
    First National Bank v. Fowler.
    1. A promissory note containing the words, “ I promise to pay to the order oí myself,” having been signed by two persons and placed by one of them in the hands of the other to be by him put in circulation for his own benefit, the latter may, bef ore the note is due, by indorsing his name thereon, invest a bona fide holder with a complete title thereto, although the name of the other maker is not so indorsed.
    2, In violation of an agreement between principal and surety in a promissory note, the principal transferred the note, before due, as collateral security for an extension of ten days in the time of payment of a protested draft for a less amount, the person receiving the collateral acting in good faith, and having no knowledge of such agreement: Hold, that the title of such holder, to the extent of the draft, is valid.
    Error to the Court of Common Pleas of Trumbull County. Reserved in the District Court.
    On September 23,1874, the First National Bank of Warren, plaintiff in error, brought suit in the court of common pleas of Trumbull county, against Henry Fowler and James H. Ilumiston, defendants in error, on a promissory note executed to the plaintiff by the defendants for $1,067.25, dated April 15,1874, and payable four months after date.
    An answer and a reply were filed, and the cause was submitted to a jury, which jury rendered a verdict for the defendants, on which verdict judgment was rendered. The plaintiff having prosecuted error in the district court, that court reserved, the case to this court for decision.
    
      The facts, so far as it is material to state them, are as follows: On May 24, 1873, Nathan B. Tyler, at Warren, in Trumbull county, filled the blanks in a printed note and signed it. The instrument was then in the following form:
    “Warren, O., May 24, 1873.
    “ $1,000. Four months after date, I promise to pay to the order of myself one thousand dollars, at Trumbull National Bank, Warren, O., value received. N. B. Tyler.”
    On the same day he took the note to Henry Fowler, residing in a village in the same county, and the evidence tended to show that he represented to him that he needed money and wished to get the note discounted at the bank named therein, which representation Fowler believed to be true, and at the request of Tyler then signed his name on the note below that of Tyler, and handed the paper to him. There was also evidence tending to show that both Tyler and Fowler believed that Fowler had then done everything necessary to be done in order to clothe Tyler with full authority to dispose of the note and transfer a complete legal title to any person, for his (Tyler’s) own benefit.
    Tyler was then indebted to the plaintiff in error in the sum of $469.55, money paid by it to Tyler for his draft for that amount on G-. Eicher, known as the Canton draft, and also in the sum of $500 on a promissory note falling due that day, indorsed by John Koehler.
    On the day of the execution of the note by Tyler and Fowler, Tyler presented it to the plaintiff in error for discount, but discount was refused. The plaintiff in error was willing to take it as collateral security. Tyler said he could take up the draft in ten days, and the plaintiff in error desired the collateral security that he would perform his obligation. Nothing was said with express reference to collateral security for the Koehler note. Tyler agreed to transfer the note of Fowler and himself as collateral security, and thereupon wrote his name across the back of it and delivered it to the plaintiff in error. The name of Fowler was never indorsed on the note. Evidence was given that the plaintiff in error had no knowledge of any understanding between Tyler and Fowler as to the manner in which the note executed by them should be disposed of by Tyler.
    On April 15, 1874, Tyler being in failing circumstances, Fowler as principal, and James H. Humiston as surety, executed to the plaintiff in error the note upon which this suit was prosecuted, and took up the note executed by Tyler and Fowler. Subsequently, Fowler obtained judgment against Tyler on the latter note, but during the trial of this case, tendered to the plaintiff in error an assignment of that judgment.
    A bill of exceptions was taken during the term, setting forth certain requests by the plaintiff in error for instructions to the jury, the charge given, and exceptions to the refusal of the court to charge as requested, as well as to the charge given. Among other things which the plaintiff in error requested, was that the jury be charged as follows: “ That the defendant Fowler was bound by whatever disposition Tyler made of the., note, in the ordinary course of business, unless the transferee had notice of some special arrangement between said Tyler and Fowler, limiting Tyler’s authority in the use of the note.” The court refused so to charge, and on the contrary charged, among other things, as follows : “ If the defendant Fowler did not authorize the use made of the old note, and in no manner assented thereto, being a mere surety upon the note, he was not liable upon it when received by the plaintiff as a security or pledge for the payment of the Canton draft within ten days.” And again : “ In order to transfer the legal title of the note, as commercial paper, the note should have been indorsed by both Tyler and Fowler.”
    The case was decided in this court during the term of Gilmore, C. J.
    
      E. B. Taylor, for plaintiff in error.
    
      G. M. Tuttle, for defendants in error.
   Okey, J.

On the trial of this case the testimony was quite conflicting. "We do not find it necessary to express any opinion as to the preponderance of the evidence. Of course the plaintiff in error was entitled to recover, if Eowler and Iiumiston, at the time they executed the note sued on in this case, knew the terms upon which the note of Tyler and Eowler was held. Equally clear it certainly is, that the plaintiff in error was not entitled to recover if it concealed from the defendants in error the terms upon which it held that note, and thereby induced the execution of the note here in suit. The question is as to the liability of the defendants in error upon the assumption that without their fault, or the fault of the plaintiff in error, they were ignorant of those terms. In that case their liability should be measured by the liability of Eowler on the note executed by himself and Tyler. The requests for instructions to the jury, the refusal to charge as requested, and the charge given, in connection with the tendency of certain testimony set forth in the statement of the case, fairly present the question as to the liability of Fowler on the Tyler-Eowler note in the latter view, and require us to say whether the action of the court in that respect was or was not erroneous.

