82 Iowa 442 | Iowa | 1891
I. The notes secured by the mortgage were executed by the defendants payable to the order of Gaar, Scott & Co., a corporation, and were transferred before maturity to the plaintiff by an indorsement in blank upon the back of the notes in these words, “ Gaar, Scott & Co.” The petition alleges the indorsement of the notes, and no denial thereof, or of the signature of the indorsement, is alleged in the answer. This allegation, however, appears: “Defendants say said notes were never indorsed by Gaar, Scott & Co. so as to transfer title.” The answer admits the execution of the. notes, but alleges “that the indorsement and transfer of the notes to the plaintiff by Gaar, Scott & Co. was fraudulent, and made with intent to place the same in the hands of the plaintiff, for the sole and only purpose that these defendants could not plead a counterclaim against said notes.” The answer further alleges that the notes were executed for a separator and other machinery sold to the defendants under a warranty which has wholly failed, and this is pleaded as a defense to this action. As the promissory notes are negotiable, and as they have been transferred to the plaintiff,— which is alleged in the petition, and not denied, but admitted in the answer, as above set out, — and as this transfer is shown to have been before the maturity of the notes, the defendants cannot defeat the notes upon the ground of the failure of the warranty pleaded as a defense, if the transfer was by a valid indorsement, in sufficient form.
II. ■ The defendants insist that the indorsement is invalid, for the reason that the indorsee is a corporation authorized to execute the indorsement only by the
III. But, in our opinion, the signature of the. indorsement is sufficient as it appears. A little thought will make this plain. The name of the corporation written on the back of the instrument is in fact the signature of the indorser, just as it would be if it were; shown tha t it was made by an officer of the corporation that signs it. It is the corporation that does the act by the officer, for it has' not hands and cannot write. When the name is found written upon the notes, it is known that it is intended as the indorsement in blank. If that name be written there by an officer having authority it will bind the corporation, upon that fact being established, though the officer’s name be not subscribed to, nor appear in, the instrument. It cannot be doubted that had defendants raised an issue presenting the question whether the name' of the corporation was written upon the notes for the purpose of indorsing them by the officer clothed with authority so to do, the plaintiff would have been permitted to present evidence supporting the indorsement by showing the authority of the one making it, and his intention to bind the corporation as an indorser. Now, as no such
The cause will be reversed and remanded for a decree in accord with this opinion, or a decree may be entered in this court, at the plaintiff’s option. Reversed.