CoCKRlLL, C. J.¶1impiiedW?nra"í tifSrabie "by delivery. When a promissory note is transferable by delivery without endorsement, one who so transfers jncurS; not the obligations of an endorser but, the liability of a vendor.v There is not only an implied warranty that he assigns a good title, and that the paper is what it purports to be, but also that there is no legal defense to the collection growing out of his own connection with its origin. Story on Prom. Notes, secs. 117-8; Chitty on Bills, 246; Challis v. McCrum, 22 Kan., 157, and cases cited. Doubtless good faith and fair dealing demand and have established a broader rule, but that stated satisfies the necessities of the present case. “There can be no doubt,’’ says Chitty, supra, “that if a man assign a bill (by delivery only) for a sufficient consideration, knowing it to be of no value, and the assignee be not aware of the fact, the former would in all cases be compellable to repay the money he had received.” If the law raises such a warranty by implication, it follows that when the assignor by delivery expressly warrants that the paper is good and will be paid by the maker, he is liable if it turns out to be worthless for usury or any other defense of the maker. The fact that the warranty is not in writing but is oral is not material. 1 Daniel’s Neg. Inst., sec. 739 a; Milks v. Rich, 80 N. Y., 269; King v. Summitt, 73 Ind., 312; Malone v. Keener, 44 Pa. St., 107.
¶2wthraTdy — The proof in this case shows that the appellant negotiated the original loan for which the note he sold Mrs. was given, and that he knew all the facts in relation to its validity, but disclosed none to his assignee; that he expressly stipulated with her that the note was good, and that no defense existed against it. When the maker informed the assignee that the note was given upon a usurious consideration, the appellant directed her to bring suit for its collection, again assuring her it was a binding obligation upon the maker. She brought the suit and was defeated on the merits. The authorities cited establish her right to recover the amount paid. She recovered also the costs she was compelled to pay in prosecuting the suit against the maker. That was a legitimate part of her damage. If she was not bound to attempt the collection of the note, she was certainly justified in doing so; and the appellant, by requesting her to prosecute it, became bound by the judgment and liable to her for the costs, upon the principle which governs in breach of covenant of quiet enjoyment of real estate where the covenantor is notified of the pendency of suit and requested to furnish the evidence to sustain the defense. Collier v. Cowger, 52 Ark., 322. The rule governing that class of cases is applied also in this. Delaware Bank v. Jarvis, 20 N. Y., 226; Bell v. Dagg, 60 N. Y., 528; Mosher v. Hotchkiss, 2 Keyes, 589; Coolidge v. Brigham, 5 Met. (Mass.), 68.
¶3The errors complained of by the appellant relate to the prayers for instructions based solely upon facts which constituted the maker’s defense to the note. But those questions were precluded by the judgment which the assignee had prosecuted at the appellant’s request, and the court should have refused all and granted none. Finding no error prejudicial to the appellant, the judgment is affirmed.
