chant is, that by expressing the contract of transfer which is always implied from the mere fact of indorsement, the negotiator of the paper has manifested a purpose to destroy the negotiable character of such paper. But the courts, with the two exceptions above noted, have refused to draw such an inference from the fact that an assignment in terms is written above the indorsement. On what principle, then, can it be said that the fact that a guaranty is written above the indorsement discloses a purpose to affect the negotiable character of the paper. Such a contract is an indorsement, and it is more. It is, indeed, under our statute, exactly equivalent to an indorsement with waiver of demand and notice. An indorser who is not entitled to insist upon 419 demand and notice, or who, being so entitled, has been charged as an indorser, is a guarantor of the payment of the instrument: See Rev. Code, secs. 4636, 4642, 4876, 4881. But, even if we were of opinion that his liability was different from that of an ordinary indorser-even if we should conclude that in some respects his obligation was more, and in other particulars less, onerous than that of one who indorses in blank-still the fact would remain that he had transferred the legal title to the paper in a mode sufficient to transfer such legal title according to principles of common law, and that he had not evinced a purpose to destroy the negotiable character of the paper. In such a case it would be true that he had indorsed it, notwithstanding the fact that he had so indorsed it as to alter his liability as an ordinary indorser. As we have already seen, the fact that the exact liability of an indorser is not incurred by one who transfers negotiable paper is not the true criterion whether the purchaser is an indorsee within the scope of the doctrine which throws about an indorsee a distinctive protection. One who is payee or is the holder of negotiable paper, and writes above his indorsement the contract of guaranty of payment, is an indorser with enlarged liability. It is on this ground that the decisions rest which hold that such a transfer of a negotiable instrument is an indorsement of it, within the purview of the rule which shields & bona fide indorsce against defenses good between the original parties: State Nat. Bank v. Haylen, 14 Neb. 480; Helmer v. Commercial Bank, 28 Neb. 474; Partridge v. Davis, 20 Vt. 499; Robison v. Lair, 31 Iowa, 9; Buck v. Davenport Sav. Bank, 29 Neb. 407; 26 Am. St. Rep. 392; Van Zant v. Arnold, 31 Ga. 210; Judson v. Gookwin, 37 Ill. 286; Heaton v. Hulbert, 3 Scam. 489; Childs v. Davidson, 38 Ill. 437; Heard v. Dubuque etc. Bank, 8 Neb. 10; 30 Am. Rep. 811; 2 Daniel on Negotiable Instruments, sec. 1781. We are aware that authorities can be found on the

other side of the question: Trust Co. v. National Bank, 101 U. S. 70; Omaha Nat. Bank v. Walker, 5 Fed. Rep. 399; Tuttle v. Bartholomew, 12 Met. 454; Lamourieux v. Hewit, 5 Wend. 307; Belcher v. Smith, 7 Cush. 482; Taylor v. Binney, 7 Mass. 481. But Massachusetts at one time 420 inclined to the doctrine we regard as sound: Upham v. Prince, 12 Mass. 14; Balkely v. Grant, 6 Mass. 386.

In view of the fact that it has long been the usage in this state of persons and corporations engaged in the business of purchasing and discounting commercial paper to have the indorser sign a guaranty of payment, and in view of the further fact that the legal effect of such an indorsement is precisely the same as that of a simple indorsement with waiver of demand and notice, we would regard it as a very unwise and entirely unjustifiable decision to hold that such a negotiation of such paper was not an indorsement of it within the law merchant. That a guaranty indorsed by a payee on the paper itself is equivalent to an indorsement with waiver is clear under our statutes, and also independently of them, upon common-law principles. Said the court in Brown v. Curtiss, 2 N. Y. 225, at page 230: "The direct engagement of the indorser of a negotiable note, and of the guarantor of the payment of a note, whether negotiable or not, is the same. Both undertake that the maker will pay the amount when it shall become due. If there is a failure in such payment, both contracts are broken. Ordinarily, upon the breach of a contract, the party bound for its performance immediately becomes liable for the consequent damages. In the case of the indorser of a negotiable promissory note, however, the liability does not become absolute, unless due notice of nonpayment is given to the party whom it is intended to charge. This is not because the indorser has thus stipulated in terms, but it is a condition annexed by the rules of the commercial law. In the case of a guarantor there is nothing to exempt him from the ordinary liability of parties who have broken their contract, which is direct, and not conditional. No condition requiring notice of nonpayment is inserted in the contract, nor is any inferred by any rule of law." In our judgment, this mooted question, whether the fact that, in addition to indorsing the paper, the person who negotiates it writes above his indorsement a special contract, takes from the act of indorsing the legal character of an indorsement 421 of the instrument, was intended to be put at rest in this state by section 4868 of the Revised Codes. This section provides as follows: "One who writes his name upon a negotiable instrument, otherwise than as a maker or acceptor, and delivers it with his name thereon to another

