahren, be paid to Gahren, Dodge & Maltby as a Dodge & Maltby, a corporation, of the state of bonus. New York, of the second part, witnesseth: That After beginning and continuing the work the agreement heretofore entered into by and between the parties hereto, dated the 17th day of construction required of them by the conof September, 1912, for the completion of the tract evidenced by the two writings referred W. F. Garrettson 'contract at dam No. 13, Ken- to from October 8 until about December 31, tucky river, Kentucky, is intended to and does 1912, Gahren, Dodge & Maltby violated the embrace and include the work and materials embraced and included in a contract dated the contract by refusing to proceed further with 7th day of October, 1912, entered into between the work, and removed from the place of Citizens' Trust & Guaranty Company of West work their plant and equipment, which com
, , and , Corps of Engineers, U. S. A., contracting officer pelled appellant to assume and complete the in behalf of United States government, a copy work of construction. By reason of Gahren, of which contract and the specifications, therein Dodge & Maltby's abandoning their contract referred to as amended, is attached hereto. “This supplemental agreement, with the copy
and repudiating their obligations, 'no settleof the contract and specifications above men- ment was ever had with them by appellant. tioned, to be attached to the agreement between On the 22d day of October, 1912, and withthe parties hereto, dated September 17, 1912, for in two weeks after Gahren, Dodge & Maltby, the purpose of more clearly defining and explaining the various things intended to be in under their contract with appellant, began cluded in and covered by the agreement of Sep work on lock No. 13, the company applied, tember 17. 1912.
through its vice president, Butler, to James “In witness whereof the parties have caused A. Wallace, cashier of the appellee, Farmers' their corporate names to be signed hereto and their corporate seals to be affixed and attested Bank of Estill County, for a loan of $5,000 by their proper officers thereunto duly authoriz- to pay the Garrettson pay roll for August ed this 8th day of October, 1912. This supple- and a part of September, 1912. Wallace remental agreement is executed in duplicate, onę fused to make the loan to Gahren, Dodge & copy to be retained by each party. Citizens' Trust & Guaranty Comnany of West Virginia, Maltby, but, upon being told by Butler that Ry.)
CITIZENS' TRUST & GUARANTY CO. v. FARMERS' BANK
ed to have told him appellant was considered , let him have it I would let him have the money. good, and if it would say let him have the So he got them over the phone and talked to money he would make the loan; and, fol- them at some length, and then he [Butler) told lowing a conversation over the long-distance the phone and I asked him if that was Mr.
to I telephone between Butler and Wallace, on Knapp, and he said it was, and I asked Mr. the one part and Knapp, appellant's secre- Butler if that was his voice, and he said it tary and treasurer, on the other, Butler was man, but Butler said that was his voice, so I
was, so I was not acquainted with this gentlefurnished the $5,000 by Wallace. The pro- told Mr. Knapp that Mr. Butler asked the loan ceeds of the loan were not, however, placed for them to pay off the Garrettson pay roll, and to the credit of Gahren, Dodge & Maltby on him to confirm that by letter or wire, and he did
he told me to let him have the money. I asked the books of the bank until after Wallace had both. Mr. Butler signed up the papers at that received a telegram and letter from Knapp time, and after I got the letter and telegram I transmitted and mailed October 22, 1912. placed it to their [Gahren, Dodge & Maltby's] The loan not having been repaid by Gahren, credit. Q. And by whom and on what account
out of your bank Dodge & Maltby, or by appellant, suit was That was to pay laborers and things of that brought against them for the amount thereof kind; that was supposed to be the Garrettson by the appellee bank April 24, 1913. The pay roll.” petition, after setting out the corporate status
Butler, who was introduced in behalf of of the appellant and Gahren, Dodge & Maltby, appellee, testified as follows: contains these averments :
"Mr. Wallace said he would loan it to the “The plaintiff says that on the 22d day of have the money right away; if we don't get it
trust company, but not to us. I said, “We must October, 1912, at the special instance and re- there will be a riot;' and he suggested calling quest of both of the defendants, the plaintiff up the Citizens' Trust & Guaranty Company, loaned to them the sum of $5,000, which amount and Mr. Knapp answered the phone, and I askthey each and both jointly and severally agreed ed him what we were going to do about paying to pay to plaintiff one day after date with 6 off the men. I said, Mr. Wallace has agreed to per cent. interest from date until paid, and loan $5,000 to pay them off.' Mr. Knapp said, plaintiff says that said indebtedness is just and 'Get it for yourself. I said, "They won't loan it due, and that no part thereof has ever been to us; they will loan it to you; and he said, paid, and that no interest thereon has ever been | All right; get it.' I said, 'Is it all right for paid, although same has frequently been de- me to sign a paper? He said, 'Yes.' I said, manded."
