term, and hence that there was a fatal variance between the information and the proffered proof. The evidence having been admitted he makes the same contention here. The instrument in question is called a "Travelers' check", but is, more properly speaking, not of the form or effect of a check but rather of a bank note, and is a negotiable instrument. When issued it was payable "to the order of This being so it was payable to bearer when properly signed at the place indicated by the original holder to whom it was issued (Daniel on Negotiable Instruments, 5th ed., sec. 145). The insertion of the word "bearer" in the blank space in the body of the check was therefore not material to its validity or transfer to another than the original payee; but the writing of the name "A. Thompson" in the lower right hand corner of the face of the instrument was. by its express terms, made essential to its transfer from the original holder to another payee. The Civil Code defines indorsement as follows: "One who writes his name upon a negotiable instrument otherwise than as maker or acceptor and delivers it with his name thereon to another person is called an indorser, and his act is called indorsement." (Civ. Code, sec. 3108.) [4] It is true that the word "indorsement" comes from a Latin compound meaning "on the back"; and it is also true that the sections of the Civil Code immediately following the section above quoted seem to contemplate that an indorsement of a negotiable instrument should be on its back or on a separate paper attached to it; but the supreme court of this state, with section 3108 of the Civil Code expressly in view, has declared that "the indorsement may be made on the face of the note with the same effect as if made on the back". (Shain v. Sullivan, 106 Cal. 208, and cases cited.) [3] This being so, the conclusion would seem to be irresistible that the writing of the name of A. Thompson, the original holder and payee of this instrument, on its face constituted an indorsement within the plain intendment of section 3108 of the Civil Code. It was the signature of the original holder of the instrument expressly required to give effect to its delivery and validity to its transfer to another payee; and hence its forgery, or the uttering, publishing and passing of such instrument as true and genuine, knowing that the said signature of A. Thompson was forged, would constitute the offense charged in the information. There was therefore no variance between the terms of said information and the instrument when proffered and admitted in proof. The judgment and order denying a new trial are affirmed. We concur: KERRIGAN, J. Civil No. 1242. First Appellate District. January 29, 1914. *JOHN F. KUNZ, Plaintiff and Respondent, v. CALIFORNIA TRONA COMPANY (a Corporation), E. J. BOYES and LUCIEN SIMON, Defendants and Appellants; ROBERT PHILLIPS and A. L. AYRES, Defendants and Respondents. JOHN F. KUNZ, Plaintiff and Respondent, V. CALIFORNIA TRONA COMPANY (a Corporation) and E. J. BOYES, Defendants and Appellants; C. E. DOLBEAR, Defendant and Respondent. [1] PROMISSORY NOTE INDEBTEDNESS OF PAYEE TO MAKER IN EXCESS OF NOTE-RECEIPT OF MONEY AS LOAN-SUFFICIENT CONSIDERATION. The fact that at the time of the execution of a promissory note the payee has received and holds money belonging to the maker in an equal or greater amount than that specified in the note, does not make such note without consideration, where the maker is ignorant of the payee's indebtedness and the money is received as a loan and not in payment of any indebtedness between the parties. [2] ID.-EXECUTION OF NOTE-INDEBTEDNESS ON CONTRACT-INDEBTEDNESS UPON OTHER CONTRACTS-SUFFICIENT CONSIDERATION.Where a note is given for an amount due the payee from the maker on a certain contract, this is a sufficient consideration for the note, although the payee may owe the maker at the time more than the face of the note on other contracts. [3] ID.-SET-OFF-BONA FIDE TRANSFEREES OF NEGOTIABLE PAPER -CODE PROVISION-RIGHTS UNAFFECTED.-Section 440 of the Code of Civil Procedure relating to set-offs is not intended to and does not affect the negotiability of commercial paper, or the rights of bona fide transferees of such paper. Appeals from the Superior Court of the City and County of San Francisco-George E. Church, Judge. For Appellants-Perry Evans. For Respondent-Arnold W. Liechti. Plaintiff sued as a transferee in due course on three promissory notes dated respectively December 27, 1910, January 5, and January 11, 1911. The note of January 5th was for the principal sum of $500, and the two others were for $1000 each. All of the notes were executed by the defendant California Trona Company to the order of E. H. Merrill, as payee; but as each was endorsed by different parties three different actions