AM, ST. REP., VOL. LVII. — 86

person, is called an indorser, and his act is called indorsement.” It will not do to assert that this section was passed to settle the question whether one out of the chain of title who indorses negotiable paper before delivering it to the payee, to give it credit, is liable as indorser or guarantor or as joint maker. Section 4877 of the Revised Codes specifically relates to the subject. It declares that "one who indorses a negotiable instrument before it is delivered to the payee is liable to the payee thereon as an indorser." The only other purpose it could be enacted for, unless we assume it to be a purposeless enactment, was to declare that the act of writing his name upon negotiable paper by the holder thereof, as part of the negotiation thereof to a third person, should be an indorsement, despite the fact that, in connection with the act of indorsement, the indorser has, by special contract, restricted or enlarged his liability as indorser. We think this section is limited to the indorsement by the holder of the paper as part of the act of negotiation thereof. When these facts exist, the mere writing of a special contract above his name will not affect the character of his act as an indorsement. It is an indorsement, nevertheless. We are of opinion that the plaintiff was entitled to protection as a bona fide purchaser of negotiable paper, and that, therefore, it was error for the court to permit the defendant to prove a defense good as against the maker. For this error, the judgment is reversed, and a new trial is or dered.

All concur.

PAYMENT-DEBTOR AND CREDITOR.-Payment may be made in any mode which the parties agree shall be treated as the equiv alent of a money payment: Note to State Bank v. Byrne, 37 Am. St. Rep. 335. A person accepting a note in satisfaction of his debt is paid by his own agreement: Hutchins v. Olcutt, 4 Vt. 549; 24 Am. Dec. 634.

NEGOTIABLE INSTRUMENTS-FORM OF INDORSEMENT.An indorsement in the form of an assignment will vest the title to a note in the indorsee: Rowe v. Haines, 15 Ind. 445; 77 Am. Dec. 101. Compare Adams v. Blethen, 66 Me. 19; 22 Am. Rep. 547. A writing on the back of a promissory note, designed for the purpose of transferring title, does not destroy the negotiability of the instrument, unless words apparently intended for that purpose are used: Merrill ▼. Hurley, 6 S. Dak. 592; 55 Am. St. Rep. 859.

NEGOTIABLE INSTRUMENTS-INDORSEMENT WITH ENLARGED LIABILITY.-The written words, "demand, notice, and protest waived, and payment guaranteed," signed by the payee on the back of a negotiable note, constitute an indorsement with an enlarged liability: Buck v. Davenport Sav. Bank, 29 Neb. 407; 26 Am. St. Rep. 392, and note.

NEGOTIABLE INSTRUMENTS-INDORSEMENT WITH CONTRACT OF GUARANTY.-The legal title to a negotiable note may be transferred by guaranty as well as indorsement, and when trans.

ferred by guaranty, it remains negotiable: Crosby v. Roub, 16 Wis. 616; 84 Am. Dec. 720, and note. An indorsement by a payee in the form of a guaranty transfers the title in a note to the holder as an Indorsee: Herring v. Woodhull, 29 Ill. 92; 81 Am. Dec. 296; Myrick v. Hasey, 27 Me. 9; 46 Am. Dec. 583.

NEGOTIABLE INSTRUMENTS-NOTE TAKEN FOR ANTECEDENT DEBT-BONA FIDE PURCHASER-EQUITIES.-One who takes a promissory note before maturity, in good faith, in payment of, or as security for, an antecedent debt, holds it for a valuable consideration and free from equities: Mix v. National Bank, 91 Ill. 20; 33 Am. Rep. 44, and note, showing the conflict of authority.

NORTHWESTERN CORDAGE COMPANY V. RICE.

[5 NORTH DAKOTA, 482.]

