John Abraham A.

Alsol
2011-04194
CASE DIGESTS (TRANSFERS)
1. IN RE MARTENS ESTATE
Issue
Facts
Ruling
Conclusion

WON the promissory note can be held as a valid claim against estate.
Decedent, mother of appellant Mabel Martens Bonk, failed to deliver the
promissory note to appellant.
Undelivered promissory note by the decedent is considered incomplete.
Note cannot be used as a valid claim.

2. CLARK V THOMPSON, ET AL.

Issue
Facts

Ruling
Conclusion

WON the promissory note is indorsed properly thereby making the

complainant a holder in due course.
Complainant files to cancel a mortgage executed by herself and
husband.
Note and mortgage were bought from payee, WA Thompson. Note was
payable to payee or order.
Indorsed through the mortgage attached to the note.
Indorsement must be made on the back of the instrument; allonge only
allowed when there is no space available. If space is available, allonge
treated only as an assignment.
Note was not properly indorsed.

3. YOUNG V HEMBREE
Issue
Facts

Ruling
Conclusion

WON the check is indorsed properly thereby making the plaintiff a holder
in due course.
Hembree issued a check for Horn and Faulkner Oil Trust.
Hembree stopped payment.
Check indorsed to plaintiff, Young, signed Horn and Faulkner by L.H.
Horn
Young tried to cash the check, but was denied twice.
Indorsement must be made in the manner he was designated.
Note was not properly indorsed. Ruled in favor of defendant.

4. BLAKE V WEIDEN
Issue
Facts

WON notes payable to more than one payee can be set up as

counterclaim
Blake, trustee in the bankruptcy of Weiden & Son, Inc., sued defendant
to recover overdraft.
Defendant used five notes Pay to the order of Charles R. Weiden,
Hermann J. Weiden and Frank J. Weiden, share alike, as tenants in

Ruling
Application
Conclusion

common.
If there are more than one transferee, indorsees take legal title to their
several shares ad may sue together OR any one or more may sue
provided all are brought in as parties.
First, record shows splitting done by first two parties.
Second, rule against splitting does not forbid the use of part of a claim as
a set-off retaining the rest of later use.
If other parties already used splitting, note can be used for the remaining
value.

5. FAYE V WITTE
Issue
Facts
Ruling
Conclusion

WON indorser is freed from liability when indorsement includes the word
assign all rights and interests
Fay become the holder of the note indorsed by Witte.
Indorsement was written as follows: I hereby assign all my right and
interest in this note to Richard Fay in full.
Words without recourse or any word of similar import must be written in
an indorsement to make it qualified thereby freeing indorser of its
secondary liability.
Witte is still liable.

6. COPELAND V BURKE, ET AL.

Issue
Facts
Ruling
Conclusion

WON indorser is freed from liability when indorsement includes the word
I transfer my right, title and interest in the same.
Messingrill executed a negotiable promisorry note.
Burke indorsed the same to Copeland with the words I transfer my right,
title and interest in the same.
Words without recourse or any word of similar import must be written in
an indorsement to make it qualified thereby freeing indorser of its
secondary liability.
Burke is still liable.

7. HUSTON V RANKIN
Issue
Facts
Ruling
Conclusion

WON guaranty destroys negotiability of the note.

Rankin executes promissory note.
Northwestern guaranteed payment by writing on the back of the note.
Guaranty does not destroy negotiability.
Guaranty statement on the back of the note does not equal indorsement.
Note still negotiable

8. WHITE V NATIONAL BANK

Issue
Facts

WON the words for account always denotes assignment and not
negotiation
Brownel indorses the draft for account of Miners National Bank to
White.

Ruling
Conclusion

Brownel and White are not aware of the restrictive words.

Indorsement can be restrictive to constitute indorsee as the agent of the
indorser.
In consideration of the money paid and that the Brownell and White are
not aware of the words, money can be recovered.

9. LEONARDI V CHASE NATIONAL BANK OF THE CITY OF NEW YORK

Issue
Facts

Ruling
Conclusion

WON the indorsement of the plaintiff makes the bank owner of the note
Leonardi (plaintiff) indorsed a check made to the order of him with the
following text For deposit of Florence Leonardi and John Leonardi to
the Bank of Bay Biscayne.
The bank sent this to defendant, its New York correspondent
Bank of BB was insolvent.
Bank of NY collected the note but claims that it is owner of the proceeds.
Indorsement can be restrictive to constitute indorsee as agent. Sec 36
Although banks normally are collecting agents, the words for deposit
are also restrictive and indicate that the bank of NY was an agent for
collection and not the owner.

10. SIMPSON V FIRST NAT. BANK OF ROSEBURG

Issue
Facts

Ruling
Conclusion

WON plaintiff is entitled to the endorsement of the bank on the note

Defendant loaned Josephson who executed a promissory note
Plaintiff had deposits on defendant and was advised to allow bank to
loan to responsible parties.
Plaintiffs account was charged by Josephsons note.
Plaintiff received the note and was refused payment (only part of the
interest was paid.
Plaintiff claims that she is entitled first to the endorsement of the bank.
If transferred for value and unendorsed, transferee acquires right to have
the indorsement of transferor. Sec 49
Plaintiff is entitled to endorsement

11. FURBEE V FURBEE

Issue
Facts
Ruling
Conclusion

WON legal action is maintainable against the maker of a not by one to

whom payee transferred but did not indorsed the note to
Note was not indorsed
If transferred for value even if unendorsed, transfer vests in the
transferee such title as the transferor had therein. Sec 49
Legal action is maintainable. Transferee needs just prove of his
ownership.

12. WHISTLER V FORSTER

Issue
Facts

Ruling
Conclusion

WON maker of the check is liable to indorsee

Griffith obtains check from Foster by means of fraud.
Griffith transfers check without indorsement.
Griffith fails to pay plaintiff.
Plaintiff was informed of the fraud.
Griffith then indorses the instrument.
If transferred for value even if unendorsed, transfer vests in the
transferee such title as the transferor had therein. Sec 49
Rights of Griffith passes to indorsee, but having no rights cannot pass
anything by just delivering it. Plaintiff has no title as transferee at all.

13. GREAT ASIAN SALES CENTER CORP V COURT OF APPEALS

Issue
Facts

Ruling
Conclusion

WON Great Asian is liable to Bancasia under the deeds of assignment

for breach of contract; WON Tan Chong Lim is solidarily liable
Tan Chong Lim signed surety agreement stating that in case of default
he becomes solidarily liable
Great Asian assigned to Bancasia 15 postdated checks
Checks were dishonored by respective drawee banks
Notice of dishonor was sent by lawyer of Bancasia and Bancasia itself
but Tan Chong Lim and Great Asian failed to pay
Surety agreement explicitly states that checks were sold with recourse
Surety agreement binds Tan Chong Lim as solidarily liable
Obligations arising from contracts have the force of law Art 1159
Contracting parties may establish such stipulations Art 1306
Great Asian and Tan Chong Lim are liable solidarily to Bancasia for the
dishonored payable checks