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contract of indorsement, but is to show VI. Negotiable Instruments Law. what the contract was in fact. Texas Several provisions of the Negotiable Baptist University v. Patton (1912) Instruments Law have been considered

Tex. Civ. App. — 145 S. W. 1063. with reference to the admissibility of

An analogous question of some in- parol evidence to vary the contract of terest arose in the case of Abraham v. an indorser. The Negotiable InstruMitchell (1886) 112 Pa. 230, 56 Am. ments Act provides that “a person Rep. 312, 3 Atl. 830. In this case a placing his signature upon an instrusale of property was made, and a note ment otherwise than as maker, drawgiven for the purchase price to one er, or acceptor is deemed to be an inother than the owner, and indorsed dorser unless he clearly indicates by by the payee to the owner for the pur- appropriate words his intention to be pose of transferring the title to the

bound in some other capacity.” This note, merely subsequently, the indors- provision is involved more frequently er was compelled to pay the note, and in cases of irregular indorsers, and brought an action against the real is not, therefore, construed frequentowner to whom it had thus been trans- ly in cases within the scope of this ferred, to recover the amount thus note. It has been viewed, however, as paid. In holding that there could be preventing the introduction of parol a recovery, the court states that the

evidence to vary or explain the condefendant was the real owner of the tract implied from the payee's innote before its indorsement and had

dorsement. Kopf v. Yordy (1916) 200 a right to demand its transfer; that Ill. App. 409; Porter v. Moles (1911) he was present when it was given, and 151 Iowa, 279, 131 N. W. 23 (apparentagreed to take it, and passively assent- ly, although not clearly, the payee's ed to the insertion of the plaintiff's indorsement); First Nat. Bank v. name as payee; that the plaintiff Korn (1915) Mo. App. 179 S. W. might have added the words, "with- 721; Eaves v. Keeton (1917) 196 Mo. out recourse,” to his indorsement, or

App. 424, 193 S. W. 629. made a special agreement with the

See also People's Bank V. Baker defendant for his protection, but the

(1917) - Mo. App. —, 193 S. W. 632. law implies an agreement by the de

Nor can an indorsement by a subsefendant to reimburse the plaintiff in

quent holder be varied or explained case he should pay the note to an innocent holder because of his indorse

by parol evidence. Lyons Lumber Co.

v. Stewart (1912) 147 Ky. 653, 145 ment.

S. W. 376. e. Indorsement to evidence payment. But a contrary view has been taken

It has been held that the payee of as to the admissibility of parol evia note who has indorsed the same may dence under this provision of the statshow that the indorsement was made ute, the evidence being held admissiupon the payment of the note and as

ble. Mercantile Bank v. Busby (1908) evidence of such payment. Spencer

120 Tenn. 652, 113 S. W. 390. v. Sloan (1886) 108 Ind. 183, 58 Am.

The provision that as between the Rep. 35, 9 N. E. 150; Cole v. Smith

immediate parties to the instrument (1877) 29 La. Ann. 551, 29 Am. Rep.

delivery may be shown to have been 343; Davis v. Morgan (1870) 64 N. C.

conditional, or for a special purpose 570; Morris v. Faurot (1871) 21 Ohio St. 155, 8 Am. Rep. 45. The admission

only, and not for the purpose of transof such testimony does not vary or

ferring property in the instrument, has contradict the terms of a writing, for

been considered, and evidence that the the question in such a case is “not as

indorsee agreed to accept the note to the terms of the contract, or the

in suit, and to look alone to the maker nature or extent of the indorser's lia- for its payment, and not to hold the bility, but whether there was any con- indorsers liable thereon, is held not tract at all out of ch any liability to show a conditional delivery within could arise." Morris v. Faurot the meaning of this provision of the (Ohio) supra.

