Cole, J.
1. Practice: pleading over. —I. The defendant demurred to the plaintiff’s petition, which demurrer was overruled, and thereupon defendant filed his answer. The defendant now assigns the overruling of the demurrer as error, The f[hng Gf ail answer was a waiver to any exception to the ruling on the demurrer, and such ruling cannot properly he assigned as error or made available as such in this court.
2. Pleadings: assignment. II. The defendant moved to strike out of the plaintiff’s petition the copy of the railroad bond containing the assignment of the note and mortgage sued on, as set out in the statement of this case, and also the interest coupons attached to it, on the ground that the same were irrelevant and immaterial. This motion was overruled, and such ruling is here assigned as error.
There was no error in this action of the court. The railroad bond which contained the assignment of the note and mortgage was the instrument whereby the plaintiff acquired his title to them, and was not, therefore, either irrelevant or immaterial. Manier v. Reynolds, 4 G. Greene, 187; Balcer v. Chittucks, 4 Id., 480.
3. Promissory note: assignment: equities. III. The defendant set up in his answer that the note and mortgage were obtained from him by means of false representations and through the fraud of the t, -. . railroad company by its agent, and set out parJ J ° 7 x ticularly the alleged false and fraudulent representations and acts. On the trial before the referee, the defendant offered testimony in support of this defense. *519The plaintiff objected to its introduction, on the ground that it was immaterial in this action, since it was not controverted by any testimony that the plaintiff became the purchaser and owner of the note and mortgage, before maturity, for a valuable consideration, without notice of the fraud, if any existed.
By agreement of the parties, the referee received the testimony, subject to the objections, which were to be considered and determined after all the evidence was closed, and when making up his final report. The testimony thus received tended to show that the defendant was induced to execute the note and mortgage by reason of the false and fraudulent representations made to him at the time by the agent of the railroad company. The referee sustained the objection, and excluded the testimony from his consideration in making up his report, and this is assigned as error.
The determination of this question rests upon the true construction of the law merchant. If by that law the transfer of this note and mortgage, which is made in the body of the railroad bond a separate instrument, made for an independent purpose, upon another paper, is an indorsement of the note, then the referee correctly ruled in excluding the evidence; but if such transfer was an assignment only, and did not, by the law merchant, of itself pass the legal title, then the evidence was material and competent, and should have been considered by the referee.
Argu. 1. - assignment and indorsement. As applied to bills and notes, an assignment is the transfer, by writing, of an interest therein, while an indorsement is a transfer of the title by writing on the back thereof. The technical meaning of the word indorse (derived from the Latin words in and dorsum, the back), is to write on the back of a written paper; but it was held in Rex v. Bigg, by a majority of the court, as reported in 8 Peere Williams, *520419, 428, and by all tbe judges, as reported in 1 Strange, 18, that a writing upon the face was within the legal meaning of the word. And this construction was used approvingly in argument by Lord Ellenborough, in the case of Yarborough v. Bank of England, 16 East, 6, 12. See Pilmer v. State Bank, 16 Iowa, 321. But Mr. Parsons, in his work on Notes and Bills, says that the indorsement should always be written on the back, and if written on the face it would be a circumstance so unusual as that it would be regarded with suspicion and require explana-' tion. 2 Pars, on Notes and Bills, 17, 18.
There is, also, a still further extension of the meaning of this word, so. far as pertains to its being upon the back of the note or bill itself, that has obtained a more extended approval in the adjudicated cases, if not by elementary writers, and which allows the indorsement to be made on another paper annexed thereto, when, by reason of so many successive indorsements, it becomes necessary. This paper is called, in the French law, allonge. Story on Prom. Notes, §§ 121, 151; Story on Bills of Ex., § 204; Chitty on Bills (9th Am., from 8th Lond. ed.), 251; 2 Pars, on Notes and Bills, 18; Folger v. Chase, 18 Pick., 63; Patridge v. Davis, 20 Verm., 499 (503); Geary v. Physick, 7 Dowl. & Ry., 653 Merchants' Bank v. Spicer, 6 Wend., 443.
