19 A.L.R.

3d 1297 Page 1
19 A.L.R.3d 1297 (Originally published in 1968)

American Law Reports ALR3d

The ALR databases are made current by the weekly addition of relevant new cases.

Indorsement of negotiable instrument by writing not on instrument itself

V. G. Lewter.

TABLE OF CONTENTS

Article Outline
Index
Table of Cases, Laws, and Rules
Research References

ARTICLE OUTLINE

§ 1[a] Introduction—Scope
§ 1[b] Introduction—Related matters
§ 2 Summary
§ 3 Rule that ordinarily indorsement must be on instrument
§ 4[a] Rule that indorsement may be on attached paper—Generally
§ 4[b] Rule that indorsement may be on attached paper—Held applicable if space is not available on instrument
§ 4[c] Rule that indorsement may be on attached paper—Held applicable even if space is available on instrument
§ 5[a] Degree of attachment necessary—Tacking or pasting of attached paper
§ 5[b] Degree of attachment necessary—Attachment of temporary nature
§ 6[a] Indorsement on paper not physically attached to instrument—Held not effective
§ 6[b] Indorsement on paper not physically attached to instrument—Held effective
§ 7 Contract to be liable as indorser

Research References
INDEX

Allonge, indorsement on §§4,5,6[a]

Attached paper— indorsement on § 4
tacking or pasting of § 5[a]
temporary nature of § 5[b]

Availability of space on instrument, effect of § 4[c]

Contract to be liable as indorser § 7
Degree of attachment necessary § 5
Introduction § 1
Other indorsements, instrument already covered with § 4[b]
Paper not physically attached to instrument, indorsement on § 6
Pasting of attached indorsement §§4[a],4[b],5[a]
Pinning of attached paper to note §§4[b],4[c],5[b]
Related matters § 1[b]
Scope of annotation § 1[a]
Separate sheet of paper, indorsement on § 6

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Space on instrument— availability of § 4[c]
unavailability of § 4[b]

Stapling of paper to instrument §§4[b],5[a]

Summary § 2
Tacking of attached paper § 5[a]
Temporary nature, attachment of § 5[b]
Unattached paper, indorsement on § 6
Unavailability of space on instrument, effect of § 4[b]
Wafer, attachment of paper to note by § 4[b]
Words and phrases— allonge § 5[b]
a paper attached thereto § 4[b]
indorsement § 4[b]

Table of Cases, Laws, and Rules

Third Circuit

Penn Mut. Indem. Co. v. C.I.R., 277 F.2d 16 (3d Cir. 1960) — 4[a]

Seventh Circuit

Osgood's Adm'rs v. Artt, 17 F. 575 (C.C.N.D. Ill. 1883) — 3, 4[c]

Alabama

Bailey v. Mills, 257 Ala. 239, 58 So. 2d 446 (1952) — 3, 4[b], 5[a], 5[b]

Clark v. Thompson, 194 Ala. 504, 69 So. 925 (1915) — 3, 4[b], 5[a], 5[b]

Crutchfield v. Easton, 13 Ala. 337, 1848 WL 392 (1848) — 3, 4[a], 5[a]

Gookin v. Richardson, 11 Ala. 889, 1847 WL 307 (1847) — 3

Tennessee Valley Bank v. Williams, 246 Ala. 563, 21 So. 2d 686 (1945) — 3, 4[a], 6[a]

Arkansas

Buckner v. Real Estate Bank, 5 Ark. 536, 1844 WL 440 (1844) — 3, 4[a]

Troyer v. Cameron, 160 Ark. 421, 254 S.W. 688 (1923) — 3, 4[a]

California

Hays v. Plummer, 126 Cal. 107, 58 P. 447 (1899) — 3, 4[b]

Lopez v. Puzina, 239 Cal. App. 2d 708, 49 Cal. Rptr. 122, 19 A.L.R.3d 1291 (1st Dist. 1966) — 3, 4[a],
6[a], 7
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19 A.L.R.3d 1297 (Originally published in 1968)

Pribus v. Bush, 118 Cal. App. 3d 1003, 173 Cal. Rptr. 747, 31 U.C.C. Rep. Serv. 599 (4th Dist. 1981) —
4[b]

Wright v. Bank of California, Nat. Ass'n, 276 Cal. App. 2d 485, 81 Cal. Rptr. 11, 6 U.C.C. Rep. Serv. 1165
(1st Dist. 1969) — 6[a]

Colorado

Lamson v. Commercial Credit Corp., 187 Colo. 382, 531 P.2d 966, 16 U.C.C. Rep. Serv. 756 (1975) —
5[a]

Connecticut

Wadhams v. Vanderworken, 1 Root 385, 1792 WL 88 (Conn. Super. Ct. 1792) — 3

District of Columbia

Big Builders, Inc. v. Israel, 709 A.2d 74 (D.C. 1998) — 3

Manzon v. Greenwald, 145 A.2d 575 (Mun. Ct. App. D.C. 1958) — 3, 4[a]

Georgia

Billas v. Dwyer, 140 Ga. App. 774, 232 S.E.2d 102, 21 U.C.C. Rep. Serv. 157 (1976) — 6[a]

Haug v. Riley, 101 Ga. 372, 29 S.E. 44 (1897) — 3, 4[c], 6[a]

Milestone v. David, 251 Ga. App. 832, 555 S.E.2d 163 (2001) — 4[b]

Moore v. Moore, 35 Ga. App. 39, 131 S.E. 922 (1926) — 3, 4[a]

National Bank v. Leonard, 91 Ga. 805, 18 S.E. 32 (1893) — 3, 5[b], 6[a]

Illinois

Brown v. Bookstaver, 141 Ill. 461, 31 N.E. 17 (1892) — 3, 4[b], 5[a]

Farmers Trust Co. v. Schenuit, 83 Ill. App. 267, 1898 WL 3236 (1st Dist. 1899) — 3, 4[a]

Herring v. Woodhull, 29 Ill. 92, 1862 WL 1881 (1862) — 3, 4[a]

Williams v. Frederick's Estate, 289 Ill. App. 410, 7 N.E.2d 384 (3d Dist. 1937) — 3, 4[a]

Indiana

French v. Turner, 15 Ind. 59, 1860 WL 4325 (1860) — 3, 4[b], 6[a]

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 Keller v. Williams, 49 Ind. 504, 1875 WL 6071 (1875) — 3, 4[b]

Kern v. Hazlerigg, 11 Ind. 443, 1858 WL 6226 (1858) — 3

Williams v. Osbon, 75 Ind. 280, 1881 WL 7230 (1881) — 3

Iowa

Franklin v. Twogood, 18 Iowa 515, 1865 WL 190 (1865) — 3, 4[b], 6[a]

Hawkeye Securities Fire Ins. Co. v. Central Trust Co. of Des Moines, 208 Iowa 573, 221 N.W. 486 (1928)
— 3, 4[a], 6[b]

Kentucky

Hathaway v. Morris, 6 Ky. Op. 167, 1872 WL 6426 (Ky. 1872) — 3

Lyons v. Hager's Adm'r, 278 Ky. 99, 128 S.W.2d 196 (1939) — 3, 4[a], 7

Traders' Deposit Bank v. Chiles, Thompson & Co., 14 Ky. L. Rptr. 617, 1893 WL 1165 (Super. Ct. 1893)
— 3, 4[a], 6[a]