were brought. These were consolidated for trial, and in each case judgment was given for the plaintiff. The maker and those endorsers against whom judgment was rendered have appealed from the several judgments and from orders denying motions for a new trial. In the action involving the note of January 5th, 1911, the appeal was originally taken to the supreme court because of the amount involved. We shall in this opinion consider the appeals in the other two actions; and as the same questions are presented in each case we will, as counsel have, discuss them as though both notes were involved in the one action. The only defense offered by the answer in each case is lack *On rehearing (17 Cal. App. Dec. 34). of consideration for the notes. In this behalf the answer alleges that on or about the date of the making of the note the payee, E. H. Merrill, "had and received on behalf of" the defendant California Trona Co. the sum of $10,000; that he has paid or accounted to it for only $2500; that of this amount $1000 was paid on or about the date of the note in suit, and that the note was given upon the receipt of that amount "under the mistaken assumption of the officers of the said California Trona Co. that the said payment was a loan". In a proposed amended answer, which the trial court did not permit to be filed, the defendants specified somewhat more particularly the circumstances of the alleged "mistaken assumption" by averring that at the time the note was given the defendants did not know Merrill to be at all indebted to the defendant company, and that the note was executed "under the mistaken assumption that the said E. H. Merrill was at the date thereof not indebted to the California Trona Co." The answer also alleged on information and belief that the matters averred in it were known to the plaintiff before the notes were transferred to him, and that there was no consideration for such transfer. There are various assignments of error in the exclusion of evidence, but these with one exception (which is hereinafter mentioned) relate to evidence intended to show that the payee was "at or about" the time of the execution of the notes indebted to the maker of them. The evidence shows that one of the notes at least was executed by the officers of the defendant company under express authority of a resolution of its booard of directors, authorizing them to borrow $1000 of Merrill, and to execute the note of the corporation therefor. It is not questioned that both were corporate acts. The one question presented is, therefore, whether a note executed for money borrowed is without consideration where, at the time, the payee has received and holds money belonging to the maker of the note in an equal or greater amount, without that fact being known to the maker of the note. [1] In the opinion rendered upon the first hearing of this case (a rehearing having been subsequently granted) this question was answered affirmatively, upon the principle that the mere doing of that which one is legally bound to do is not consideration for a new promise. On further consideration, however, we do not regard that principle as determinative of the case presented by this record. Payment by Merrill of money which he owed to the California Trona Company would not be consideration for the execution of a note; but it was not payment of the preexisting indebtedness unless so intended; and it is not claimed in this case that the money which the California Trona Co. received from Merrill as consideration for the notes in question was delivered by him or received by it as payment of any indebtedness between the parties. Indeed the opposite is claimed. The money was loaned by Merrill in consideration of the execution of the notes; and these were executed by the corporation in consideration of such loan. No fraud on the part of Merrill is alleged; and no lack of consideration for the notes would be shown by proof that Merrill was, at the time, indebted to the corporation in even a larger amount on another transaction. [2] Where a note is given for an amount due the payee from the maker on a certain contract, this is a sufficient consideration for the note, although the payee may owe the maker at the time more than the face of the note on other contracts (Knox v. Clifford, 38 Wis. 651.) [3] It may be suggested that a different rule is established by section 440 of the Code of Civil Procedure, in providing that "When cross-demands have existed between persons under such circumstances that, if one had brought an action against the other, a counterclaim could have been set up, the two demands shall be deemed compensated so far as they equal each other, and neither can be deprived of the benefit thereof by the assignment or death of the other". Conceding that some of the evidence