In my opinion, the reasoning of the cases of Spencer v. Halpern, 62 Ark. 595, 37 S.W. 711, 712, 36 L.R.A. 120; Hailey v. Falconer, 32 Ala. 536; Evans v. Freeman, 142 N.C. 61,54 S.E. 847; Hammond Lbr. Co. v. Kearsley, 36 Cal.App. 431,172 P. 404; Ellsworth v. Varney, 83 Ill. App. 94; Aniba v. Yeomans,39 Mich. 171; Gale v. Mayhew, 161 Mich. 96, 125 N.W. 781, 29 L.R.A. (N.S.) 648, presents the sounder view, and should be followed, as the courts of other states are divided upon the proposition.
It appears to me that the language of the indorsement, viz. "This is to certify that I have this day sold all my right, title and interest to the within note and mortgage to L.B. Divelbiss, as part payment on radio. This 5-5-30, E.S. Jones," is a qualified indorsement, and I think it is too clear for question that the purpose was merely to sell whatever right, title, and interest to the note that Jones possessed.
It is almost universally known, and is known to all dealers in commercial paper, that the simple writing of one's name on the back of a note carries with it, without more, a general indorsement which warrants the genuineness of the paper indorsed; the genuineness of the prior indorsement thereon; and an agreement that, if it is not paid at maturity, on notice of this fact, the indorser will pay it.
Why should more be written, unless a limitation of the general liability is desired?
In my opinion, no banker or experienced business man, who was buying paper on the faith that the creditor or *Page 732 owner selling it would pay it, would accept this indorsement. He would only be willing to accept this indorsement when he was willing to look to the maker and prior indorsers for payment.
The indorsement in the case at bar is substantially that of the cases above referred to. In the case of Spencer v. Halpern, supra, the indorsement was: "For value received, I hereby transfer my interest in the within note to Isaac Halpern," and the court held this was not a general indorsement and that there was no liability on the seller as indorser.
In the case of Spencer v. Halpern, supra, quoting from Tiedman on Commercial Paper, section 265, it was said that: "The declaration that the payee assigns or transfers all his right, title, and interest in the paper would seem to limit in a most effective way the rights acquired by the transferee, to those which the transferor had therein, and thus prevents the writing from operating as an indorsement."
In the case of Hailey v. Falconer, 32 Ala. 536, it was said: "A qualified endorsement is one which does not affect `the negotiability of the instrument, but simply qualifies the duties, obligations and responsibilities of the endorser, resulting from the general principles of law.' Any words in an endorsement, which clearly demonstrate the intention of the endorser to make it a qualified one, will have the effect to make it such." The indorsement in this Alabama case was substantially the same as the one in the case at bar.
In the case of Aniba v. Yeomans, supra, the indorsement was: "I hereby transfer my right, title and interest of the within note to S.A. Yeomans." The court said (page 172 of 39 Mich.): "The endorsement upon a negotiable promissory note is something more than the mere transfer of the interest of the payee therein. It includes also the personal undertaking of the endorser that if the note is not paid at maturity, upon notice of *Page 733 that fact he will pay the same. Indeed it goes farther and may pass a perfect title to the endorsee and enable him to recover from the makers, in cases where the payee could not have recovered. The right or interest passing therefore under the usual and customary endorsement is much greater than the mere right, title and interest of the payee, and where the transfer as made only attempts to pass the title and interest of the payee of the note, no greater right or interest than he then held can pass."
In the case of Ellsworth v. Varney, 83 Ill. App. 94, the court held an indorsement, "For value received, I hereby convey my right, title and interest in within notes to E," to be a qualified indorsement, and to express no further intention than to pass the title and interest which the indorser had in the notes at the time. See further discussion at page 98.
In the case of Gale v. Mayhew, 161 Mich. 96, 125 N.W. 781, 29 L.R.A. (N.S.) 648, the court held an assignment: "I hereby assign my interest in this note to ____" to be a mere assignment. See distinctions in indorsements discussed in this case.
I think, therefore, that it was the intention of the seller of the note and mortgage in this case to merely pass his interest in and to the note and mortgage, and not to make himself liable personally therefor.
The character of the writing here involved was well settled, I think, at common law, or the law merchant, to be a qualified indorsement. The law merchant originated in England where the people are divided into classes recognized by the law, and from early times until the American Revolution it was the practice of the courts to construe doubtful words in favor of the rich. With the American Revolution, a different theory of human rights arose, and was established, and equality in all respects before the law became the established principle of our government. However, in some states the *Page 734 judiciary was not entirely in sympathy with this American spirit, and looked to the ancient English law for guidance; but, as stated above, words of similar import to these used in the present case were held to be a qualified indorsement, or a mere assignment without general liability as a general indorser.
I do not think the Negotiable Instruments Law quoted from in the main opinion ought to be construed so as to make it difficult for a man to write a limited indorsement.