Maine

Freeport, Town of v. Ring, 1999 ME 48, 727 A.2d 901, 38 U.C.C. Rep. Serv. 2d (CBC) 1225 (Me. 1999)
— 3, 6[a]

Hills v. Gardiner Sav. Institution, 309 A.2d 877 (Me. 1973) — 4[a], 6[a]

Massachusetts

Duxbury v. Roberts, 388 Mass. 385, 446 N.E.2d 401, 36 U.C.C. Rep. Serv. 214 (1983) — 6[a]

Folger v. Chase, 35 Mass. 63, 18 Pick. 63, 1836 WL 2424 (1836) — 4[b]

New Haven Savings Bank v. Follins, 431 F. Supp. 2d 183 (D. Mass. 2006) (applying Massachusetts law)
— 4[a]

Missouri

Bishop v. Chase, 156 Mo. 158, 56 S.W. 1080 (1900) — 3, 4[b]

Bremen Bank and Trust Co. of St. Louis v. Muskopf, 817 S.W.2d 602, 16 U.C.C. Rep. Serv. 2d 1097 (Mo.
Ct. App. E.D. 1991) — 4[b], 5[a]

Cockrell v. Taylor, 347 Mo. 1, 145 S.W.2d 416 (1940) — 3

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19 A.L.R.3d 1297 (Originally published in 1968)

Nebraska

Doll v. Hollenback, 19 Neb. 639, 28 N.W. 286 (1886) — 3, 4[b], 6[a]

Jackson State Bank v. Laurel Nat. Bank, 111 Neb. 744, 197 N.W. 389 (1924) — 3, 4[a]

Plattsmouth State Bank v. Redding, 128 Neb. 268, 258 N.W. 661 (1935) — 3, 4[b], 5[a]

New Jersey

Bryen v. Krassner, 208 N.J. Super. 639, 506 A.2d 803, 1 U.C.C. Rep. Serv. 2d 1568 (App. Div. 1986) —
4[a]

New York

Slutsky v. Blooming Grove Inn, Inc., 147 A.D.2d 208, 542 N.Y.S.2d 721 (2d Dep't 1989) — 4[a], 6[a]

North Carolina

Booker v. Everhart, 33 N.C. App. 1, 234 S.E.2d 46 (1977) — 4[a]

Commercial Security Co. v. Main Street Pharmacy, 174 N.C. 655, 94 S.E. 298 (1917) — 3, 4[c], 6[a]

Midgette v. Basnight, 173 N.C. 18, 91 S.E. 353 (1917) — 3, 4[a]

Oklahoma

Shepherd Mall State Bank v. Johnson, 1979 OK 135, 603 P.2d 1115, 27 U.C.C. Rep. Serv. 1019 (Okla.
1979) — 6[a]

Pennsylvania

Heister v. Gilmore, 5 Phila. 62 (Pa. Dist. Ct. 1862) — 4[c], 5[b]

South Carolina

Mosely v. Graydon, 35 S.C.L. 7, 4 Strob. 7, 1849 WL 2692 (Ct. App. Law 1849) — 6[b]

Texas

Estrada v. River Oaks Bank & Trust Co., 550 S.W.2d 719, 22 U.C.C. Rep. Serv. 83 (Tex. Civ. App.
Houston 14th Dist. 1977) — 4[a], 5[a], 5[b]

First Nat. Bank v. Bell, 88 S.W.2d 119 (Tex. Civ. App. Fort Worth 1935) — 3, 4[a], 6[b]

First State Bank of Three Rivers v. Petrucha, 38 S.W.2d 138 (Tex. Civ. App. San Antonio 1931) — 3, 4[a]

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 Lamm v. Bates, 26 S.W.2d 361 (Tex. Civ. App. El Paso 1930) — 3, 4[a]

Leavings v. Mills, 175 S.W.3d 301, 54 U.C.C. Rep. Serv. 2d 678 (Tex. App. Houston 1st Dist. 2004) —
4[a]

Penny v. Kelley, 528 S.W.2d 330, 18 U.C.C. Rep. Serv. 454 (Tex. Civ. App. Beaumont 1975) — 6[a]

Vermont

Partridge v. Davis, 20 Vt. 499, 1848 WL 3198 (1848) — 3, 4[a]

Virginia

Colona v. Parksley Nat. Bank, 120 Va. 812, 92 S.E. 979 (1917) — 3, 4[a]

Washington

Fines v. Stock, 37 Wash. App. 101, 678 P.2d 839, 38 U.C.C. Rep. Serv. 910 (Div. 2 1984) — 4[a], 6[a]

Swenson v. Stoltz, 36 Wash. 318, 78 P. 999 (1904) — 3, 4[a]

Wisconsin

Bange v. Flint, 25 Wis. 544, 1870 WL 4036 (1870) — 3, 4[c]

Bergmann v. Puhl, 195 Wis. 120, 217 N.W. 746, 56 A.L.R. 915 (1928) — 3, 4[b], 4[c], 6[a]

Crosby v. Roub, 16 Wis. 616, 1863 WL 2321 (1863) — 3, 4[c]

Murphy v. Dunning, 30 Wis. 296, 1872 WL 3111 (1872) — 4[c]

§ 1[a] Introduction—Scope

This annotation[1] is concerned with whether an indorsement of a negotiable instrument is valid if written upon
a paper other than the negotiable instrument itself. Both the Uniform Commercial Code (see § 3-202(2)), and the
Uniform Negotiable Instruments Act (see § 31), have adopted the view that an indorsement of a negotiable
instrument must be on the note itself or upon a paper attached thereto. It remains for the courts to decide under what
circumstances a particular piece of paper is, or may be, attached to a negotiable instrument in such a manner that a
signature written on the separate paper may constitute a valid indorsement of the negotiable instrument.

This annotation is limited to the question whether an otherwise good indorsement is invalid because it is written
upon a paper other than the negotiable instrument which it attempts to indorse. It includes the situation where a
person binds himself by contract to be liable as an indorser, even though he technically is not an indorser. It also
includes those situations where the negotiable instrument is merely assigned to someone by a writing on a separate
paper, either attached thereto or accompanying the negotiable instrument, to the extent that the argument is made
that the words of assignment constitute an indorsement.
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19 A.L.R.3d 1297 (Originally published in 1968)

§ 1[b] Introduction—Related matters

Related Annotations are located under the Research References heading of this
Annotation.

§ 2. Summary

It is almost a universally accepted principle of the negotiable instruments law that an indorsement of a
negotiable instrument must be written upon the instrument itself,[2] or upon a paper attached thereto in such a
manner that it becomes a part thereof.[3] The decisions, however, are not in agreement as to whether an attached
paper, called an allonge, may be used only where the negotiable instrument itself is so full of prior indorsements that
it becomes necessary to attach an additional paper for further indorsements, or whether it may be used for the sake
of convenience even though the instrument is not full of prior indorsements.[4]

To render effective an indorsement on an attached paper, the attachment must be of a permanent nature, as by
tacking or pasting, so that the attached paper becomes in effect a part of the negotiable instrument.[5] An attachment
of a temporary nature, as by pinning, or folding one paper inside another, is generally not sufficient to constitute an
allonge.[6] Obviously then, if a signature is written upon a separate paper transferred with the negotiable instrument
but not physically attached thereto, such signature cannot generally constitute an indorsement of the negotiable
instrument.[7] On the other hand, a person may bind himself by contract to be liable as an indorser of a particular
negotiable instrument even though his signature does not appear on the instrument or upon a paper attached thereto.
[8] In this type of situation, however, liability is not based upon the actual indorsement of a note, but simply upon
the contract itself.

