Hale v. Hitchcock

• Decision Date: 01 March 1896
• Docket Number: 84
• Citation: 44 P. 446,3 Kan.App. 23
• Parties: GEORGE D. HALE, as Administrator of the Estate of Lydia Nichols, deceased, v. J. H. HITCHCOCK et al
• Court: Kansas Court of Appeals

44 P. 446

3 Kan.App. 23

GEORGE D. HALE, as Administrator of the Estate of Lydia Nichols, deceased, v. J. H. HITCHCOCK et al

No. 84

Court of Appeals of Kansas, Northern Department, Eastern Division

March 1, 1896

Error from district court, Shawnee county; John Guthrie, Judge.

Opinion Filed April 1, 1896.

MEMORANDUM.-- Error from Shawnee district court; JOHN GUTHRIE, judge. Action by J. H. Hitchcock and others against George D. Hale, as administrator, on a promissory note. Judgment for plaintiffs. Defendant brings the case to this court. Reversed. The opinion herein, filed April 1, 1896 states the material facts.

Judgment reversed and case remanded.

Jetmore & Jetmore, for plaintiff in error.

Harrison & Adams, for defendants in error.

GARVER J. All the Judges concurring.

OPINION

GARVER, J.:

The note sued on in this case was made payable to John L. Howard, or order, and was, by Howard, transferred by an indorsement as follows: "John L. Howard. I assign this note to W. H. Aldaffer, without recourse." W. H. Aldaffer thereafter, and before maturity of the note, transferred it to defendants in error (plaintiffs below) and indorsed his name on the back thereof. The defendant below contends that the note lost its negotiable character by being assigned to Aldaffer, and not indorsed, and that the plaintiffs below took it subject to all equities and defenses. We think this contention must be sustained. The transfer was not made by a commercial indorsement. The name of Howard cannot be separated from the other writing and held to be an indorsement in blank. All must be taken together, and given legal effect, the same as if the name followed the words of assignment. The negotiability of a note, payable to the person named as payee, or order, is preserved in the hands of a subsequent holder only when it comes to him through regular commercial indorsements. And where a note is transferred without such indorsement the holder is not an indorsee, but an assignee, and, as such, is liable to any defenses existing before the assignment. (Hatch v. Barrett, 34 Kan. 223, 8 P. 129; Briggs v. Latham, 36 id. 205.) It follows that W. H. Aldaffer took the note in question stripped of its negotiable character. In his hands it was the same as a note non-negotiable from the first. As against the makers, he could not restore its negotiability by his own act, so as to transfer it to a subsequent holder freed of prior equities and defenses to which it had become subject. This is not a case where there is merely an immaterial deviation from the ordinary form of an indorsement, as where a note is indorsed to be paid to a certain person, omitting the words "or order." Counsel for the defendants in error argued at some length that such an indorsement does not affect the negotiability of the note. We fully agree with all that is said on that proposition, and do not regard it as an open question in this court. (Halbert v. Ellwood, 1 Kan.App. 95, 41 P. 67.)

The evidence shows, without serious dispute, that the note was given for a special purpose, and that it was flagrantly misappropriated...