ON REHEARING. We relieve counsel of responsibility for the concession that indorsement here, though special in form, was restrictive in fact, and so hold on our own account, and adhere to former opinion.
Parol evidence, it is argued, was not admissible to vary the indorsement special in form. Exceptions to general rule, denying admissibility of parol evidence to vary or explain the contract implied from indorsement, are discussed, with citation of authorities in a note, 4 A.L.R. 776. We quote:
"One exception is that it may be shown that the indorsement was to an agent. * * *
"A second exception is stated to be that parol evidence is competent to show that the note was indorsed to the holder for some special purpose and is holden by him in trust."
See Ogden, Negotiable Instruments (3d Ed.), P. 501.
The chief question in the case, the title of the payee, plaintiff's indorser, being defective, was whether plaintiff was a holder in due course.
Evidence showing that plaintiff took the notes as a mere agent of the payee, its indorser, and also as a mere trustee under the trust agreement, established under the sections of the negotiable instruments law *Page 441 quoted in main opinion that plaintiff was not a holder in due course, and was clearly admissible.
It would be remarkable if one might indorse, specially or in blank, a negotiable instrument to his agent and prevent all inquiry of the character of the agent's holding by invoking the parol-evidence rule. And, under negotiable instruments law, this is likewise true of indorsement to trustee.
Affirmed.
McDONALD, POTTER, SHARPE, WIEST, and BUTZEL, JJ., concurred with CLARK, C.J. NORTH and FEAD. JJ., concurred in the result.