§ 3. Rule that ordinarily indorsement must be on instrument

[Cumulative Supplement]
For an indorsement of a negotiable instrument to be valid, the almost universally accepted principle is that
under ordinary circumstances it must be written somewhere upon the instrument itself.US
Osgood's Admrs. v Artt (1883, CC Ill) 17 F 575
Ala
Gookin v Richardson (1847) 11 Ala 889

Crutchfield v Easton (1848) 13 Ala 337

Clark v Thompson (1915) 194 Ala 504, 69 So 925

Tennessee Val. Bank v Williams (1945) 246 Ala 563, 21 So 2d 686

Bailey v Mills (1952) 257 Ala 239, 58 So 2d 446

Ark
Buckner v Real Estate Bank (1844) 5 Ark 536

Troyer v Cameron (1923) 160 Ark 421, 254 SW 688

Cal
Hays v Plummer (1899) 126 Cal 107, 58 P 447

Lopez v Puzina (1966) 239 Cal App 2d 708, 49 Cal Rptr 122, 19 ALR3d 1291
Conn

© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.

 Wadhams v Vanderworken (1792) 1 Root 385
DC
Manzon v Greenwald (1958, Mun Ct App Dist Col) 145 A2d 575
Ga
National Bank of Columbus v Leonard (1893) 91 Ga 805, 18 SE 32

Haug v Riley (1897) 101 Ga 372, 29 SE 44, 40 LRA 244

Moore v Moore (1926) 35 Ga App 39, 131 SE 922

Ill
Herring v Woodhull (1862) 29 Ill 92

Brown v Bookstaver (1892) 141 Ill 461, 31 NE 17

Farmers Trust Co. v Schenuit (1899) 83 Ill App 267

Williams v Frederick's Estate (1937) 289 Ill App 410, 7 NE2d 384
Ind
Kern v Hazlerigg (1859) 11 Ind 443

French v Turner (1860) 15 Ind 59

Keller v Williams (1875) 49 Ind 504

Williams v Osbon (1881) 75 Ind 280

Iowa
Franklin v Twogood (1865) 18 Iowa 515

Hawkeye Secur. F. Ins. Co. v Central Trust Co. (1928) 208 Iowa 573, 221 NW 486
Ky
Hathaway v Morris (1872) 6 Ky Ops 167

Lyons v Hager's Admr. (1939) 278 Ky 99, 128 SW2d 196

Traders Deposit Bank v Chiles, Thompson & Co. (1893) 14 Ky LR 617

Me
Town of Freeport v. Ring, 1999 ME 48, 727 A.2d 901, 38 U.C.C. Rep. Serv. 2d (CBC) 1225 (Me. 1999)
Mass
Folger v Chase (1836) 35 Mass (18 Pick) 63
Mo
Bishop v Chase (1900) 156 Mo 158, 56 SW 1080

Cockrell v Taylor (1940) 347 Mo 1, 145 SW2d 416

Neb
Doll v Hollenbeck (1886) 19 Neb 639, 28 NW 286

Jackson State Bank v Laurel Nat. Bank (1924) 111 Neb 744, 197 NW 389

Plattsmouth State Bank v Redding (1935) 128 Neb 268, 258 NW 661
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19 A.L.R.3d 1297 (Originally published in 1968)

NC
Midgette v Basnight (1917) 173 NC 18, 91 SE 353

Commercial Secur. Co. v Main Street Pharmacy (1917) 174 NC 655, 94 SE 298
Tex
Lamm v Pates (1930, Tex Civ App) 26 SW2d 361, error ref

First State Bank v Petrucha (1931, Tex Civ App) 38 SW2d 138, error dismd

First Nat. Bank v Bell (1935, Tex Civ App) 88 SW2d 119, error dismd.
Vt
Partridge v Davis (1848) 20 Vt 499
Va
Colona v Parksley Nat. Bank (1917) 120 Va 812, 92 SE 979
Wash
Swenson v Stoltz (1904) 36 Wash 318, 78 P 999
Wis
Crosby v Roub (1863) 16 Wis 616

Bange v Flint (1870) 25 Wis 544

Bergmann v Puhl (1928) 195 Wis 120, 217 NW 746, 56 ALR 915

CUMULATIVE SUPPLEMENT

Cases:

Signature on separate unattached paper is not an "indorsement" of the commercial paper. D.C. Code 1981, §
28:3-204(a). Big Builders, Inc. v. Israel, 709 A.2d 74 (D.C. 1998).

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§ 4[a] Rule that indorsement may be on attached paper—Generally

[Cumulative Supplement]
The rule that an indorsement of a negotiable instrument may be written on an attached paper has been
recognized in the following cases, without consideration of the question whether such rule is subject to the condition
that no space for indorsement is available on the instrument itself.[9]US
Penn Mut. Indem. Co. v Commissioner (1960, CA3) 277 F2d 16
Ala
Crutchfield v Easton (1848) 13 Ala 337

Tennessee Val. Bank v Williams (1945) 246 Ala 563, 21 So 2d 686

Ark
Buckner v Real Estate Bank (1844) 5 Ark 536

Troyer v Cameron (1923) 160 Ark 421, 254 SW 688

© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.

Cal
Lopez v Puzina (1966) 239 Cal App 2d 708, 49 Cal Rptr 122, 19 ALR 3d 1291
DC
Manzon v Greenwald (1958, Mun Ct App Dist Col) 145 A2d 575
Ga
Moore v Moore (1926) 35 Ga App 39, 131 SE 922
Ill
Herring v Woodhull (1862) 29 Ill 92

Farmers Trust Co. v Schenuit (1899) 83 Ill App 267

Williams v Frederick's Estate (1937) 289 Ill App 410, 7 NE2d 384
Iowa
Hawkeye Secur. F. Ins. Co. v Central Trust Co. (1928) 208 Iowa 573, 221 NW 486
Ky
Lyons v Hager's Admr. (1939) 278 Ky 99, 128 SW2d 196

Traders Deposit Bank v Chiles, Thompson & Co. (1893) 14 Ky LR 617

Me
Hills v Gardiner Sav. Institution (Me) 309 A2d 877
Neb
Jackson State Bank v Laurel Nat. Bank (1924) 111 Neb 744, 197 NW 389
NC
Midgette v Basnight (1917) 173 NC 18, 91 SE 353
Tex
Lamm v Bates (1930, Tex Civ App) 26 SW2d 361, error ref

First State Bank v Petrucha (1931, Tex Civ App) 38 SW2d 138, error dismd

First Nat. Bank v Bell (1935, Tex Civ App) 88 SW2d 119, error dismd.
Vt
Partridge v Davis (1848) 20 Vt 499
Va
Colona v Parksley Nat. Bank (1917) 120 Va 812, 92 SE 979
Wash
Swenson v Stoltz (1904) 36 Wash 318, 78 P 999

An indorsement of a negotiable instrument written on another piece of paper to which the negotiable instrument
is pasted is a valid indorsement, it was held in Crutchfield v Easton (1848) 13 Ala 337. The negotiable instrument
itself had been torn into three pieces, but the pieces were pasted together on a separate piece of paper about the size
of the note. The indorsement was made on the back of this paper. The court said that ordinarily an indorsement is
made on the back of the note itself, but that an indorsement made on a piece of paper attached to the note, called an
allonge, is also a sufficient indorsement.