SALES BY DESCRIPTION-IMPLIED WARRANTY.-A sale of goods by particular description imports a warranty that the goods are of that description. Hence, if a buyer orders "pure Manilla twine," and the order is filled by sending Manilla twine, there is an Implied warranty that the twine delivered is "pure Manilla twine." SALES BY DESCRIPTION-ACCEPTANCE WITH KNOWL EDGE OF DEFECT.- A purchaser's acceptance of goods bought by description, even with a knowledge that they do not correspond with the warranty implied, does not, as a matter of law, bar his right to rely upon the warranty, because the purchaser does not owe the duty of careful inspection to one who has warranted an article.

SALES BY DESCRIPTION-BREACH OF WARRANTYWAIVER-QUESTIONS FOR JURY.-In cases of sales by a particular description, where goods not corresponding to the implied warranty have been accepted, it should be left to the jury to determine whether there is a breach of warranty, whether the purchaser relies on the warranty, and whether he has waived his right to take advantage of its breach.

SALES BY DESCRIPTION-BREACH OF WARRANTYREMEDY OF BUYER.- If goods sold by description do not correspond with the warranty, the vendee may either reject them, or receive them and rely upon the warranty; and, if there has been no waiver of the right, he may bring an action against the vendor to recover the damages for a breach of the warranty, or set up a counterclaim for such damages in an action brought by the vendor for the purchase price of the goods.

SALES BY DESCRIPTION-EFFECT OF GIVING NOTES FOR PURCHASE PRICE AFTER KNOWLEDGE OF DEFECT.The fact that a purchaser, who has bought goods by description, gives his renewal notes for the purchase price, after knowledge that the goods do not correspond with the warranty, does not prejudice his rights, especially where he expressly asserts his right to rely upon his claim for damages, and where the notes are given with the understanding that such claim will be recognized by the seller. In other words, the mere giving of renewal notes would not, of itself, extinguish his cause of action, if it once existed.

Action by the Northwestern Cordage Company against D. E. Rice. There was a judgment for the plaintiff, and the defendant appealed.

McCumber & Bogart, for the appellant.

Curtiss Sweigle and Morphy, Ewing, Gilbert & Ewing, for the respondent.

483 CORLISS, J. Defendant ordered of the plaintiff seven thousand pounds of pure Manilla twine. Plaintiff, acting on this order, shipped to defendant a lot of twine, which the evidence tends to prove was not pure Manilla twine, but an inferior article, worth much less in the market. Defendant having been sued upon the notes given for the purchase price of this twine, he interposed as a counterclaim an alleged cause of action founded upon breach of warranty. On the trial the district judge directed a verdict in favor of the plaintiff. Defendant appeals.

434 At the outset, we are required to determine whether, in fact, there was a warranty. It is true that the plaintiff did not, in terms, warrant that the twine sold by it to defendant was pure Manilla twine. Indeed, it made no representations whatever in written instrument, or by oral statement. But, when it accepted from defendant an order for pure Manilla twine, it, in contemplation of law, agreed to sell defendant an article answering to that description. That a sale of an article by a particular description constitutes a warranty that the article answers to that description is well settled: Benjamin on Sales, 619-622, and cases cited; Brigg v. Hilton, 99 N. Y. 517; 52 Am. Rep. 63; Dounee v. Dow, 64 N. Y. 411; Wolcott v. Mount, 36 N. J. L. 262; 13 Am. Rep. 438; Fairbank Canning Co. v. Metzger, 118 N. Y. 260; 16 Am. St. Rep. 753; White v. Miller, 71 N. Y. 118; 27 Am. Rep. 13; Lewis v. Rountree, 78 N. C. 323; Hastings v. Lovering, 2 Pick. 214; 13 Am. Dec. 420; Forcheimer v. Stewart, 65 Iowa, 593; 54 Am. Rep. 30; 28 Am. & Eng. Ency. of Law, 776: Gould v. Stein, 149 Mass. 570; 14 Am. St. Rep. 455; Love v. Miller, 104 N. C. 582; Morse v. Moore, 83 Me. 473; 23 Am. St. Rep. 783. Said the court in Gould v. Stein, 149 Mass. 570, 14 Am. St. Rep. 455: "The general rule is familiar and admitted, that a sale of goods by particular description imports a warranty that the goods are of that description."

We cannot say, under the facts of this case, that the defendant, as a matter of law, has waived his right to rely upon the warranty. The twine delivered was Manilla twine, but it was not pure Manilla. It is probable that a special examination of it before acceptance would have resulted in the discovery that it was not as warranted. But the case is not one of the failure of the vendor to deliver any article of the character of that ordered. It was not the purchase of twine, followed by the delivery of some other article.