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Action on promissory note. Before Judge Mitchell. DeKalb Civil Court. March 31, 1954.
1. The indorsement on the note sued on, "I hereby transfer my right to this note over to W. E. McCullough," is not a qualified indorsement.
2. The indorsement is a special indorsement, and a special indorsement in full cannot be varied by parol; therefore the court erred in overruling the demurrer to an allegation in the defendant's answer, that the indorser and indorsee intended that the special indorsement operate as a qualified indorsement.
1. The indorsement in and of itself was not a qualified indorsement. Code 14-409 provides: "A qualified indorsement constitutes the indorser a mere assignor of the title to the instrument. It may be made by adding to the indorser's signature the words, 'without recourse', or any words of similar import . . ." The words, "I hereby transfer my right to this note over to W. E. McCullough," are not words of similar import to "without recourse." Hurt v. Wiley, 18 Ga. App. 420 (2) (89 S. E. 494); 10 C. J. S. 703, 214; 8 Am. Jur. 61, 325; Fay v. Witte, 262 N. Y. 215 (186 N. E. 678); Britton's Handbook on the Law of Bills & Notes, p. 230.
2. In Georgia, indorsements may be special, in blank, restrictive, qualified, or conditional. Code 14-404. A special indorsement specifies the person to whom, or to whose order, the instrument is to be payable, and the indorsement of such indorsee is necessary to the further negotiation of the instrument. An indorsement in blank specifies no indorsee, and an instrument indorsed in blank is payable to bearer and may be negotiated by delivery. Code 14-405. In the instant case an indorsee was named and his indorsement was necessary to a further negotiation of the instrument. Therefore the indorsement here was a special indorsement. Chandler v. Smith, 147 Ga. 637, 638 (2, 3) (95 S. E. 223); Fay v. Witte, supra. The indorsement being a special indorsement in full, the defendant could not contradict the terms thereof and show that the indorsement was intended to be a qualified one, in the absence of fraud or mistake. Meador v. Dollar Savings Bank, 56 Ga. 605 (2); Odom Realty Co. v. Central Trust Co., 22 Ga. App. 711 (1) (97 S. E. 116). The only question presented in this case is the effect of the indorsement, and no questions of conditional delivery or the capacity of the indorser are involved.
The court erred in overruling the demurrer to the allegation in the answer set out above. Such error rendered all further proceedings in the case nugatory.
McCord & Cooper, Wayne H. Fore, contra.
Haas, White, Douglas & Arnold, George A. Haas, for plaintiff in error.
Saturday May 23 03:43 EDT

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