'You repeat that to Mr. Wallace;' so I got By the prayer of the petition judgment off the phone and let Mr. Wallace get on.” was asked against each of the defendants Although Wallace's testimony is in most for $5,000, with 6 per cent. interest from respects corroborated by that of Butler, it October 22, 1912, until paid, and for the will be observed that neither of them said plaintiff's costs. Although appellee claims Knapp gave any assurance that appellant to have taken a note for the amount of the would repay the loan or guarantee its payloan, it will be observed that the petition ment. Wallace's testimony goes no farther does not declare upon the note. The appel- than to say that, when he informed Knapp lant filed its separate answer, specifically Butler asked a loan to pay the Garrettson denying each of the above allegations of the pay roll, Knapp said to let him have it, folpetition and praying that the petition as to lowing which he asked Knapp to confirm it be dismissed, and for its costs. The re- that by telegram or letter, which he promsult of the trial has already been stated. ised to do and did, both by telegram and
The single question presented for deci- letter. The substance of Butler's testimony sion by the record before us is: Was the is that when he told Knapp Wallace would $5,000 obtained of appellee by J. W. Butler not let Gahren, Dodge & Maltby have the defor Gahren, Dodge & Maltby a loan for sired loan, but would make it to appellant, which appellant became liable? It is not Knapp said, “All right; get it,” and that claimed by appellee that appellant is liable when he asked Knapp if it would be right to it as surety for Gahren, Dodge & Maltby, for him to sign a paper the latter said, but that its liability for the debt sued on is “Yes.” Wallace does not claim to have that of a joint obligor; the other obligor be heard this statement made by Knapp to Buting Gahren, Dodge & Maltby. If the evi- ler, or to have been told by Knapp that it dence found in the record fails to sustain would be right for Butler to sign a paper. this contention of the appellee, the conten- / It will also be observed that Butler does not tion of appellant that its motion for a per- claim to have asked Knapp if it would be emptory instruction should have been sus right for him to sign appellant's or Knapp's tained must prevail. In order to correctly name to a paper. The inquiry on this point determine the matter at issue it will be nec- was limited to whether it would be right essary to consider what was said and done for Butler to sign a paper, without indiat the time of the transaction in question. cating the character of the paper. The testimony of appellee's cashier, Wallace, J. H. Knapp, appellant's secretary and as to what then occurred is as follows: treasurer, being introduced in its behalf, in
“Mr. Butler came in to get this loan to pay substance, gave the following testimony: up the Garrettson pay roll, and I would not let “Mr. Butler called me over the long-distance him have the money, and he told me he was act- telephone and said that he was in Irvine, Ky., ing for the Citizens' Trust & Guaranty Com- that he had arranged with the Farmers' Bank pany of West Virginia, and I told him they there to borrow $5,000 of money to pay the
that the bank would not let him have the money The letter is as follows:
"Citizens' Trust & Guaranty Company of and I told him that we would be willing to do
West Virginia. that. * * I talked to Mr. Wallace over
"Parkersburg, W. Va., Oct. 22, 1912. the telephone and reiterated to him the same "Farmers' Bank, Irvine, Ky.-Gentlemen: Restatement, that we would send to the bank-ferring to work on dam No. 13, Kentucky river, Butler had told us to send to the bank, and we which is being completed by this company under would do it-this government money whenever contract with the United States government, the it was received and after it was received. Mr. said contract being made by reason of this comWallace did not ask me over the telephone to pany's liability as surety upon the bond of W. guarantee the payment of the note, or anything F. Garrettson, a former contractor, and which of that sort."
work we have subcontracted to Gahren, Dodge Knapp claimed he had never heard of & Maltby, our understanding is with the latWallace's bank prior to that time, and fur- funds to meet the pay roll, which sums are to be
ter concern that they are to advance certain ther said:
covered by estimates received by us from the “Mr. Wallace did not say anything to me government. We are requested by telephone toabout money being borrowed for the guaranty day to wire you agreeing to turn these esticompany, and I said nothing to him about it, mates over to you till reimbursed for sums adand I did not ask him to let Gahren, Dodge & vanced Gahren, Dodge & Maltby for purposes Maltby have the money."
of meeting these pay rolls, and we assume, there
fore, that they have made arrangements with Knapp also testified that it was agreed in you for advancing them the necessary cash. the conversation between him and Wallace Pursuant to this telephonic request, we have what he said with respect to the loan should just wired you as follows: be confirmed by a telegram or letter, both when received from government for reimbursing
“ 'Will pay to you estimates on dam thirteen, of which were on that day, October 22, 1912, funds advanced Gahren, Dodge & Maltby for sent to Wallace, and it is admitted by Wal-pay roll on dam thirteen.