CUMULATIVE SUPPLEMENT

Cases:

Under Massachusetts law, proper negotiation of instrument payable to identified person requires holder's
written endorsement on instrument itself or on separate paper that is firmly affixed to promissory note. M.G.L.A. c.
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19 A.L.R.3d 1297 (Originally published in 1968)

106, § 3–104(a). New Haven Savings Bank v. Follins, 431 F. Supp. 2d 183 (D. Mass. 2006) (applying
Massachusetts law).
In action on note held by plaintiff as trustee for 15 beneficiaries, court held, on reversing summary judgment for
plaintiff (1) that summary judgment for plaintiff was precluded by fact issue as to whether transfer document
containing transferror's endorsement of note to plaintiff was so firmly affixed to note as to become part thereof
within meaning of UCC § 3-202(2); (2) that even if transfer document were so firmly attached to note as to satisfy
statutory definition of endorsement, note's 15 beneficiaries were not "holders in due course" because their lack of
possession of note caused them not to be "holders" under definition in UCC § 1-201(20); and (3) that defendant
maker's defenses of misrepresentation and fraud in inducement should not have been barred by trial court as matter
of law. Bryen v Krassner (1986) 208 NJ Super 639, 506 A2d 803, 1 UCCRS2d 1568, certif den 105 NJ 583, 523
A2d 210.
See Slutsky v Blooming Grove Inn, Inc. (1989, 2d Dept) 147 App Div 2d 208, 542 NYS2d 721, § 6[a].
Writing which was physically attached to note and which purported to be "for collection purposes" constituted
restrictive indorsement under UCC § 3-205. Booker v Everhart (1977) 33 NC App 1, 234 SE2d 46, revd on other
grds 294 NC 146, 240 SE2d 360, 24 UCCRS 165.
If an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument
and its indorsement by the holder; the indorsement must be written by or on behalf of the holder and on the
instrument or on a paper so firmly affixed to it as to become part of it. V.T.C.A., Bus. & C. § 3.201(b). Leavings v.
Mills, 175 S.W.3d 301, 54 U.C.C. Rep. Serv. 2d 678 (Tex. App. Houston 1st Dist. 2004).
UCC § 3-202(2), requiring indorsement to be on instrument itself or on paper "so firmly affixed" to instrument
as to become part thereof, evidences clear intent to restrict use of "allonge" (paper annexed to note for purpose of
writing indorsements thereon where instrument itself has insufficient space for such indorsements). Estrada v River
Oaks Bank & Trust Co. (Tex Civ App) 550 SW2d 719, error ref n r e.
Where (1) maker executed three notes in favor of corporation A, (2) corporation A's president endorsed notes,
and also deeds of trust securing them, to corporation B without indicating thereon his representative status or
connection with corporation A, and (3) corporation B properly endorsed notes and deeds of trust to plaintiffs, who
then sued maker for balance due on notes and foreclosure of deeds of trust that secured them, court held (1) that
plaintiffs were not holders of notes in due course under UCC § 3-302(1) because (a) bare signature of corporation
A's president on notes did not constitute corporation A's corporate endorsement of notes, and (b) under UCC § 3-
202(1), notes could only be negotiated by delivery with necessary endorsements, (2) that corporation B acquired
only legal title to notes and right under UCC § 3-201(3) to obtain proper endorsements thereof, which right
corporation B did not exercise, (3) that as a result, plaintiffs acquired only such legal title as corporation B
possessed, (4) that any indication in deeds of trust that person who endorsed notes on behalf of corporation A was
corporation A's president could not support plaintiffs' contention that notes were properly negotiated, since deeds of
trust were not attached to notes in conformity with requirement of UCC § 3-202(2) that if endorsement is on
separate paper, such paper must be so firmly attached to instrument as to be part thereof, (5) that since plaintiffs took
notes with notice of facial insufficiency of original payee's endorsements, they took with notice under UCC § 3-
304(1)(b) that obligation of any party was voidable and did not meet holder-in-due-course requirement of UCC § 3-
302(1)(c) that taking must be without notice of any defense to notes on part of any person, and (6) that more
specifically, plaintiffs did not take notes under UCC § 3-305(2) free of defenses of defendant maker with whom they
had not dealt. Fines v Stock (1984) 37 Wash App 101, 678 P2d 839, 38 UCCRS 910.

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[END OF SUPPLEMENT]

§ 4[b] Rule that indorsement may be on attached paper—Held applicable if space is not available on
instrument

[Cumulative Supplement]
In some cases it has been held or indicated that an indorsement of a negotiable instrument may be written on an

© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.

attached paper only if the instrument is so covered with writing that space for indorsement is not available thereon
and an additional slip of paper must be attached thereto to accommodate subsequent indorsements.Ala
Clark v Thompson (1915) 194 Ala 504, 69 So 925

Bailey v Mills (1952) 257 Ala 239, 58 So 2d 446

Cal
Hays v Plummer (1899) 126 Cal 107, 58 P 447
Ill
See Brown v Bookstaver (1892) 141 Ill 461, 31 NE 17, infra
Ind
French v Turner (1860) 15 Ind 59

See also Keller v Williams (1875) 49 Ind 504, infra.

Iowa
Franklin v Twogood (1865) 18 Iowa 515
Mass
See Folger v Chase (1836) 35 Mass (18 Pick) 63, infra
Mo
Bishop v Chase (1900) 156 Mo 158, 56 SW 1080
Neb
Doll v Hollenbeck (1886) 19 Neb 639, 28 NW 286

See also Plattsmouth State Bank v Redding (1935) 128 Neb 268, 258 NW 661, infra.
Wis
Bergmann v Puhl (1928) 195 Wis 120, 217 NW 746, 56 ALR 915

But see the Wisconsin cases referred to in § 4[c], infra.

An indorsement of a promissory note written upon a piece of paper pinned to the note itself is not a sufficient
indorsement where convenience is the only reason given for not signing upon the actual note, it was held in Bishop v
Chase (1900) 156 Mo 158, 56 SW 1080. The court said that an indorsement of a negotiable instrument must be
written upon the instrument itself except where the back is so covered with prior indorsements that it becomes
necessary to use a separate paper, called an allonge, attached to the note in such a way that it becomes a part thereof.
In the following cases it has also been held or recognized that an indorsement of a negotiable instrument may be
written on an attached paper where the instrument itself is already covered with other indorsements; the courts in
these cases, however, did not indicate or suggest that this is the only situation where a separate paper may be
attached for indorsement.
An indorsement on a piece of paper attached to a promissory note by paste was held to be a sufficient
indorsement of the note, since the note itself was filled with prior indorsements, in Brown v Bookstaver (1892) 141
Ill 461, 31 NE 17. The court said that generally a negotiable instrument must be indorsed on the back of the
instrument itself, since that is the meaning of the word "indorsement." However, the court pointed out, where the
back of the instrument is so covered with prior indorsements as to make it necessary, an extra piece of paper, called
an allonge, may be tacked or pasted on the instrument, and all future indorsements may be made on the attached
paper.
The rule that an indorsement may be written on an attached paper where the instrument itself is already covered
with other indorsements was recognized in Keller v Williams (1875) 49 Ind 504.
An indorsement of a promissory note written on a slip of paper attached to the note by a wafer was held to be a
valid indorsement in Folger v Chase (1836) 35 Mass (18 Pick) 63. The paper was attached to the note because the
note itself was already covered with indorsements. Several indorsements had been made on the attached paper, and
the court said that the paper had become a part of the note. The court added that no good reason could be given why
such an indorsement should not be valid, pointing out that the only reasons for requiring an indorsement to be on the
 19 A.L.R.3d 1297 Page 13
19 A.L.R.3d 1297 (Originally published in 1968)

