National Bank v. Dorset Marble Co.

• Decision Date: 01 February 1889
• Parties: NATIONAL BANK OF BELLOWS FALLS v. DORSET MARBLE CO. ET AL
• Court: Vermont Supreme Court

17 A. 42

61 Vt. 106

NATIONAL BANK OF BELLOWS FALLS v. DORSET MARBLE CO. ET AL

Supreme Court of Vermont

February 1, 1889

GENERAL TERM, OCTOBER, 1888.

Heard at the March term of the Windham County Court, 1887, Powers J., presiding. Judgment for the plaintiff, and exceptions by the defendants. The action was assumpsit, plea, the general issue. The defendants were sued as the joint makers of three promissory notes. The notes were executed by the Dorset Marble Company, and made payable to the order of J. H Goulding, treasurer. On the back of each note was written in blank the name of J. H. Goulding, treasurer, and underneath his name were written, also in blank, the names of the defendants Hawley, Hollister and Gleason.

The result is, the defendants are held as makers, and the judgment is affirmed.

F G. Swinington, for defendants.

OPINION

ROWELL, J.

The court below found, from testimony not objected to, that the defendants, Hawley, Hollister, and Gleason, indorsed the notes before they were used in any manner, for the sole purpose of giving additional security to them, and so procuring them to be discounted by the plaintiff, understanding among themselves and with the maker that the latter was the principal debtor, as the fact was, and they were accommodation indorsers, with the right to demand and notice that indorsers are entitled to, but that the plaintiff had no notice that they claimed to stand as indorsers and not as original promisors.

The plaintiff claims that this finding makes them original promisors, and is conclusive of the case. But without determining whether that is so or not, we put the case on the ground that the defendants take, and treat it as standing solely on what is disclosed by an inspection of the notes themselves in respect of the nature of the obligation that the law presumes that the defendants intended to assume when they indorsed the notes.

Taking this ground, the defendants claim that as their names are indorsed under the name of the payee and not over it, making them what are called regular instead of irregular indorsers, the law conclusively presumes that the obligation they intended to assume is that of second indorsers, and that parol evidence is no more admissible to vary a contract implied by law than to vary a written contract.

There is great diversity of holding in this country as to the nature of the obligation the law presumes a third party to have intended to assume when he indorses in blank commercial paper. But it is not necessary to examine the law of other jurisdictions much, for it is well settled in this State, by a long line of decisions; and although some of them may be obnoxious to criticism as anomalous and illogical, yet they have been so long acted upon by our citizens that they cannot now be disturbed without danger of injustice; and besides, it is often of more consequence that the law should be stable than that it should be...