'Citizens' Trust & Guaranty Co. [of W. Va.]' lace that the telegram was received by him
-which wire we now confirm. that day, and the letter on October 24th,
"Yours truly, W. G. Peterkin, President.” two days later. It is patent, therefore, that whatever assurance was made or obliga
[1, 2] The above telegram and letter were tion assumed by appellant in the conversa introduced in evidence by appellee and read tion in question was contained in the tele- and identified by Wallace in giving his tesgram and letter, and further patent that timony. They therefore constitute a part of the subsequent action taken by Wallace in appellee's evidence. They were without obmaking the loan was based upon the con-jection accepted by appellee as confirmatory tents of the telegram and letter, for he em- of the agreement made with appellant through phatically states, and more than once re- Knapp over the telephone, and were retained peats the statement, that the $5,000 loaned by it as evidence of the agreement of the was not placed to the credit of Gahren, parties. This being true, their relation to Dodge & Maltby until October 24th, and aft- this case is the same as would be sustained er the telegram and letter had both been re- by a paper written and signed by the parceived. If the assurance given or undertak- ties to evidence an oral agreement previously ing assumed by appellant as expressed in made, and which, in the absence of a claim the telegram and letter had differed in any of fraud or mistake on its execution, must material respect from the understanding be- be accepted as containing the whole agreetween the parties arrived at over the tele- ment or contract made by the parties. It is phone, the conclusion is inevitable that Wal- a well-known rule of law that, where the lace, as the representative of the appellee parties to a contract have deliberately put bank and a good business man, would have their engagements into writing, so expressed held up the loan and had a further com- as to import a legal obligation, without any munication with Knapp. It is the conten- uncertainty as to the object or extent of their tion of appellant that the only agreement engagement, all previous negotiations and made by Knapp with Wallace and Butler agreements with reference to the subjectover the telephone was that appellant would matter are presumed to have been merged turn over or pay to the appellee bank the in the writing, and with respect to such conestimates on dam 13 when received from the tract it is a well-known rule of law that, in government, or the money received upon the absence of fraud or mistake, parol or exsuch estimates from the government, to re-trinsic evidence is not admissible to vary, imburse it for funds it advanced Gahren, add to, modify, or contradict the terms or Dodge & Maltby for settlement of pay rolls provisions of the contract as put in writing. on dam 13, and the telegram and letter re- But, as said in 17 Cyc. 599: ferred to fully sustain this contention.
"It is, of course, necessary to the application The telegram is in the following words and of the rule just stated that there shall be a comfigures:
plete written contract between the parties, the
writing being of such a nature as to show that "Parkersburg, W. Va., Oct. 22, 1912.
it was intended to evidence their agreement with “Farmers' Bank, Irvine, Ky. Will pay to reference to the subject-matter, and having the you estimates on dam thirteen when received element of mutuality necessary to constitute a from government for reimbursing funds ad- complete contract, but it is not necessary that vanced Gahren, Dodge & Maltby for pay roll the contract shall be in any particular form or on dam thirteen.
that it shall be all contained in one paper, or Ky.)
CITIZENS' TRUST & GUARANTY CO. v. FARMERS' BANK
ing the whole of an agreement between the par- | vine, Ky., five thousand dollars, negotiable and ties which has been delivered, accepted, and un- payable at Farmers' Bank of Estill County, Irder which business has been transacted cannot vine, Ky., value received, with interest at the be varied by parol, even though it is not signed. rate of 8 per centum per annum after maturity Nor does the fact that a contract originally rest- until paid. Indorsers waived demand, protest, ed in parol and was reduced to writing only notice of protest, and all legal diligence to enafter being partly performed preclude the ap- force collection. As per agreement of this date plication to the writing of the rule excluding hereto attached, this money advanced_ is for parol evidence to vary or contradict the writ-Aug. and part of Sept. pay roll of W. F. Garing, for the parol agreement is merged in the rettson at lock 13 Ky. and other small bills, as written one.” Nat. Mutual Benefit Ass'n v. per telephone with Mr. Knapp. Heckman, 86 Ky. 254, 5 S. W. 565, 9 Ky. Law
“Citizens' Trust & Guaranty Co., Rep. 525; Vansant v. Runyon, 44 S. W. 949,
"Of Parkersburg, West Va. 19 Ky. Law Rep. 1981; Gaither v. Dougherty,
"Gahren, Dodge & Maltby, Agent, 38 S. W. 2, 18 Ky. Law Rep. 709; Farmer v.
