(163 App. Div. 72)

#### FIRST NAT. BANK OF BINGHAMTON v. BAKER et al.

(No. 162-115.)

(Supreme Court, Appellate Division, Third Department.

July 1, 1914.)

1. Bills and Notes (§ 223*)—Liability of Indobser.

The obligation of an indorser is that he will pay the note if it .is duly presented for payment and notice of nonpayment duly given him.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. § 524; Dec. Dig. § 223.*]

2. Bills and. Notes (§ 397*)—Necessity of Demand and Notice of Nonpayment.

That an indorser of a note was given a mortgage to secure him on account of such indorsement did not dispense with the necessity of presenting the note for payment and giving notice of nonpayment.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. §§ 1029-1044; Dec. Dig. § 397.*]

*3733. Mortgages (§ 405*)—Foreclosure oe Mortgage Given as Collateral Security.

A mortgage given to an indorser on a note to secure Mm on account thereof could not he foreclosed until the indorser was charged with liability on the note.

[Ed. Note.—For other cases, see Mortgages, Cent. Dig. § 1168; Dec. Dig. § 405.*]

Appeal from Special Term, Broome County.

Action by the First National Bank of Binghamton against Ervin D. Baker and others. From an interlocutory judgment, overruling its demurrer to the complaint, the defendant E. I. Du Pont de Nemours Powder Company appeals.

Reversed.

Argued before SMITH, P. J., and KELLOGG, HOWARD, and WOODWARD, JJ.

T. B. & L. M. Merchant, of Binghamton, for appellant.

Stewart & Kelly, of Binghamton, for respondent.

*

For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes

*

For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, *&*Rep’r Indexes

JOHN M. KELLOGG, J.

[1,2] The action was brought to foreclose a mortgage executed by the defendants Baker'to one Bayless. Bayless, for the accommodation of the Bakers, November 27, 1912, indorsed their note, payable to the plaintiff bank for $2,000, two months after date, and the mortgage was given by them to secure him on account of said indorsement. They owed no indebtedness to him, and none could arise from them to him unless he paid the note or was charged with liability thereon. The obligation of an indorser is that, if the note is duly presented for payment and notice of nonpayment duly given to him, he will pay the same. It does not appear that the indorser was ever charged with liability. The fact that Bay-less was secured for his indorsement did not dispense with the necessity of presenting the note for payment and notice of nonpayment. Seacord v. Miller, 13 N. Y. 55.

[3] The particular terms of the bond and mortgage are not material, as it is conceded that their only force or effect was to secure the indorser on account of his having assumed that position upon the note. The note was renewed from time to *time;*the last renewal being due July 27, 1913. The mortgage was assigned to the bank, but at what time, whether before or after the last renewal note became due, does not appear.

It is manifest if Bayless had continued to own the mortgage, and the note became due, and he was not charged with liability thereon, that he could not. have maintained an action-to foreclose the mortgage.

The interlocutory judgment should be reversed, with costs to the appellant in both courts, with the usual leave to the plaintiff upon the payment of such costs, to amend its complaint. All concur.