The note executed by Tyler and Eowler was what is known as an irregular instrument.- Byles on Bills (6th Am. ed.) *90 ; 1 Daniel on Neg. Inst. §§ 128,148. Although signed by both of them, its terms are, “ I promise to pay to the order of myself one thousand dollars.” Where a note signed by two or more persons is payable to the order of one of them, it becomes effectual when he writes his name upon the instrument and puts it in circulation. If it is payable, in terms, to the order of two of the makers, the same thing must be done by both of them in order to vest in the holder a legal title. A note payable to the maker’s own order is wholly void until indorsed by him and put in circulation, but it becomes by such transfer a valid promissory note in the hands of a Iona fide holder, and is, in effect, payable to bearer.

The only indorsement made upon the note of Tyler and Eowler, was that made by Tyler by writing his name on the back of the instrument. Was the court warranted in saying to the jury that, in order to transfer the legal title of the note, as commercial paper, the note should have been indorsed by both Tyler and Fowler ? ” In our opinion this question must be answered in the negative upon three grounds.

First. Where a note the terms of which are, “ I promise to pay,” is signed by more than one person, it may be read, “We or either of us promise to pay.” Wallace v. Jewell, 21 Ohio St. 163. Here the instrument is signed by two persons, and its language is, “ I promise to pay to the order of myself one thousand dollars.” No greater violence is done to language by reading it, “ We or either of us promise to pay to the order of ourselves or either of us,” than was done in Wallace v. Jewell; and we think where such interpretation is in harmony with what seems to have been the intention of the parties, the instrument may be so read. Conner v. Routh, 7 How. (Miss.) 176 ; Boyd v. Brotherson, 10 Wend. 93; Pearson v. Stoddard, 9 Gray, 199 ; Higley v. Newell, 28 Iowa, 516.

Second. Parol evidence is inadmissible to vary the terms of a promissory note ; but where the instrument is of the class we are now considering, parol evidence may be admitted to explain it. McCrary v. Caskey, 27 Geo. 54; Taylor v. Strickland, 37 Ala. 642; Kelsey v. Hibbs, 13 Ohio St. 340. “ If you can construe an instrument by parol evidence, where that instrument is ambiguous, in such manner as not to contradict it, you are at liberty to do so.” Parke, B., in Goldshede v. Swan, 1 Welsby, H. & G. 154, 158. And Prof. Parsons says: “ Where the language of a note is capable of two meanings, parol evidence may direct the proper choice to be made between them. ” 2 Bills & N. 517.

Third. The evidence shows that when Tyler received the note from the hands of Fowler, the latter intended to invest him with power to negotiate it, and to do whatever was necessary to be done in order to transfer a legal title to the instrument. Tyler, under the circumstances, was empowered, on his own behalf and as agent for Fowler, to invest another with a legal title to the note. One may be orally authorized to indorse for another a promissory note, and where the instrument is in the form of the one under consideration, the indorsement may be made as this note was indorsed, if that was the manner of indorsement contemplated by the makers. 1 Daniel on Neg. j Inst. §§ 272-308.

But the defendants in error claim that Tyler diverted the' note from the object for which it was executed, and hence Eowler, who executed the note for the accommodation of Tyler,; was discharged. The note, as we have seen, is an irregular instrument, and is payable at another bank than the plaintiff in error ; but having been indorsed in the manner stated, if there was an understanding between Eowler and Tyler that the latter had general authority to transfer the note, the instrument differs, in no legal sense, from the most formal instrument, although the plaintiff in error knew Fowler was surety. Stone v. Vance, 6 Ohio, 246; Riley v. Johnson, 8 Ohio, 526 Williams v. Bosson, 11 Ohio, 62; Clinton Bank v. Ayres, 16 Ohio, 282; Portage Co. Bank v. Lane, 8 Ohio St. 405; Erwin v. Shaffer, 9 Ohio St. 43 ; Knox Co. Bank v. Lloyd, 18 Ohio St. 353; Kingsland v. Pryor, 33 Ohio St. 19. Indeed, according to the syllabus, the transfer of such a note, even in violation of an agreement between the principal and surety, will not discharge the latter, if the indorsee had no knowledge of the agreement.

Finally, it is urged, in support of the instruction to the jury, that Tyler had no power, however fair the transaction may have been on the part of the plaintiff in error, to pledge the note as collateral security for the payment, within ten days, of a protested draft for §469.55. But the position is untenable, for there was an agreement to delay collection of the draft for the specified time. Erwin v. Shaffer, supra ; Roxborough v. Messick, 6 Ohio St. 448; 1 Daniel on Neg. Inst. §§ 829-832.

For error in refusing to charge as requested, and for error in the charge as given, in the particulars indicated in this opinion, the judgment will be reversed, and the cause remanded for a new trial.

Judgment reversed.

Boynton, J., dissented.  