First Nat. Bank v. Nat. Marine Bank

• Decision Date: 01 January 1873
• Citation: 20 Minn. 49
• Parties: FIRST NAT. BANK OF ST. PAUL v. NATIONAL MARINE BANK OF ST. PAUL.
• Court: Minnesota Supreme Court

Page 49

20 Minn. 49

FIRST NAT. BANK OF ST. PAUL

v. NATIONAL MARINE BANK OF ST. PAUL.

Supreme Court of Minnesota.

Appeal by defendant from an order of the district court, Ramsey county, denying a new trial.

The action was brought on defendant's indorsement of a bill of exchange.

Gilfillan & Williams, for appellant.

Bigelow, Flandrau & Clark, for respondent.

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McMILLAN, J.

The defendant, the payee in the bill of exchange involved in this action, indorsed the same in form to the plaintiff or order, before its maturity and for a valuable consideration. Upon the trial, the plaintiff having rested, the defendant, after the proper preliminary proof, offered in evidence an instrument, of which the following is a copy:

                                      "ST. PAUL, Minn., August 3, 1870
                

"This is to certify that in consideration of the discount allowed on drafts of H. Eames & Co., on L. F. Hodges & Co., of Milwaukee, payable to the order of the National Marine Bank, which I have purchased, or may hereafter purchase, the said National Marine Bank shall not be held responsible as indorser.

                  [5-ct. stamp.]               H. THOMPSON, President."
                

And offered to prove in connection therewith, that at the time when the indorsement of the bill in suit was made, it was verbally agreed between the parties that the indorsement of this draft should come under this contract; to which the plaintiff objected, on the ground that it is incompetent to vary the contract of indorsement by parol. The court sustained the objection and the defendant excepted.

"The defendant then offered to prove that at the time this indorsement was made, the defendant was the owner and holder of the bill of exchange, and offered to sell it to the plaintiff under the foregoing contract; that plaintiff accepted the offer and consented to purchase it under that contract, and upon the terms and conditions stated in it; that thereupon the defendant sold the bill to the plaintiff under that contract, and indorsed it only for the purpose of passing the title; and that on that sale and indorsement, defendant allowed to plaintiff $83.90, as a consideration for receiving it under that contract, and to prove all this, except the said written contract, by oral testimony." The written contract offered in evidence is plain and unambiguous in its terms; its subject-matter is distinctly specified, and cannot by explanation or construction embrace the bill in this action, and it was made and entered into more than three months prior to the execution of the bill of exchange upon which this action is brought. These facts would seem to place it beyond doubt that the only relation or connection of the written contract referred to, with the sale of the bill in suit, is that which may exist by virtue of the alleged parol agreement at the time of the indorsement of the bill.

The facts alleged in the defendant's answer, and of which proof was offered, show only a parol agreement for the sale of the bill under the written contract and upon the terms and conditions stated in it. This parol agreement of sale did not make the written instrument mentioned the contract of sale between the parties; its only effect was to make it, by reference, evidence of the terms and conditions of the parol sale. The only question to be determined, therefore, is, whether, as between the payee of a negotiable bill and his immediate indorsee, when a written indorsement by the payee to the order of the indorsee is made for value and before maturity, evidence of a parol contemporaneous contract that the indorser should not be held responsible, and that the indorsement was only for the purpose of passing the title to the bill, is competent or admissible. The general rule in this state and elsewhere certainly is that the indorsement of a negotiable note or bill before maturity by the payee creates an absolute warranty to the immediate and subsequent indorsees, among other things, that the maker or acceptor will pay it on due presentment when it is due, but that if he does not the indorser will pay it if due notice is given him of such dishonor; and evidence of a parol contemporaneous contract varying or contradicting such indorsement as to any of its terms is not admissible. Kern v. Von Phul, 7 Minn. 426, (Gil. 341;) Dale v. Gear, 38 Conn. 15.

The evidence...