Negotiable Instruments Act. SCHINE

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V. JOHNSON (reported herewith) ante, indorses without qualification, war744.

rants to all subsequent holders in due See Morris-Miller Co. v. Von Pres- course: (1) That matters and things sentin (1911) 63 Wash. 74, 114 Pac. mentioned in subdivisions 1, 2, and 3, 912, supra, V. b.

of the next preceding section; and (2) And see National Newark Bkg. Co. that the instrument is at the time of v. Sweeney (1915) 88 N. J. L. 140, his indorsement valid and subsisting, 96 Atl. 86, and Goldman v. Goldberger and, in addition, he engages that on (1913) 126 C. C. A. 35, 208 Fed. 877, due presentment, it shall be accepted supra, III. b, for interpretation of pro- or paid, or both, as the case may be, vision that, as between indorsers, evi- according to its tenor, and that if it dence is admissible to show an agree- be dishonored, and the necessary proment that indorsers should be liable ceedings on dishonor be duly taken, in a different order than what the sig. he will pay the amount thereof to the natures prima facie import.

holder, or to any subsequent indorser In Smith v. Squires (1901) 13 Mani. who may be compelled to pay it." Reftoba L. R. 360, the court referred to 8 55, erence is also made to § 3060-a 17, of subsec. 2, of the Bills of Exchange Act the Iowa statute relating to the conof 1890, providing that the indorser struction of the contract where the of a bill, by indorsing it, "engages instrument is ambiguous. Subsection that on due presentment it shall be ac- 6 of this section, which seems to be the cepted and paid according to its tenor, only one relating to indorsements, proand that if it is dishonored he will vides that, "where a signature is so compensate the holder ... provid. placed upon the instrument that it is ed that the requisite proceedings on

not clear in what capacity the person dishonor are duly taken.” By § 88

making the same intends to sign, he is this provision is made applicable to

to be deemed an indorser." promissory notes, and the court states

VII. Identification indorsements. that by indorsing the note the defend

An indorsement cannot be shown to ant entered into the engagement or have been for the purpose of identificontract with the plaintiff that an in- cation only.

V. Wissner dorsement thus imports, and the con- (1886) 69 Iowa, 119, 28 N. W. 471. tract is as much a written one as if As, for example, an indorsement merethe statutory engagement had been ly to identify the payee of a bill of written on the back of the note and

exchange to a bank. Thompson v. Mcsigned by the defendant. Accordingly, Kee (1888) 5 Dak. 172, 37 N. W. 367; evidence of a contemporaneous parol Stack v. Beach (1881) 74 Ind. 571, 39 agreement is inadmissible to vary this Am. Rep. 113. contract. This case was followed in In Thompson v. McKee (1888) 5 Emerson v. Erwin (1903) 10 B. C. 101. Dak. 172, 37 N. W. 367, the indorser

Other provisions have also been was assured by the cashier of the payconsidered and held to make the parol ing bank that his name was only deevidence inadmissible.

sired for the purpose of showing who See Guaranty Invest. Co. v. Gamble identified the person to whom payment (1918) 102 Kan. 791, 171 Pac. 1152, was made, and that he should not be supra, II. a, 2.

held liable on the draft if he indorsed See Leahmer v. McCullough (1917) it. 99 Kan. 451, 162 Pac. 297, supra, IV. d. The supreme court of Iowa in Porter

VIII. Ambiguous indorsements. v. Moles (1911) 151 Iowa, 279, 131 Parol evidence has been admitted in N. W. 23, in holding parol evidence certain cases on the theory that the inadmissible to vary the contract aris- contract of the indorsee was ambiging upon the indorsement of a note, uous. Thus, where a note which the refers to the provision of the Nego- indorsee agreed to accept in payment tiable Instruments Law relating to the of the purchase price of certain propliability of a general indorser, and erty was indorsed without recourse providing that “every indorser who by the payee, and thereafter, when.

Geneser

12

presented to the indorsee, who re- "I do request that hereafter any notes fused to accept the qualified indorse- that may fall due in the Union Bank ment, was indorsed again by the payee, in which I am, or may be, indorser, it has been held that these facts may shall not be protested, as I will con: be shown by parol when properly plead- sider myself bound in the same man. ed, since the two signatures render the ner as if the said notes have been or indorsement ambiguous. Goodrich v. should be legally protested," was held Stanton (1899) 71 Conn. 418, 42 Atl. to be ambiguous as to whether it 74.

amounted to a waiver of demand and But see Johnson ,v. Glover (1887) notice; and parol proof was admitted 121 Ill. 283, 12 N. E. 257, and Hately to show that it was the understanding v. Pike (1896) 162 Ill. 241, 53 Am. St. of the parties that the demand and noRep. 304, 44 N. E. 441, supra, II. a, 1. tice required by law to charge the in

