Consterdine v. Moore

• Decision Date: 01 July 1902
• Citation: 91 N.W. 399,65 Neb. 291
• Parties: CONSTERDINE v. MOORE ET AL.
• Court: Nebraska Supreme Court

65 Neb. 291

91 N.W. 399

CONSTERDINE

v.MOORE ET AL.

Supreme Court of Nebraska.

July 1, 1902.

Syllabus by the Court.

1. The indorsement upon a note as follows: “Pay to the order of * * * without recourse,” made and signed by the payee,--does not destroy the negotiability of the note, in the hands of an innocent purchaser for value, in the regular course of business.

2. If the maker of a negotiable note pays the same to one who does not and cannot produce the paper, he thereby assumes the burden of proving that the party to whom he pays the money is the owner of the paper, or the authorized agent of the owner to receive the money for him.

3. The agreement, in a mortgage, to pay insurance premiums and taxes on the property mortgaged, will not render the note which it is given to secure nonnegotiable, nor will the agreement that, if the mortgagor fails to pay such insurance and taxes, the mortgagee may declare the whole debt due and payable at once, or may elect to pay the same and declare the whole debt due.

Appeal from district court, Dawson county; Sullivan, Judge.

Action by J. Consterdine against Thomas E. Moore and others. Judgment for plaintiff, and the Bank of Miller appeals. Affirmed.W. L. Hand, for appellant.

Flansburg & Williams, for appellees.

SEDGWICK, J.

This action was begun in the district court of Dawson county to foreclose a real estate mortgage. There was a decree foreclosing the mortgage, and the defendant has appealed.

The note and mortgage were executed by the defendant Thomas E. Moore and wife to the Globe Investment Company. The defendant Bank of Miller afterwards bought the mortgaged property subject to the mortgage, and now defends in this case. Soon after the note and mortgage were executed and delivered the payee, the Globe Investment Company, sold the papers to parties who afterwards, and before the note became due, sold and assigned them to the plaintiff. Afterwards the defendant bank paid the mortgage note in full to the original payee, the Globe Investment Company, but payment has not been made to this plaintiff. The indorsement on the note was: “Pay to the order of _____ without recourse. Globe Investment Company. J. Lowell Moore, Treasurer.”

The first contention is that the plaintiff is not entitled to protection as an innocent bona fide indorsee under this indorsement. This contention cannot be sustained. A blank indorsement, until it is filled up and made special, is equivalent to a bill of exchange payable to bearer. Everett v. Tidball, 34 Neb. 806, 52 N. W. 816; 2 Rand. Com. Paper (2d Ed.) 705, and cases cited. The holder may, at his option, complete the indorsement by inserting the name of the indorsee; and this he can do either before or after he brings suit thereon. Evans v. Gee, 11 Pet. 80, 9 L. Ed. 639;Maxwell v. Vansant, 46 Ill. 58; 1 Rand. Com. Paper, 181. The holder, in filling the indorsement, may write any words over the name of the indorser which do not enlarge his liability as indorser. To fill the blank with the name of the indorsee would restrict the present indorsement, and is not necessary to the negotiability of the note. The case of Gaylord v. Bank, 54 Neb. 104, 74 N. W. 415, 69 Am. St. Rep. 705, is cited as holding a different doctrine. In that case a stranger to the paper, who had the note in his possession as agent of the payee, wrote on the back of the note, “Pay to the order of,” and sent it to the payee, advising her to sell the note and invest the proceeds, and representing to her that he would sell the note for her, and make a more profitable investment of the proceeds. She thereupon wrote her name under the words indorsed on the note, and returned it to the agent, who deposited the same as a collateral security for indebtedness of the copartnership of which he was a member, and did not account to his principal for the proceeds. In an action for conversion, brought against the bank by the payee to recover the value of the note, it was held that instructing the jury to find a verdict for the defendant was error. This conclusion might be justified on...