Word v. Ellwood

• Decision Date: 09 November 1896
• Citation: 37 S.W. 414
• Parties: WORD v. ELLWOOD.<SMALL><SUP>1</SUP></SMALL>
• Court: Texas Supreme Court

37 S.W. 414

WORD v. ELLWOOD.¹

Supreme Court of Texas.

November 9, 1896.

Certified question from court of civil appeals of Second supreme judicial district.

Action by W. L. Eliwood against C. W. Word to recover on a note. From a judgment for plaintiff, defendant appealed to the court of civil appeals, which certifies to the supreme court the question set out in the opinion.

R. Cobb, for appellant.

DENMAN, J.

In this cause the court of civil appeals have certified to this court for answer the following question, with explanatory statement: "W. L. Eliwood, appellee brought this suit against C. W. Word, appellant, to recover upon a promissory note for the principal sum of $350, drawn by Word to Berg & Story or order. The following writing is upon the back of the note: `For value received, we hereby guaranty the payment of the within note at maturity, or any time thereafter, waiving demand, notice of nonpayment, and protest. [Signed] Berg & Story.' The defendant pleaded a failure of consideration, and this plea the plaintiff was permitted by the trial court to avoid, on the ground that he was an innocent holder for value, before maturity, of the note in suit. We deem it proper to certify to your honors the following question for decision: Was the contract written upon the back of this note an indorsement or an assignment of the same, such as, within the meaning of the law merchant regulating the transfer of negotiable paper, would avail the holder, as an innocent purchaser for value, before maturity, to avoid a plea of failure of consideration urged by the maker? On this question we respectfully cite the following authorities: Central Trust Co. v. First Nat. Bank, 101 U. S. 68-71; Belcher v. Smith, 7 Cush. 482; Story, Notes, § 121; Pickering v. Cording, 92 Ind. 306; Hatcher v. Bank, 79 Ga. 542, 5 S. E. 127; Helmer v. Bank (Neb.) 44 N. W. 482; Weitz v. Wolfe, Id. 485; Heard v. Bank, 8 Neb. 10; Bank v. Haylen, 14 Neb. 480, 16 N. W. 754; Daniel, Neg. Inst. §§ 688c, 689a."

From the authorities above cited, it appears that there is conflict of opinion as to how the matter should be answered under the law merchant. We do not feel called upon to determine the matter, since, in the absence of any statement of the court of civil appeals showing the contrary, we must presume that the transaction is governed by our Revised Statutes of 1895, which are as follows: "Art. 307 (265). Any person to whom any of the said negotiable instruments may have been...