Case ID: ad_156/html/0318-01.html
Source: Caselaw Access Project
Author: {"author": "Stapleton, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Yonkers National Bank, Respondent, v. Edward J. Mitchell, Appellant, Impleaded with William J. Shaw and Thomas Mitchell.
    Second Department,
    April 11, 1913.
    Bills and notes—Negotiable Instruments Law, section 380—liability of indorser of note payable to maker.
    A person who places his name on the back of a promissory note made by the maker, to the order of himself, before indorsement by the maker, cannot escape liability as an indorser under section 320 of the Negotiable Instruments Law.
    Appeal by the defendant, Edward J. Mitchell, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Westchester on the 11th day of November, 1912, upon the verdict of a jury rendered by direction of the court after a trial at the Westchester Trial Term.
    
      John J. Finn, for the appellant.
    
      Thomas M. Smith [Henry Martyn Baird, Jr., with him on the brief], for the respondent.
   Stapleton, J.:

The defendant, Edward. J. Mitchell, appeals from a judgment recovered against him in an action brought to recover the amount due and unpaid on an instrument which reads as follows:

“$4,000. Yonkers, N. Y., Feby. 1, 1912.
“ Three months after date, I promise to pay to the order of myself Four Thousand 00/100 Dollars at the Yonkers National Bank. Value received with interest. ■
“No. 1920. Due May 7th, 1912.
“ WM. J. SHAW.”

Upon the back of the note were the following indorsements in the following order:

Thomas. Mitchell.
Edward J. Mitchell.
’ Wm. J. Shaw.”

The defendant, Edward J. Mitchell, admitted the establish- • ment of the facts essential to recovery except that he was an indorser of this note. He based his contention that he was not an indorser upon the circumstance that when he signed his name on the back of the note the maker, who was also the payee, had not indorsed it. He contends that section 320 of chapter 43 of the Laws of 1909 introduced into the law of negotiable instruments a new feature, by which a person'who places his name on the back of an instrument in the form of the one in suit, before the maker-payee, may escape liability as an indorser.

Section 320 of chapter 43 of the Laws of 1909, being the Negotiable Instruments Law (Consol. Laws, chap. 38), reads as follows: “ Promissory note defined.—A negotiable promissory note within the meaning of this chapter is an unconditional promise in writing made by one person to another signed by the maker engaging to pay on demand or at a fixed or determinable future time, a' sum certain in money to order or to bearer. Where a note is drawn to the maker’s own order, it is not complete until indorsed by him.”

The suggestion of the defendant is novel and interesting, hut does not survive a consideration of the principles of the law governing the liabilities of .an indorser. The section relied upon is simply declaratory of the common law. (Plets v. Johnson, 3 Hill, 112. See Irving National Bank v. Alley, 79 N. Y. 536.)

The nature of the obligation assumed by a person indorsing as did the defendant is succinctly stated by Mr. Daniel: “Where a note is payable to the maker’s own order, it can have no validity until it is indorsed by him, and in such a case the party signing his name on the note while it is unindorsed by the payee is presumed to contemplate that the payee is to sign before him, and that when the note takes effect he will himself appear as second indorser.” (Daniel Neg. Inst. [4th ed.] § 716. See, also, Neg. Inst. Law [Consol. Laws, chap. 38; Laws of 1909, chap. 43], §§ 33, 35, 113, 114, 116; Haddock, Blanchard & Co. v. Haddock, 192 N. Y. 499.)

The judgment should be affirmed, with costs.

Burr, Thomas, Carr and Rich, JJ., concurred.

Judgment affirmed, with costs.