offered would have been admissible if a valid defense had been pleaded by the answer, we are of the opinion that the defense pleaded, as already stated, showed no lack of consideration for the notes, and that no claim of set-off was available under the pleadings in this action even if the evidence had been received. The date of accrual of the claimed liability from Merrill to the California Trona Co. is alleged only as "at or about the time" the several notes were executed, and the existence of that liability at the dates of the earlier notes is pleaded only by inference if at all. The evidence offered, so far as it discloses any dates, does not indicate the existence or admission of any liability prior to January 17, 1911, which is the date of the latest of the notes. But apart from these considerations, section 440, Code of Civil Procedure, is not intended to and does not affect the negotiability of commercial paper, or the rights of bona fide transferees of such paper. The plaintiff, being admittedly an indorsee before maturity of a negotiable. instrument, was presumed to be a bona fide holder for value (Civ. Code, sec. 3104; Luning v. Wise, 64 Cal. 410; Giselman v. Starr, 106 Cal. 651; Palmer v. Goodwin, 5 Cal. 458). The answer, it is true, alleged on information and belief that he took with knowledge of the facts which are relied upon as showing want of consideration for the notes, and that the transfer to him was without consideration. But no evidence was offered upon this allegation which was either relevant or worthy of consideration. If want of consideration for the notes had been pleaded and proved, it might be that the burden would have been shifted to plaintiff to prove his status as a bona fide holder for value; but that defense, as we have seen, was not established. The defendants sought to introduce evidence that the attorney in fact of plaintiff, who signed for him certain notices of dishonor of the notes, was the law partner of plaintiff and a nephew of Merrill, the original payee. Defendants' counsel stated that this was "offered as proof of the fact that there was no consideration for the transfer of the notes by Merrill to Kunz". It obviously had no relevancy or probative value on this issue, and was properly excluded. This being the only evidence offered in support of the allegations of the answer which negatived plaintiff's status as a bona fide holder for value, and there being, as we have seen, no pleading or proof of facts showing a want of consideration for the notes themselves, we see no error in the rulings of the trial court. The judgments and orders are affirmed. We concur: RICHARDS, J. LENNON, P. J. KERRIGAN, J. Civil No. 1349. First Appellate District. January 29, 1914. JOHN F. KUNZ, Plaintiff and Respondent, v. CALIFORNIA TRONA COMPANY (a Corporation), E. J. BOYES and LUCIEN SIMON, Defendants and Appellants; ROBERT B. PHILLIPS, Defendant and Respondent. CALIFORNIA TRONA COMPANY (a Corporation), Cross-complainant and Appellant, v. E. H. MERRILL, Cross-defendant and Respondent. [1] PROMISSORY NOTE-ACTION BY TRANSFEREE AGAINST MAKER AND ENDORSERS-Cross-COMPLAINT BRINGING IN OF PAYEE-DETERMINATION OF CONTROVERSY BETWEEN MAKER AND PAYEE.-In an action by the transferee of a promissory note against the maker and endorsers, it is not proper to bring in the payee of the note by crosscomplaint in order to determine a controversy as to money due between the maker and such payee, to which the plaintiff was not a party. [2] ID. PLEADING CROSS-COMPLAINT-BRINGING IN OF NEW PARTIES-RULE. While it is true that new parties may be brought into an action by a cross-complaint when their presence is essential or proper to a complete determination of the controversy, it is equally well settled that a cross-complaint cannot be used to bring in new parties for the trial of issues unrelated to the controversy between the original parties. Appeal from the Superior Court of the City and County of San Francisco-George E. Church, Judge. For Appellants-Perry Evans. For Respondent-Arnold W. Liechti. The appeal in this case is from a judgment in favor of plaintiff John F. Kunz and cross-defendant E. H. Merrill, and against the California Trona Company, both as defendant and crosscomplainant, and against E. J. Boyes and Lucien Simon as defendants, and is also from the order denying the motion for a new trial made by said defendants and California Trona Company. The action was brought to recover the amount of a promissory note dated January 5th, 1911, for the sum of $500, and is one of the three promissory notes executed by said California Trona Company to the order of E. H. Merrill which are mentioned in the opinion filed in the case of similar title to the present one, but numbered 1242, this day decided. Because of the amount of |