instrument itself are convenience in transferring such a note, and to enable the evidence of such transfer to
accompany the note.
Holding that where the back of a promissory note is filled with indorsements, another sheet of paper of similar
size may be attached thereto for the sole purpose of providing room for further necessary indorsements, the court in
Plattsmouth State Bank v Redding (1935) 128 Neb 268, 258 NW 661, said that the words "a paper attached thereto"
do not mean an assignment of the note, which may be written as a separate instrument, but only an allonge. An
allonge was defined by the court as a strip of paper stapled or pasted onto the negotiable instrument in such a way
that it becomes a part of the instrument.

CUMULATIVE SUPPLEMENT

Cases:

UCC § 3-202(2), which provides that indorsement must be written on negotiable instrument itself or on paper so
firmly affixed to instrument as to become part thereof, does not state whether such paper, which is called an
"allonge," can be used if there is still room for writing indorsement on instrument itself. However, UCC § 1-103
provides that principles of law and equity, including law merchant, supplement provisions of Uniform Commercial
Code unless displaced by particular code provisions; and under majority view, law merchant permits use of allonge
only if there is no room for placing indorsement on negotiable instrument itself. Pribus v Bush (1981, 4th Dist) 118
Cal App 3d 1003, 173 Cal Rptr 747, 31 UCCRS 599.
An "allonge" is a piece of paper attached to a promissory note on which parties write endorsements for which
there is no room on the instrument itself. Milestone v. David, 251 Ga. App. 832, 2001 WL 1191373 (2001).
See Bremen Bank & Trust Co. v Muskopf (1991, Mo App) 817 SW2d 602, § 5[a].

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§ 4[c] Rule that indorsement may be on attached paper—Held applicable even if space is available on
instrument

The following cases have taken the view that an indorsement of a negotiable instrument may be written on an
attached paper where it is convenient to do so, even though space for such indorsement is available on the
instrument itself.
The only established exception to the general rule that an indorsement of a negotiable instrument must be on the
instrument itself is where the indorsement is made on a piece of paper so attached to the original instrument that it
becomes, in effect, a part of it, the court said in Osgood's Admrs. v Artt (1883, CC Ill) 17 F 575. Noting that this
attachment, called an allonge, originated in cases where the back of the instrument itself had been covered with
indorsements or other writing, leaving no room for further indorsements thereon, the court further said that an
indorsement attached in the proper manner would perhaps be sufficient even if there had been enough space for it on
the original instrument.
In Haug v Riley (1897) 101 Ga 372, 29 SE 44, 40 LRA 244, infra § 6[a], it was recognized that "when
necessary or convenient," a separate paper may be attached for indorsement.
In Commercial Secur. Co. v Main Street Pharmacy (1917) 174 NC 655, 94 SE 298, the court, although noting
that historically an allonge was resorted to where there was no longer any room on the note itself for a signature, due
to the number of signatures already there, said that in the better-reasoned decisions it is not absolutely necessary that
there be no more space on the note itself.
An indorsement of a promissory note may be written upon a separate piece of paper provided that it is attached
to the note itself, it was held in Heister v Gilmore (1862, Pa) 5 Phila 62, 2 Luzerne Leg Obs 290. The separate paper,
called an allonge, was fastened to the promissory note with pins. The contention that the allonge could not be used

© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.

until the back of the note was so full of indorsements that more space was necessary was rejected, the court saying
that there seems to be an unlimited power to make use of an allonge whenever it is convenient to do so. In fact and
in law, the court added, the signature on the attached paper in question was authority to the holder of the note to
write that name on the back of the note at any subsequent time. The court further stated, as dictum, that another
situation where it seems necessary and proper to use a separate paper for an indorsement is where the note itself has
been mislaid, or is at a distance.
The transfer of a promissory note and mortgage by attaching thereto a negotiable bond of a company, and
indorsing the bond to make it transferable in connection with the note and mortgage, is a good and sufficient
indorsement of the promissory note to pass the legal title thereto, it was held in Crosby v Roub (1863) 16 Wis 616.
The court pointed out that if the bond had actually been written on the back of the promissory note, it would clearly
have passed the title. The only question, therefore, was whether the fact that such writing was on a separate paper
attached to the note would prevent it from being a good indorsement. The court said that every decision involving
such a question said that a separate paper, called an allonge, could be so used. However, the court observed, the
usual reason given for permitting such an indorsement is that there is no more room for it on the note itself. The
court then pointed out that this does not mean that there must be an actual, physical impossibility to write the
indorser's name on the original paper. On the contrary, the court added, the usage of the mercantile law is founded in
convenience. When it is inconvenient to write on the back of the note, the indorsement may be written on another
paper and attached to the note, with the same legal effect. The court said that there were no cases involving a
signature on another piece of paper, plainly intended to operate as an indorsement of the note to which it was
attached, which had held that the legal title to the note would not pass thereby.
In Bange v Flint (1870) 25 Wis 544, the court held that a writing upon a railroad bond attached to a promissory
note and a mortgage was a sufficient indorsement of the promissory note. The court said that this was clearly the
intention of the parties, and that thus the legal title to the note passed by such indorsement even though it was
apparently not necessary to indorse the note on the separate paper.
The rule that an indorsement of a negotiable instrument may be written on an attached paper even though space
for such indorsement is available on the instrument itself was apparently recognized in Murphy v Dunning (1872) 30
Wis 296.
But see Bergmann v Puhl (1928) 195 Wis 120, 217 NW 746, 56 ALR 915, supra § 4[b].

§ 5[a] Degree of attachment necessary—Tacking or pasting of attached paper

[Cumulative Supplement]
The following cases have held or recognized that a paper must be attached to a negotiable instrument by tacking
or pasting in order to render the signatures thereon effective as indorsements of the instrument.[10]
In Bailey v Mills (1952) 257 Ala 239, 58 So 2d 446, the court said that an allonge, in order to be valid, must be
tacked or pasted onto the negotiable instrument itself in such a way that it becomes a part thereof. To the same effect
is Clark v Thompson (1915) 194 Ala 504, 69 So 925.
The rule that a separate paper for indorsement must be attached to the negotiable instrument by tacking or
pasting was also apparently recognized in Brown v Bookstaver (1892) 141 Ill 461, 31 NE 17, supra § 4[b].
In Plattsmouth State Bank v Redding (1935) 128 Neb 268, 258 NW 661, the court described an allonge as a
strip of paper attached to the negotiable instrument by stapling or pasting in such a manner that it becomes a part
thereof.
See also the following cases in which the court, without considering the question of degree of attachment,
upheld as effective an indorsement written on a paper attached to the instrument by pasting: Crutchfield v Easton
(1848) 13 Ala 337, supra § 4[a]; Folger v Chase (1836) 35 Mass (18 Pick) 63, supra § 4[b].