In this case, the transfer is not within either of the extensions of tlm strict meaning of the word “indorse.” It is not on the face of the note, nor is it anywhere claimed that there was any necessity for attaching a separate paper on account of prior indorsements, or for any other reason. The mode of transfer, it will be remembered, is not by an indorsement on a separate paper merely, but in a separate instrument, made between different parties, for another and distinct purpose,.and which is an independent obligation of itself, having full force and validity without reference to the language used in it for the purpose of transferring the *521note and mortgage sued on. The words of transfer were used therein for the purpose of better securing the payment of such independent obligation; and so far as appears, or so far as any claim is made, the manner of transfer was chosen by the parties, doubtless for the reason that it was according to their contract, and would best effectuate their agreement and intentions.
Argu. 2. — transfer of legal title. Argu. 3. — by assignment. By the law merchant, the only mode in which a negotiable note or bill could be transferred, so as to invest the transferee with the legal title and right to enforce the remedies thereon, m his own name, at law, was by indorsement. Judge Story, in his work on Promissory Notes, lays down this rule in the following language: “ If a promissory note is originally payable to a person or his order, then it is properly transferable by indorsement. We say, properly transferable, because in no other way will the transfer convey the legal title to the holder, so that he can, at law, hold the other parties liable to him ex directo, whatever may be his remedy in equity. If there be an assignment thereof, without an indorsement, the holder will thereby acquire the same right only as he would acquire upon an assignment of a note not negotiable.” Story on Prom. Notes, § 120. Mr. Parsons lays down the same rule, as follows: “ An indorsement may be said to operate both as an assignment and as a guaranty. But it differs from an assignment, in that an indorsee may bring the action in his own name, and an assignee cannot.” 2 Pars, on Bills and Notes, 1. And again: “ By the law merchant, bills and notes which are payable to order, can be fully and effectually transferred only by indorsement.” Pars. Merc. Law, § 122. See, also, Story on Bills of Ex., § 201; Chitty on Bills (9 Am., from 8th Lond, ed.), 252, and the opinion of Chief Justice Eyre in Gibson v. Minet, 1 H. Bl., 605; Younker v. Martin, ante.
*522No particular or precise form of words is necessary to constitute an indorsement, so as to transfer the title to, and the right to enforce the remedies in the name of, the indorsee; but the rights of the indorsee, as well as the liabilities of the indorser, may, of course, be controlled by the language of the indorsement; for indorsements may be in blank or full, general or restrictive, qualified, conditional, or absolute.
If the language of assignment used in the railroad bond, for the purpose of transferring the note and mortgage, had been written and signed upon the note itself, or upon the note and a paper attached thereto, as part thereof, and necessary in order to write the indorsement, or, perhaps, if annexed and used for the purpose of writing the indorsement only, it would have been a good and sufficient indorsement of the note, and, by the law merchant, would have invested the indorsee with the complete legal title and right to enforce its collection.
It might, by a person unfamiliar with law, be not inaptly asked: If the language used will convey a perfect legal title and indefensible right, when written on one paper, why will it not do so when the same language is written on another paper? We answer, in reason it would; but, in the law, it does not. Not that the law is unreasonable, but for this: Originally, such a writing would not transfer a perfect legal title, if written anywhere; but the wants and experience of the commercial world demonstrate that advantages would result by conferring upon certain instruments this peculiar legal quality or characteristic, and, accordingly, it was so recognized, and thus became the law merchant. Now, no infraction of reason was committed nor injustice done, in that like special dignity was not conferred upon other instruments for which no such necessity had been demonstrated. Just as in the parable of the laborers who served only from the eleventh hour and received the same compensation as those who had borne *523the heat and burden of the day, without any wrong or injustice to the latter, for that they had their own, and the master might, with justice and without wrong, give the others relatively greater compensation, since it was his own to give or withhold.
