UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW Nego

E2024 Professor Dayag

Fay v. Witte
July 11, 1933
Crane, J.

Topic: Kinds of Indorsements; Qualified Indorsement

Doctrine:
The payee’s name being upon the back of the note, he is presumed to be an unqualified indorser, unless there
are words which express a different intention.

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. Such an
indorsement does not impair the negotiable character of the instrument.

Parties:
APPELLANT RESPONDENT
Richard Fay Harry C. Witte

FACTS OF THE CASE

The following promissory note was executed and delivered on the date mentioned:

On February 14, 1931, long before the maturity of the note, Witte indorsed the note to Fay, writing “I hereby
assign all my right and interest in this note to Richard Fay in full”. Fay brought an action against Witte as an
unqualified indorser due to the non-payment of the note. The County Court dismissed Witte’s motion to
dismiss and held Witte liable as an unqualified indorser. On the other hand, the Appellate Division held that
Witte, by the assignment of the note, had rendered himself an indorser without recourse and was not liable as
an unqualified indorser. Indorsment implies two things: 1) transfer of the note; and 2) a promise to pay if a
maker fails to do so. Witte, by having assigned the note transferring title, impliedly excluded the second
condition by the word “assign”.

ISSUE/S & RATIO/S

W/N Witte, upon assignment of the note, rendered himself an indorser without recourse—NO.
• To consider the payee as an indorser, it must be expressed using the words “without recourse” or any
other words of similar import. In this case, no such words were used. The law does not allow
implications.
• We have a clear expression of assignment and transfer. The note and title were transferred to Fay and
we find nothing else. The words “without recourse” or any other words of similar import were not
used. We may imply by the use of “assign”, as did the Appellate Division, that the payee considered
himself no longer liable, but implication is not permitted by the statute. The denial of recourse must
be found in the express words, “without recourse” or other similar import. This indorsement contains
no such words. Witte became an unqualified indorser liable as such non-payment and notice of protest.

RULING
County Court judgment affirmed; Appellate Division judgment reversed.