CUMULATIVE SUPPLEMENT

Cases:

Agreement reciting that bank negotiated checks to plaintiff which was stapled to checks in question was
 19 A.L.R.3d 1297 Page 15
19 A.L.R.3d 1297 (Originally published in 1968)

effective as indorsement. Lamson v. Commercial Credit Corp., 187 Colo. 382, 531 P.2d 966, 16 U.C.C. Rep. Serv.
756 (1975).
Endorsement on negotiable instrument must be written by, or on behalf of, holder and on instrument or on paper
so firmly affixed thereto as to become part of instrument; endorsement pinned or clipped to instrument is not
sufficient but must be on instrument itself or on paper called "allonge," which is so firmly affixed to instrument as to
become extension or part of it. Allonge is piece of paper annexed to instrument on which to write endorsements for
which there is no room on instrument itself. Bremen Bank & Trust Co. v Muskopf (1991, Mo App) 817 SW2d 602.
Bank which took four notes from debtor, which were executed to debtor by third party and assigned by debtor
to bank as collateral for another note that debtor executed to bank, was not holder in due course of such notes where
(1) debtor did not indorse notes; (2) debtor's signature on single collateral assignment did not constitute indorsement
of notes under UCC § 3-202(2), even though such assignment was stapled to notes and expressly referred to them,
since assignment was not "so firmly affixed" to notes as to become extension or part of each note; and (3) doctrine
of incorporation by reference would not be extended to indorsements of negotiable instruments. Estrada v River
Oaks Bank & Trust Co. (Tex Civ App) 550 SW2d 719, error ref n r e.

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§ 5[b] Degree of attachment necessary—Attachment of temporary nature

[Cumulative Supplement]
A paper attached to a negotiable instrument in a temporary manner, as by pinning, has been held not sufficient
to render signatures thereon to be valid indorsements of the instrument.
A mortgage temporarily pinned to a promissory note was held not to be an indorsement of the promissory note
in Clark v Thompson (1915) 194 Ala 504, 69 So 925. The court pointed out that an indorsement of a negotiable
instrument must be on the instrument itself, or on an allonge. An allonge was described as a slip of paper tacked or
pasted to the instrument so that it becomes a part thereof. The court added that the statutory provision permitting the
use of an allonge was certainly not meant to establish the loose and undesirable practice of making regular
indorsements of commercial paper upon any other paper to which it might be temporarily attached, such as by
pinning, especially where there is ample space for indorsements on the back of the instrument itself. The court said
that the evidence did not show that the note was pinned to the mortgage when they were transferred to the defendant,
but only that they were so attached when delivered to the payee nearly a year before. The court could not presume
that such a superficial fastening, evidently for temporary convenience only, still existed at the date of the transfer.
However, the court observed, whether or not they were so pinned at that time did not matter, since the transfer
should be treated only as an assignment and not as an indorsement.
An indorsement of a negotiable instrument written upon a separate and entirely distinct slip of paper is not a
proper indorsement of the instrument and cannot be given legal effect, it was held in Bailey v Mills (1952) 257 Ala
239, 58 So 2d 446, wherein a promissory note, a mortgage, and an instrument of assignment were transferred while
attached by a gem clip. Concluding that this was not sufficient to be a negotiation of the note, and that thus the
receivers thereof could not be holders in due course, the court pointed out that a separate paper for indorsement must
be tacked or pasted onto the negotiable instrument itself in such a way that it becomes a part thereof. The court
observed that the statute permitting the use of an allonge was not intended to establish the loose and undesirable
practice of making regular indorsements of commercial paper by a writing on the back of a separate slip of paper to
which it might be temporarily attached, such as by pinning. This is especially true, the court added, where there is
ample space for indorsements on the back of the instrument itself.
See National Bank of Columbus v Leonard (1893) 91 Ga 805, 18 SE 32, where it was held that an indorsement
upon a promissory note within which another promissory note was folded could not act as an indorsement of the
latter.
But see setoutHeister v Gilmore (1862, Pa) 5 Phila 62, 2 Luzerne Leg Obs 290, where the paper on which the
indorsement was written was attached to the promissory note by pins, and this was held to be a valid indorsement of

© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.

the promissory note.

CUMULATIVE SUPPLEMENT

Cases:

Signature of payee on single collateral assignment slip, which was stapled to four unendorsed notes, did not
constitute endorsement of notes, and assignee was not holder in due course of notes; under UCC § 3-202, collateral
assignment could not be considered to be so firmly affixed to four notes as to become extension or part of each one.
Estrada v River Oaks Bank & Trust Co. (Tex Civ App) 550 SW2d 719.

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§ 6[a] Indorsement on paper not physically attached to instrument—Held not effective

[Cumulative Supplement]
In the following cases it has been held that if the paper on which a signature is written is not physically attached
in some manner to a negotiable instrument, the signature thereon cannot be treated as an indorsement of the
instrument.
Promissory notes transferred while inclosed in a metal notecase could not be indorsed by a writing on an
instrument delivered therewith on top of the notecase, it was held in Tennessee Val. Bank v Williams (1945) 246
Ala 563, 21 So 2d 686. An Alabama statute provided that an indorsement of a negotiable instrument must be written
on the instrument itself or upon a paper attached thereto. The court said that the writing on the instrument of
transfer, on top of the notecase, was neither on the promissory note itself, nor on a paper attached thereto, and thus
could not be an indorsement of the note.
A promissory note cannot be indorsed on a separate paper not attached thereto, under a statute providing that an
indorsement must be written upon the instrument itself or on an attached paper, it was held in Lopez v Puzina (1966)
239 Cal App 2d 708, 49 Cal Rptr 122, 19 ALR3d 1291, affirming the judgment for defendant in the lower court. The
alleged indorsement was written by the defendant on a separate instrument entitled "Assignment of Deed of Trust,"
which was conveyed with the promissory note but was not physically attached to it. The plaintiff, attempting to
recover from the defendant on the promissory note on the theory that the defendant was an indorser thereof, alleged
that an indorsement could be made on a separate paper if it contained more than just a bare signature. The court,
denying this contention, emphasized the wording of the statute that an indorsement, if not written on the instrument
itself, "must be written. . . upon a paper attached thereto." The court then distinguished cases cited by the plaintiff
which were decided in a jurisdiction having no statute like the one involved in this case. The plaintiff also contended
that this signature should be treated as an effective indorsement under the general rule of contracts that where two or
more written instruments relating to the same subject matter are executed as parts of substantially one transaction,
they are to be construed together as one contract. The court rejected this argument by pointing out that this rule
applies only to the construction of contracts, and has no reference, either directly or indirectly, to the requirement as
to indorsements found in the negotiable instruments law. The court, holding the defendant merely an assignor of the
note, quoted with approval from an earlier California case which stated that a signature written upon another paper,
to be a valid indorsement, must be so written as to become in effect a part of the instrument. The court also
distinguished a case which held the defendants therein liable under a contract providing that they would be liable as
indorsers, even though their signatures did not appear on the note itself. In that case, the court pointed out, liability
was based not upon an indorsement of the note, but upon a separate valid contract to be liable as indorsers.
An indorsement of a promissory note within which is folded another promissory note cannot operate as an
indorsement of the latter, even if this was the intention of the parties, it was held in National Bank of Columbus v
Leonard (1893) 91 Ga 805, 18 SE 32.
 19 A.L.R.3d 1297 Page 17
19 A.L.R.3d 1297 (Originally published in 1968)

