Simpson vs First National Bank of Roseburg  The bank tried to cash the note but it was not paid

the note but it was not paid except for a

Chapter 5J; Unindorsed Instruments| Nov. 25, 1919| 94 Or. 147, 185 Pac. portion of the interest.
913 | Ponente: J. Harris  In 1914, Simpson received the instrument from the bank.
 Simpson claimed that she was first entitled to the endorsement of the
GROUP: Group No. 3 bank on the note and then to collect the balance due on the
DIGEST MAKER: Belenzo instrument from the bank.

SUMMARY: A promissory note was executed by Mrs. M. Josephson for
the loan received. The payee’s name was left blank. The bank suggested
Simpson, having $1200 on deposit, to allow the bank to loan $1000 to a
responsible party. Then, the amount was appropriated and loaned to Mrs.
Josephson. Within reasonable time after receiving the note, the plaintiff
filled in the name of the defendant as payee. After the bank presented the
note to the maker from time to time a portion of interest was paid but the
whole principal was unpaid. Simpson brought the matter as an action at
law and not a suit in equity. The court ruled that where the holder transfers
it for value without indorsing it, the transferee acquires the title as the
transferor had therein and the right to have the indorsement. The
instrument was indorsed for value as evidenced by the memorandum
check as voucher made by the defendant bank. However, the plaintiff
brought the issue on the wrong side of the court but is granted the right to
amend its complaint as to entitle her to the indorsement of the bank. The
court also ruled that the transferee has the right to UNQUALIFIED
indorsement unless it is explicitly stated upon its face that indorsement is
made as qualified.
DOCTRINE: Where the holder transfers it for value without indorsing it, the
transferee acquires the title as the transferor had therein and the right to
have the indorsement.
ISSUE/S & RATIO:
WON Simpson is entitled to the endorsement of the bank? YES
 Citing, Sec. 5882 L.O.L, which corresponds with Sec. 49 of the
uniform negotiable instruments law, Court stated that it is clear
that when a transfer of a note payable to order happens for
value, the right to a proper endorsement from the transferor
vests into the transferee.
 In this case, wherein the bank appears as payee of the note,
the right to proper endorsement vested to Simpson. She can
compel the bank to indorse the note. The court further held
that the right was to an unqualified endorsement, unless the
parties agreed that it should be qualified.
It was also mentioned in the discussion that this case was filed as an
action of law. The court cannot compel an endorsement in an action
of law. Simpson must file a suit in equity.
RULING: Modified and remanded.

FACTS:

 In 1907, First National Bank of Roseburg loaned Josephson for

$1000 who gave her promissory note for the same amount.
o At the time of the making of note - name of the payee was
left blank, but, in the language of the complaint— “it was
intended and authority was given therefor to ’’insert the
name of the defendant herein.
 On September 19,1907, Simpson had about $1,200 on deposit to
her credit in the bank and’
o Bank’s officers advised her to let the bank to loan $1000 of
the said credit.
 Thereupon, the bank appropriated Simpson’s $1000 and assigned to
her the note of Josephson.
 The bank continued to hold the note for collection of principal and
interest.