"J. W. Butler, V. P.” Gregory, 78 Ky. 475; Voss v. Schebeck, 76 S. W. 21, 25 Ky. Law Rep. 481.
For some reason not explained by Wallace Neither the telegram nor letter contains or Butler, the former also caused the latter any intimation of an agreement or undertak- to execute to him the following additional ing on the part of appellant to assume the writing: payment to appellee of the $5,000 loaned by
“Irvine, Ky., Oct. 22/12. it to Gahren, Dodge & Maltby; nor does ei- the Farmers' Bank of Estill Co. ($5,000.00)
“This is to certify that I have borrowed from ther contain any statement or admission of five thousand dollars for the Citizens' Trust & an understanding on the part of appellant Guaranty Company of Parkersburg, West Virthat the loan of the $5,000 had been made to ginia, to pay W. F. Garrettsons pay roll for it. On the contrary, the contents of both Aug. and part Sept. and other small bills
conversation over telephone with Trust Co. and clearly indicate a mere understanding on the this day confirmed by wire to said bank. part of appellant that the loan of the $5,000
“Citizens' Trust & Guaranty Co. was made by appellee to Gahren, Dodge &
"Gahren, Dodge & Maltby, Agents,
"By J. W. Butler, V. P." Maltby, and that appellant was only asked to turn over to appellee, in behalf of Gahren,
If the execution of the note was unauthorDodge & Maltby, the estimates furnished by ized by appellant, the execution of the above the government from time to time upon the writing by Butler was also unauthorized. work done on dam 13, or the money received As neither Wallace nor Butler claims that on such estimates, that they might be ap- their conversation with Knapp over the teleplied to the payment of the loan of $5,000 phone, or any memorandum thereof, was at made Gahren, Dodge & Maltby by appellee, the time or subsequently put in writing, the until discharged.
statement in the note that it was executed It will further be observed that neither was per agreeinent of this day, hereto attachthe telegram nor letter manifests any agree- ed,” must either refer to the independent ment or understanding on the part of appel writing given by Butler or the telegram that lant or Knapp that appellant was to execute day received by Wallace from Knapp. In or become a party to a note or other writing any event, the agreement expressed by the to be taken by appellee for the loan; nor telegram and in the letter from appellant of does either contain any authority to Butler to the same date must be regarded as the one execute such a paper or sign appellant's name made between Knapp, Wallace, and Butler thereto. In this connection it should be re- over the telephone, for both were sent at marked that the understanding of appellant, Wallace's request to confirm what had been expressed in the telegram and letter, which agreed on by telephone, and were without Knapp testified is the only agreement made objection received and accepted by both by him with Wallace and Butler over the Wallace and Butler as confirmatory of the telephone, is in accordance with the contract telephone agreement. it made with Gahren, Dodge & Maltby, a pro
As to the signing of appellant's name by vision of which required it to turn over to Butler to the note and writing, Knapp tesGahren, Dodge & Maltby, to reimburse them tifies that Butler in so doing acted without for moneys they were to advance on the pay authority. Butler alone claims that it was rolls and for supplies, not only the govern- authorized by Knapp, but, as Knapp's tesment estimates, or moneys received thereon, timony as to the agreement made by telein arrears on the work done on dam 13 by phone is corroborated, and that of Butler as Garrettson, but also such estimates or mon-well as Wallace contradicted, by the contents eys as appellant might receive for the work of the telegram and letter, we are constrainof Gahren, Dodge & Maltby; and, as we shall ed to accept the denial of Knapp that he had presently see, there is no contrariety of evi- authorized the signing of appellant's name dence as to the fact that appellant has fully to the note. Moreover, it appears from other complied with the above provision of its con- evidence in the record, which is uncontratract with Gahren, Dodge & Maltby. The dicted, that Knapp himself was without aunote Wallace claims to have taken from But- thority to sign appellant's name to the note; ler October 22, 1912, is as follows:
such authority, under its corporate powers “$5,000.00 Irvine, Ky., Oct. 22, 1912.