Without now determining whether the words of transfer in this bond, or other proper words of transfer written on a separate paper annexed to the note, in the absence of any necessity for it, would be an indorsement, we place our opinion upon the broader and safe ground that this transfer is made in the body of a separate instrument, made for an independent purpose, and to which the transfer is a mere incident, and which can, in no proper sense, be said to be a “ part of the note.” The transfer, as made, is a “ courier with luggage,” and not a clear, unincumbered, commercial paper. It is an assignment, and not an indorsement.
Argu. 4. - assignee of a note not negotiable. Since we find, then, that the transfer of the note in this case was an assignment, and not an indorsement, it only remains to inquire what rights were conferred ^P011 the assignee thereby. Mr. Justice Story sayS) supra, that “ the holder will acquire the same right only as he would acquire upon an assignment of a note not negotiable.” And in such cases (aside from any statute), the assignee acquires the same rights in equity as the payee or assignor had; that is, he may, at law, sue the maker and prior parties in the name of the payee or assignor; or he may maintain a suit in equity in his own name against them. And as he stands in the place and upon the rights of the payee or assignor, he is subject to whatever defenses might be made as against such payee or assignor, provided they are such as the law considers equitable, and were subsisting at the time the debtor received notice of the assignment. Story on Prom. Notes, § 120, note 2; Story on Bills of Ex., §§ 199, 201, note 3; Edwards on Notes and Bills, 286, 251 and note; 2 Pars, on Bills and Notes, *52445 and note a, and 46, note c, 47, and authorities cited.; Younker v. Martin, ante, and authorities cited.
These principles are-so well recognized and so uniformly held, as to render the citation of the numerous cases in support of them wholly unnecessary.
Under our statute (§ 2757), every action must be prosecuted in the name of the real party in interest; and (§§ 1796, 949) all notes and instruments are assignable, and the assignee has a right of action in his own name, subject to any defense or set-off, legal or equitable, which the maker or debtor had against any assignor thereof, before notice of assignment.
In "Wisconsin, where this note was payable, and in New York, where it was assigned, as well as in Minnesota, Ohio, California, Alabama, Arkansas, Florida, Indiana, Yirginia, Maryland, Michigan, Mississippi, Missouri and Texas, and possibly other States, similar statutes are in force. See Digest of these in Parsons on Notes and Bills, 47, 48.
Without discussing the effect to be given to the lex loci contractus, or the lex fori, it is clear that whether the rights of the parties in this case are measured by the common law or the statutes of the loci contractus or fori, they are the same in legal effect.
Under the law, then, as applicable to the assignee of a note assigned upon a separate paper, and independent instrument made for another purpose as in this case, and not indorsed, the maker has the right to interpose any defense available, as against the payee, before notice of assignment, and, therefore, the referee erred in excluding the testimony which tended to establish such defense in this case.
4. Estoppel: corporation. IY. The appellants’'counsel, in their printed argument, insist that there was no sufficient proof of the existence, in fact, of the corporation payees, the Eacine and-. Mississippi Eailroad Company. And, also, that the cash payment, required by the charter, of five dollars *525upon each share subscribed, not having been paid by the defendant, but only secured by his note and mortgage, his subscription was void, as being a fraud upon cash subscribers. The execution of the note and mortgage was an admission of the existence of the payee (Gordon & Washburn v. Janney & Co., Morris Rep., 182; Barnard et al. v. Parvin, Id., 309), and estopped the defendant from setting up the defense of fraud as claimed. Clark v. Farrington, 11 Wis., 306; Blunt v. Walker et al., Id., 334; Cornell v. Hichens, Id., 353. But neither of these points are specifically assigned as error, and are, therefore, not entitled to even this brief and formal disposition.
Dor the reason that the referee excluded the evidence as stated under the third point in this opinion, the judgment of the District Court is
Reversed.