Where the payee, in indorsing the dorser should be dispensed with. See note, has used words which are am- also Rose's Notes to this case. biguous, parol evidence is competent A waiver of protest by the payee to explain the meaning. Thus, in Por- upon indorsing a non-negotiable inter v. Kemball (1868) 53 Barb. (N. strument is not a waiver of any right Y.) 467, a payee, who had agreed to whatever, and cannot be held to inwaive demand and notice in indors- clude a waiver of diligence which, uning the note, used the following der the statute, is necessary in order words: “I waive demand of protest.” to impose any liability upon the inThis was held to be ambiguous, and dorser. Burke v. Ward (1895) – Tex. parol evidence admissible to explain. Civ. App. —, 32 S. W. 1047. It is stat

See Ewan v. Brooks-Waterfield Co. ed that if there were any ambiguity (1897) 55 Ohio St. 596, 35 L.R.A. 786, about the words, "protest waived," it 60 Am. St. Rep. 719, 45 N. E. 1094, might be admissible to introduce tes. supra.

timony to indicate the meaning atAnd see generally, IV. a.

tached to them by the parties, but In Union Bank v. Hyde (1821) 6 their significance is well understood, Wheat. (U. S.) 572, 5 L. ed. 333, a and no explanation would be permissiwritten undertaking by the indorser ble that would show that they meant of a promissory note to the effect that "all diligence is waived." W. A, E.

HARRY B. GARRISON et al., Appts.,

V.
WILLIAM NEWTON et al., Respts.

Washington Supreme Court (Dept. No. 2) – May 16, 1917.

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(96 Wash. 284, 165 Pac. 90.) Vendor and purchaser - waiver of performance reasonableness of de..

lay. 1. The consumption of two and a half months in perfecting title after the time fixed for performance of a contract to sell real estate is not unreasonable, if the vendee acquiesced in efforts to perfect the title after the time fixed, and there is no showing of injury by the delay except inability to rent the property because of defects in title.

[See note on this question beginning on page 815.] Pleading amendment of answer — perfect title in time, so as to show abuse of discretion.

that the vendor had been busily en2. There is no abuse of discretion in gaged in perfecting the title, after the permitting amendment of the answer time for performance, with full knowlin an action to rescind a contract to edge and consent of the vendee. sell real estate because of failure to [See 21 R. C. L. 572 et seq.)

(96 Wash. 284, 165 Pac. 90.) Vendor and purchaser

time of per

formance, if he acquiesces in the vendformance.

or's efforts to perfect the title after 3. Where time is not made of the that date. essence of a contract to sell real es

- necessity of demand for performtate, the vendor is entitled to a rea

ance. sonable time in which to perform his 5. After the vendee has waived the contract.

time of performance fixed by a con- waiver of right to rescind.

tract to sell real estate, the vendor will 4. A vendee of real estate waives not be in default until a demand for the right to rescind the contract for compliance with the contract and the failure of the vendor to have his title lapse of a reasonable time to comply perfected at the time provided for per- with the demand.

APPEAL by plaintiffs from a judgment of the Superior Court for King County (Mackintosh, J.) in favor of defendants in an action brought to rescind a contract to sell real estate for delay in perfecting title. Affirmed.

The facts are stated in the opinion of the court.

Mr. William L. Waters for appel- unto said second parties for said lants.

consideration above mentioned, a Messrs. John H. Perry and Daniel

right of way for a road from the Landon for respondents.

northeast corner of said premises Fullerton, J., delivered the opin- across property belonging to the ion of the court:

first parties, and described as the On November 29, 1912, William southwest quarter of the southwest Newton and Katherine S. Newton, quarter of section 15, township 1 his wife, as vendors, entered into an north, range 13 east, which said executory contract with Harry B. right of way shall be along the west Garrison and Katherine S. Garrison, line of said land last described, and his wife, as purchasers, for the sale shall be 16 feet in width, and the of “the following described lands first parties shall put the same in and premises, situated in Wasco passable condition for traffic withcounty, state of Oregon, to wit: The out expense to the second parties, east 25 acres of the northeast quar- provided, always, that in case the ter of the northeast quarter of sec- right of way along the west line of tion 21 in township 1 north, range said land should not be practical or 13 east." The terms and conditions satisfactory to the second parties, agreed upon were as follows:

then said right of way shall be lo"The consideration therefor is cated across said premises along a the sum of $2,000 of which $500 has practical and satisfactory route, to been paid in cash, the receipt where- be determined by said parties. of is hereby acknowledged, $500 Otherwise the third man to be seshall be paid on or before one year lected. after the date hereof, $500 shall be "The first parties hereby covepaid on or before two years after nant and agree to and with the secThe date hereof, and $500 shall be ond parties that, upon payment of paid on or before three years after the sums of money hereinbefore the date hereof, said deferred pay- mentioned, that they will execute ments to bear interest at the rate and deliver to said second parties, of 7 per cent per annum, payable an- their heirs or assigns, or anyone desnually, principal and interest to be ignated by them, a good and suffipaid at the bank of French & Com- cient warranty deed for said prempany, in Dalles City, Oregon.

ises above mentioned, and a deed for "In addition to the conveyance of a right of way for a road as above said property from the first parties provided, which said deed shall warto the second parties, the first par- rant the said premises free and ties further agree to sell and con- clear from all encumbrances whatvey, and do hereby sell and convey, soever, and the first parties agree

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to furnish to said second parties, the plaintiffs had determined to rewithout additional compensation, an scind the contract, and this action abstract of title for said premises, for rescission was instituted on Febshowing the same to be the prop- ruary 10, 1916. The court found erty of the first party free and clear that plaintiffs were not entitled to a from encumbrances thereon.

rescission, and gave judgment “The second parties, for them against them for the final payment selves, their heirs and assigns, agree due under the contract. The plainto and with the first parties to pay tiffs appeal. the sums of money above mentioned Appellants assign as error the acat the times and places hereinbefore tion of the court in permitting restated."

spondents to amend their answer on The plaintiffs promptly met all the trial by setting up an allegation payments falling due until final pay- that respondents had, from Novemment of $500, with interest, falling ber 29, 1915, to February 16, 1916, due November 29, 1915, which sum with the full knowledge and conthey deposited in escrow on that sent of appellants, been busily endate in the banking house of French gaged in perfecting title to the land & Company, and made demand for in controversy, and that they had their deed and abstract of title. A been delayed by reason of the diladeed from plaintiffs to defendants, toriness of the attorney who repreand an abstract of title, were sented both the mortgagee and the transmitted by plaintiffs to the appellants; and, by way of cross bank. Examination of the deed complaint, asked judgment against showed that it had been drawn upon appellants of the sum of $535. The a form used in the state of Wash- amendment was objected to on the ington, and was inadequate under ground of surprise, and that it inthe Oregon laws. An examination volved a new issue after the issues of the abstract disclosed that there had been fully settled. The court was outstanding against the prop- offered to grant a continuance, on erty a mortgage for $1,000, that the terms to abide the final outcome. land had been sold for the delin- The appellants, in view of the ruling quent taxes of 1912, and, of the sub- as to terms, preferred to go to trial. sequent taxes, none except those for We think there was

Pleading the year 1913 had been paid. The no prejudicial er- amendment of vendors were notified of the defects ror committed. The answer-abuse

of discretion. in the title, and demand was made

amendment was that the title be cleared and a quit- germane to the issues in the case, claim deed executed for the right of

and its allowance does not show any way for a road provided for by the

abuse of the discretion reposed in contract. At the same time, a prop

the trial judges in such matters. er form of deed for the state of Ore

Moreover, the plaintiffs proceeded gon and a quitclaim deed for the

with the trial without taking adright of way were prepared and for

vantage of a continuance offered warded to the defendants for execu

them by the court. tion. The deeds were executed by

The only other error assigned is defendants, and returned to the

the granting of a nonsuit against bank, but defendants insisted the appellants. This involves a considmortgage was only a technical mat

eration of the evidence, which is ter and they would have it removed made up in large part of the correjust as soon as they were in a posi- spondence passing between the partion to do so.

ties and their attorneys, and necesFinally, plaintiffs, on January 18,

sitates a frequent recurrence to 1916, about fifty days after they

dates. The evidence shows that, at had deposited their final payment in the time of entering into the conescrow, notified defendants that, tract in 1912, respondents were the in view of their failure to perform, owners of some 68 acres of land in

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