A writing upon a separate and entirely distinct instrument cannot serve the purpose of an indorsement of a
negotiable instrument, it was held in Haug v Riley (1897) 101 Ga 372, 29 SE 44, 40 LRA 244. The negotiable
instrument in question, a promissory note, was assigned as collateral to another party, with the assignment written
on a paper other than the note itself. The maker of the note contended that this assignment passed the title of the note
to the third party, so that the assignor could not bring this action on the note after reclaiming it. The court held that
the assignor could not indorse the note by the writing on the separate paper, and that thus the title to the note did not
pass. The court said: "The fact that the maker expressly stipulates that he shall be called upon to pay none other than
one to whom the instrument is transferred by regular indorsement should answer, as furnishing a sufficient reason
upon which this rule may rest. . . . Another and equally important reason may, however, be given. It is indispensably
necessary, if such instruments are to fulfil the object for which they were designed, that they should carry with them
the indicia by which their ownership is to be determined; otherwise, their value as a circulating medium would be
largely curtailed, if not entirely destroyed. Adding an 'allonge,' when necessary or convenient, is permissible only
because furthering the object of their creation, viz., free and unrestrained negotiability. This is and can be the only
exception to the rule that the indorsement to pass the legal title must be entered upon the instrument itself. If this
rule were so relaxed as to admit of transfer evidenced by an independent slip of paper, unattached to and forming no
part of the instrument, the sole purpose it was intended to subserve would be defeated; for it would necessarily lose
one of the most essential characteristics of 'negotiable' paper, in the ordinary and technical sense of that term, and
would stand upon practically no better footing, as a circulating medium, than strictly 'nonnegotiable' choses in
action."
An indorsement made upon a mortgage transferred with a promissory note, but not attached thereto, is not an
indorsement of the promissory note, it was held in French v Turner (1860) 15 Ind 59. The court said that an
indorsement of a promissory note must be on the note itself, or on another paper annexed thereto, called an allonge,
where there are many successive indorsements to be made. The indorsement in question, made upon the mortgage,
referred to the note but was not written upon it or on an attached paper. Therefore, the court said, such an
indorsement cannot place the assignor of the note in the condition of a legal indorser.
A promissory note is not indorsed by a writing upon a separate instrument made for an independent purpose,
even though the separate instrument is transferred with the note, it was held in Franklin v Twogood (1865) 18 Iowa
515. The court said that ordinarily a promissory note must be indorsed upon the instrument itself, or where there are
too many indorsements thereon, it may be indorsed upon a paper attached to the note, called an allonge. The court
pointed out that there was no evidence to show a necessity for adding an allonge in this case, but did not base its
decision on this fact. It added that the separate paper, on which the alleged indorsement was made, was an entirely
separate instrument made between different parties for a distinct purpose, and was an independent obligation in
itself. It could not be considered, the court said, as a part of the promissory note. The court then answered the
hypothetical question of why an indorsement of a note would be good if written upon one piece of paper and not
good if written on another, by saying that the advantages of such a distinction were learned from experience in the
commercial world, and incorporated into the law.
A negotiable instrument cannot be indorsed by a writing on a separate paper executed for a wholly different and
distinct purpose, it was held in Traders Deposit Bank v Chiles, Thompson & Co. (1893) 14 Ky LR 617. The separate
paper was merely a deposit slip with a list of several deposits, including the note in question, made by the defendant
into the plaintiff's bank. This deposit slip was signed with the initials "L.T.C." The court said that an indorsement of
a negotiable instrument can only be made upon the instrument itself, or on a piece of paper, called an allonge, so
attached to it that it becomes a part thereof.
A writing on the back of a mortgage which accompanied a promissory note, but was not attached thereto, could
not be treated as an indorsement of the note itself, it was held in Doll v Hollenbeck (1886) 19 Neb 639, 28 NW 286.
The court said that the only exception to the rule that an indorsement of a promissory note must be written upon the
note itself is where the back of the note is so covered with indorsements that it becomes necessary to attach an
additional slip of paper thereto, by tacking or pasting, for subsequent indorsements. The court added that since there
was plenty of space available on the note itself for such indorsements, it would be a forced and inadmissible
construction to treat the mortgage as an allonge of the note.
A writing on a separate paper not attached to a promissory note cannot serve as an indorsement of the
promissory note, it was held in Commercial Secur. Co. v Main Street Pharmacy (1917) 174 NC 655, 94 SE 298. The
court said that an indorsement of a promissory note must be written on the instrument itself, or on a paper attached

© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.

thereto, called an allonge.
In Bergmann v Puhl (1928) 195 Wis 120, 217 NW 746, 56 ALR 915, the court held that a promissory note was
not indorsed by a letter attached to the note after transference thereof, purporting to be a guaranty of the note. The
letter was mailed to the holder of the note with instructions to attach it to the note until such time as the sender could
actually sign the note. The court said that the plaintiff had wholly misconceived the effect of attaching to a note a
separate document executed subsequently to the making and delivery of the promissory note. The court said that an
indorsement must be upon the instrument itself, or where it has no more space available for further indorsements,
upon a slip of paper attached thereto called an allonge. The letter subsequently attached to the note in question, the
court said, did not comply with the requirements of an allonge.

CUMULATIVE SUPPLEMENT

Cases:

Signature upon application for cashier's check is ineffective where not upon check itself or paper attached
thereto. Wright v Bank of California, Nat. Asso. 276 Cal App 2d 485, 81 Cal Rptr 11.
Document purporting to transfer and assign promissory note which was never attached to note did not serve as
effective endorsement of note under UCC § 3-202(2). Billas v Dwyer, 140 Ga App 774, 232 SE2d 102.
Taxpayer's signature included within letter accompanying check that was payable to order of taxpayer, that did
not contain taxpayer's signature, and that taxpayer sent to town in effort to redeem property prior to automatic
foreclosure of real estate tax lien was not a valid indorsement, where letter was not physically attached to check. 11
M.R.S.A. §§ 3–1204(1), 3–1205(1); 36 M.R.S.A. §§ 552, 942, 943. Town of Freeport v. Ring, 1999 ME 48, 727
A.2d 901, 38 U.C.C. Rep. Serv. 2d (CBC) 1225 (Me. 1999).
Signature on separate document not attached to promissory note did not serve as endorsement of note even
though document stated that signatory was endorsing note and document incorporated note by reference. Hills v
Gardiner Sav. Institution (Me) 309 A2d 877.
In action on note payable to trustee on named trust, which was assigned by payee to plaintiff holder, court held
(1) that plaintiff was not holder in due course because payee had failed to indorse note, as required by UCC § 3-
202(1); (2) that payee's signing of instrument that assigned note did not constitute indorsement of note under UCC §
3-202(2) because assignment instrument was not so firmly affixed to note as to be part thereof; (3) that plaintiff
nevertheless was entitled to judgment on note because, under UCC § 3-201(1), he had acquired all rights of his
transferor subject to any defenses available against transferor, but such defenses could not be raised in present case;
(4) that defendant makers could not successfully claim that because (a) note had been made payable to transferor as
trustee of named trust, and (b) transferor had transferred note to plaintiff in transferor's individual capacity and in
payment of individual debt owed to plaintiff, plaintiff had had notice of claim against note within meaning of UCC §
3-304(2), since under UCC § 3-306(d), claim of third person to instrument is not available as defense to any party
liable on instrument unless third person himself defends action for party liable, which did not occur in present case;
and (5) that payee of note clearly had power to transfer note to plaintiff because UCC § 3-117(b), although
providing expressly that instrument payable to named person as fiduciary may be "negotiated" by such payee, also
contemplates attempted, but ineffective, negotiation. Duxbury v Roberts (1983) 388 Mass 385, 446 NE2d 401.
In action to collect on note that secured mortgage, payee of note had standing to bring action, despite payee's
alleged assignment of note, since note did not include indorsement on note itself or on paper so firmly affixed to
note as to become part of note and thus note was never validly transferred from payee. Slutsky v Blooming Grove
Inn, Inc. (1989, 2d Dept) 147 App Div 2d 208, 542 NYS2d 721.
Under UCC § 3-202(2), a guaranty may have the effect of an indorsement if it is written on the instrument itself
or on a paper so firmly affixed thereto as to become a part of the instrument. However, a writing not on the
instrument itself or on an allonge, but on a separate, unattached paper, is not an indorsement and is not sufficient for
negotiation, or to confer the rights of an indorsee, or to impose the liability of an indorser. Shepherd Mall State Bank
v Johnson (1979, Okla) 603 P2d 1115, 27 UCCRS 1019.
Assignment included among documents accompanying draft, without endorsement upon instrument itself, was
not in compliance with commercial practices governing transaction. Penny v Kelley (Tex Civ App) 528 SW2d 330
 19 A.L.R.3d 1297 Page 19
19 A.L.R.3d 1297 (Originally published in 1968)

