Packard v. Woodruff
| Decision Date | 27 April 1914 |
| Docket Number | 32-1914 |
| Citation | 57 Pa.Super. 176 |
| Parties | Packard v. Woodruff, Appellant |
| Court | Pennsylvania Superior Court |
Argued March 4, 1914
Appeal by defendant, from order of C.P. Lackawanna Co., dismissing exceptions to report of referee in case of Nathan J. Packard and Moses Packard, copartners, trading as Packard & Co., v C. S. Woodruff.
Assumpsit by holder against indorser of a promissory note.
The case was referred to W. M. Bunnell, Esq., as referee.
The note in suit was as follows:
The referee found as follows:
That the said note was sold outright before maturity, by N. B. Levy & Brother, for a good and valuable consideration, to Packard & Company.
That the said note when due, to wit, on the first day of February, 1909, was duly presented for payment at the bank upon which it was drawn and payment of the same duly demanded, but payment was refused and thereupon the said note was duly protested by a notary public.
It further appears, from the evidence submitted, that the indorsement of C. S. Woodruff was placed upon the said note after delivery to payee, but prior to the time any other indorsement was placed upon the said note, and it further appears that the plaintiffs had no knowledge whatever of the circumstances under which C. S. Woodruff's name appeared upon that note.
The referee found for the plaintiffs for $ 454.37.
Exceptions to the report of the referee were dismissed by the court.
Error assigned was in dismissing exceptions to report of referee.
A. A. Vosburg, for appellant, cited: Eilbert v. Finkbeiner, 68 Pa. 243; Central National Bank v. Dreydoppel, 134 Pa. 499; Barto v. Schneck, 28 Pa. 447; Shafer v. F. & M. Bank, 59 Pa. 144; Lawrance v. Fussell, 77 Pa. 460; Reamer v. Bell, 79 Pa. 292.
H. W. Mumford, for appellees, cited: Epler v. Funk, 8 Pa. 468; Bisbing v. Graham, 14 Pa. 14; Shafer v. Bank, 59 Pa. 144; Thorp v. Mindeman, 123 Wis. 149; Evans v. Freeman, 54 S.E. 847.
Before Rice, P. J., Henderson, Orlady, Head, Porter, Kephart and Trexler, JJ.
Does the use of the words " without recourse to us" by an indorser on a promissory note affect the negotiability of the instrument? Is such an indorsement restrictive or qualified? Are subsequent holders affected with notice or is its use sufficient to put them on inquiry as to any defense between prior indorsers or parties? Does the knowledge of a qualified indorser that a prior indorsement without qualification had been procured through fraud affect the right of his indorsee, who was a holder in due course, to proceed against the indorser without qualification? These are the questions presented by this appeal.
The referee to whom the matters in controversy had been submitted by the court below found as a fact, that the note was sold outright before maturity for a good and valuable consideration to the appellee, who had no knowledge whatever of the circumstances under which the appellant's name appeared on that note. The appellants' second specification of error objects to these findings of fact. Inasmuch as the appellant's paper-book does not contain the evidence that was submitted to the referee we must dismiss this exception and accept the findings of fact of the referee to be correct.
Prior to the act of 1901 it had been held that the use of the words " without recourse" did not affect the negotiable quality of the paper and its use was: (1) to exempt the indorser from liability for payment of the note in case of its dishonor at maturity; (2) a qualified and not a restrictive indorsement; (3) in the usual course of business; (4) that it did not put the indorser on his guard or lead him to suspect that there was anything wrong in the transaction between prior indorsers or the maker and payee; (5) that the holder in due course could not be affected by fraud between prior indorsers or parties: Epler v. Funk, 8 Pa. 468; McDoal v. Yeomans, 8 Watts 361; Bisbing v. Graham, 14 Pa. 14; Craft v. Fleming, 46 Pa. 140; Ridgway v. The Farmers' Bank of Bucks County, 12 S. & R. 256.
The appellant's contention that prior to the Negotiable Instrument Act of 1901 an indorsement " without recourse" was a restrictive indorsement cannot be sustained; nor does the act of 1901 make it a restrictive indorsement. Section 38 of this act provides that a qualified indorsement . . . . may be made by adding to the indorser's signature the words " without recourse," and as to its negotiability the section further provides " that such an indorsement does not impair the negotiable character...
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McLean v. Paddock
...of fraud would unduly impair the negotiability of commercial paper. See Downs v. Horton,287 Mo. 414, 230 S.W. 103; Packard v. Woodruff, 57 Pa.Super. 176 (1914). The blank space for the beginning month of the installment payments, asserted as the third suspicious circumstance, has been discu......
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New Jersey Mortg. & Inv. Corp. v. Calvetti
...N.J. 40, 93 A.2d 367 (1952); Eastern Acceptance Corp. v. Kavlick, 10 N.J.Super. 253, 255, 77 A.2d 49 (App.Div.1950); Packard v. Woodruff, 57 Pa.Super. 176 (Super.Ct.1914). The rationale of these holdings is simply that the free negotiability of paper should not automatically be deterred by ......
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