and by-laws, being vested in its president and "One day from date we promise to pay to the vice president, and not in its secretary or order of Farmers' Bank of Estill County, Ir- treasurer, both of which positions Knapp holds. As Knapp was without authority to credit of Gahren, Dodge & Maltby in the apsign appellant's name, he was without power pellee bank, and under the latter's agreeto confer such authority upon Butler; so in ment with appellant and Gahren, Dodge & no event can it be said that the note in ques- Maltby were all liable for the debt of $5,000 tion imposes upon appellant any obligation due it from Gahren, Dodge & Maltby, it had to pay it. Doubtless appellee's recognition the legal right to appropriate therefrom an of the want of authority in Butler to sign amount sufficient to pay the debt, or to comappellant's name to the note led to its suing pel its payment from these deposits by that the latter as "for money had and received," company, and, if it did not do so, it was not instead of upon the note.
the fault of appellant.  It is patent, therefore, that appellee's
 It is not material to this controversy own evidence, furnished by the telegram that appellant's liability as surety on the from Knapp, appellant's secretary and treas-original contract made by Garrettson with urer, and the letter from Peterkin, its presi- the United States government would, in the dent, which appellee's cashier and Butler absence of the subcontract it made with Gahaccepted as confirmatory of and manifesting ren, Dodge & Malby, have compelled it to the agreement made by means of the conver- liquidate the pay rolls, liability for which sation between them and Knapp over the was assumed by the latter. It had the right telephone, conclusively shows that the only to protect itself against such threatened loss obligation or undertaking assumed by appel- by making the contract with Gahren, Dodge lant was that it would turn over and pay to & Maltby, without subjecting itself to liaappellee all estimates furnished by the Un-bility to such debts of that company as it ited States government or money it received made with appellee. Not being primarily thereon for work on dam 13 to reimburse liable to appellee for the loan it made Gahappellee for funds advanced Gahren, Dodge ren, Dodge & Maltby, its mere willingness, & Maltby for pay rolls on dam 13. This un- with the consent of Gahren, Dodge & Maltby, derstanding applied, of course, to the esti- to aid the former in securing its debt against mates on the pay rolls of Garrettson then in the latter by paying to it the moneys received arrears and all future estimates or moneys on government estimates, which its contract on the work of Gahren, Dodge & Maltby. with Gahren, Dodge & Maltby had required After accepting without objection the tele- it to pay them, made appellant liable to apgram and letter intended to confirm the con- pellee for nothing more than the amount of tract made with appellant by telephone, and the estimates received by it from the governthus manifesting its approval of the terms ment, and this liability it has fully dischargthereof as set forth in both, appellee is bound ed. On the other hand, if any loss has been thereby, and will not be permitted to contra- sustained by appellee, it has resulted from its dict or modify its meaning. Appellee's ap- own negligence in failing to appropriate to proval of the contents of the telegram and the payment of the debt sued on enough of letter is free of doubt, because shown by the moneys paid it for Gahren, Dodge & its refusal to deposit to the credit of Gahren, Maltby by appellant to accomplish that end. Dodge & Maltby the amount loaned, before
As there is no evidence in the record to the letter of appellant's president was re- sustain the right of recovery attempted to ceived, which did not reach its hands until be enforced by appellee, the peremptory inOctober 24, 1912.
struction directing a verdict for the appel Appellant's compliance with the agree-lant, as asked by the latter, should have been ment made with appellee by telephone and granted by the trial court. This conclusion expressed in its telegram and letter to it renders consideration of the instructions is equally free from doubt. There is no con- given by the court unnecessary. For the trariety of evidence as to the fact that it reasons indicated, the judgment is reversed, paid to appellee for Gahren, Dodge & Maltby and the cause remanded, with directions to the every estimate and all moneys it received circuit court to grant appellant a new trial, from the government for work on dam 13. and for further proceedings consistent with Appellant did not pay appellee the money on
the opinion. estimates for the work of August and part of September, 1912, done by Garrettson on dam 13, for those estimates and the money MARSHALL V. HOLLINGSWORTH. thereon have never been furnished or paid
Oct. 14, by the government and are yet withheld for (Court of Appeals of Kentucky.
1. GUARANTY Om91-CONTRACT--SUFFICIENCY
above his indorsement in blank without his