(citing annotation).
See Fines v Stock (1984) 37 Wash App 101, 678 P2d 839, 38 UCCRS 910, § 4[a].

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[END OF SUPPLEMENT]

§ 6[b] Indorsement on paper not physically attached to instrument—Held effective

In some cases an indorsement of a negotiable paper has been upheld as effective even though it was written on a
separate paper not physically attached to the instrument.
See also Hawkeye Secur. F. Ins. Co. v Central Trust Co. (1928) 208 Iowa 573, 221 NW 486, where the court
said that a provision of a statute that an indorsement of a negotiable instrument must be written upon the instrument
itself or upon a paper attached thereto did not necessarily mean that physical attachment at the time of the
indorsement is under all circumstances essential. However, the court added, there must be the intent (implied as the
legal result of the instrument if not expressed in terms) to indorse and to incur the liability of an indorser.
Holding that an indorsement of an instrument may be made on a separate piece of paper not annexed to the
instrument where the court and jury are satisfied that the paper containing the indorsement is identified with the
note, the court in Mosely v Graydon (1849) 35 SCL (4 Strobh) 7, upheld as effective an indorsement of a note which
was written on a separate paper not annexed to the note or attached to its back by a wafer. Noting that such separate
paper contained a description of the note, which the jury had found to be sufficient to identify the note and apply to
it the writing which was claimed to be an indorsement, the court said that this was certainly equal to, if not better
than, any annexation, especially where, as in the present case, both the note and the writing of indorsement were
found in the possession of the same person.
In First Nat. Bank v Bell (1935, Tex Civ App) 88 SW2d 119, error dismd, the court held that a written contract
by the payee of a promissory note transferring all of his assets (including the promissory note) to another party
would be a substantial compliance with the terms of the statute requiring an indorsement to be on the instrument
itself, or on a paper attached thereto. The court said that such a contract would be a "paper attached thereto" within
the contemplation of the statute.

§ 7. Contract to be liable as indorser

In at least one case a person contracting that he would be liable on a given note as an indorser thereof has been
held liable as an indorser even though his signature did not appear upon the instrument itself, or upon a paper
attached thereto.
A contract providing that the maker thereof would be liable as an indorser on a certain promissory note was
held to make such maker the equivalent of an indorser of the note, even though the contract was not attached to the
note, in Lyons v Hager's Admr. (1939) 278 Ky 99, 128 SW2d 196. The name of the maker of the contract did not
appear on the promissory note, and the contract was retained in a file separate from the note. The court said that it is
true that an indorsement must be written on the instrument itself or upon a paper attached thereto. However, the
court observed that it was not aware of any rule of law or public policy which would make invalid an agreement to
be liable as an indorser.[11]
RESEARCH REFERENCES

A.L.R. Library

A.L.R. Quick Index, Bills and Notes

Drawer's Right of Recovery Against Depositary Bank That Accepts Check with Missing Indorsement or in
Violation of Restrictive Covenant, 104 A.L.R.5th 459

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 Construction and application of UCC § 4-205(1) allowing depositary bank to supply customer's indorsement on
item for collection, 29 A.L.R.4th 631

What constitutes unconditional promise to pay under Uniform Commercial Code § 3-104(1)(b), 88 A.L.R.3d
1100

What constitutes "fraudulent and material" alteration of negotiable instrument under UCC § 3-407(2)(a), 88
A.L.R.3d 905

Guaranty of payment as covering principal debtor's liability as in indorser on third person's note or other
negotiable instrument, 85 A.L.R.2d 1183

Authority of agent to indorse and transfer commercial paper, 37 A.L.R.2d 453

Construction, applicability, and effect of provisions of Negotiable Instruments Law as to delivery of order paper
without indorsement, 87 A.L.R. 1178

Sufficiency of signing or indorsing bill or note by printing or stamping, 46 A.L.R. 1498

Legal Encyclopedias

Am. Jur. 2d, Bills and Notes § 353

Trial Strategy

Status as Accommodation Party, 7 Am. Jur. Proof of Facts 2d 283

583, Promissory Notes and Other Negotiable Instruments, 9 Am. Jur. Proof of Facts 573

Forms

18 Am. Jur. Legal Forms 2d, Uniform and Commercial Code § 253:2083

Section 1[a] Footnotes:

[FN1] The present annotation supersedes 56 ALR 921.

Section 2 Footnotes:

[FN2] § 3, infra.

[FN3] § 4, infra.

[FN4] §§ 4[b], 4[c], infra.

[FN5] § 5[a], infra.

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[FN6] § 5[b], infra.

[FN7] § 6, infra.

[FN8] § 7, infra.

Section 4[a] Footnotes:

[FN9] Cases recognizing or discussing the above rule in connection with the question of availability of
space on the instrument are exclusively treated in §§ 4[b] and 4[c], infra.

The provisions in the Uniform Commercial Code (see § 3-202(2)), and the Uniform Negotiable Instruments
Act (see § 31), which permit indorsement on an attached paper do not contain any limitations or conditions
in this respect.

Section 5[a] Footnotes:

[FN10] The Uniform Commercial Code (see § 3-202(2)) provides that an indorsement must be written on a
paper so firmly affixed to the instrument as to become a part thereof. The Uniform Negotiable Instruments
Act (see § 31), on the other hand, provides that an indorsement must be written on a paper attached to the
instrument.

Section 7 Footnotes:

[FN11] The Lyons Case above was distinguished in Lopez v Puzina (1966) 239 Cal App 2d 708, 49 Cal
Rptr 122, 19 ALR3d 1291, supra § 6[a], on the ground that the liability in the Lyons Case was not based on
an actual indorsement, but upon a contract.

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19 A.L.R.3d 1297

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