Case Name: Sarah Strasburger, Respondent, v. Myer Strasburger & Company, Inc., and Samuel M. Strasburger, Defendants, Impleaded with Patrick J. Hangley, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1915-04-09
Citations: 167 A.D. 198
Docket Number: 
Parties: Sarah Strasburger, Respondent, v. Myer Strasburger & Company, Inc., and Samuel M. Strasburger, Defendants, Impleaded with Patrick J. Hangley, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 167
Pages: 198–202

Head Matter:
Sarah Strasburger, Respondent, v. Myer Strasburger & Company, Inc., and Samuel M. Strasburger, Defendants, Impleaded with Patrick J. Hangley, Appellant.
First Department,
April 9, 1915.
Bills and notes — liability of prior indorser—when presumption arising from order in which names of indorsers appear overcome so as to raise question of fact as to intention.
The president, secretary and treasurer, and vice-president of a corporation, owning all of its stock, in order to procure the discount of a note executed by it, and to protect their financial interests, indorsed it, individually, in the order named, following their official indorsements. The note was then discounted by a bank and the proceeds used in the business of the corporation. The corporation being unable to pay the note in full, the vice-president, who was the last indorser, paid the same and brought an action against the corporation and prior indorsers. There was no evidence of any express agreement between the parties with respect to the indorsements.
Held, that, under such circumstances, the presumption arising from the oider in which the names of the indorsers appeared was sufficiently overcome to raise a question of fact as to whether it was not the intention of the parties to become jointly liable as sureties for the corporation, and not liable to one another according to the order of then respective indorsements, and that it was error to refuse the request of the secretary and treasurer to present the question to the jury.
The plaintiff is in any event entitled to contribution from the secretary and treasurer to the extent of one-thud of the amount she was obliged to pay, together with interest from the date of payment.
Ingraham, P. J., dissented, with opinion.
Appeal by the defendant, Patrick J. Hangley, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 29th day of October, 1914, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk’s office on the same day denying appellant’s motion for a new trial made upon the minutes.
Abraham Benedict [Charles S. Guggenheimer with him on the brief], for the appellant.
Edwin M. Otterbourg [Charles A. Houston with him on the brief], for the respondent.

Opinion:
Laughlin, J.:
The recovery was upon a promissory note on the theory that the appellant was liable to the plaintiff as a prior indorser.
Myer Strasburger, deceased, was engaged in business in the borough of Manhattan, New York, as an insurance broker until his death on the 2d day of August, 1911. The appellant had been associated with him in that business. On the 5th day of November, 1911, a corporation was organized by the plaintiff, who was the widow of the decedent, and his son Samuel M. Strasburger, and the appellant under the name of Myer Strasburger & Co., Inc., with a capital of $5,000, consisting of fifty shares, for the purpose of continuing the insurance business theretofore conducted by the decedent. The plaintiff took thirty shares of the capital stock and was elected vice-president. The appellant took sixteen and two-thirds shares and was elected secretary and treasurer; and Samuel M. Strasburger took three and one-third shares, and was elected president. The plaintiff's son and the appellant conducted the business. In the summer of 1913 the corporation was in need of funds, and an effort was made to obtain a loan from the Columbia Bank. Evidence was given in behalf of the appellant tending to show that the appellant and Samuel M. Strasburger caused a note for $2,500 to be made in behalf of the corporation, under date of June 18, 1913, to the order of said bank payable in four months, and it was signed in the name of the corporation by Samuel M. Strasburger as president and by the appellant as treasurer, and they indorsed it as president and treasurer respectively, and presented it to the bank for discount; that the bank refused to discount it without their individual indorsements and the indorsement also of the plaintiff; that thereafter they indorsed it individually following the indorsements already upon it by them in their official capacity, Samuel M. Strasburger signing first and the appellant next, and then caused it to be presented to the plaintiff who indorsed it after the name of the appellant. There is no evidence of any express agreement between the plaintiff and her son and the appellant or between her and the appellant with respect to her indorsement, or with respect to whether any information was communicated to her other than the' presentation of the note for indorsement. The note was then presented to and discounted by the bank, and the proceeds were used in the business of the corporation as contemplated. The corporation was unable to pay the note in full at maturity, and the plaintiff paid the balance and received the note, and thereupon brought this action.
The common interest of the plaintiff and her son and the appellant, as owners in separate shares of the entire capital stock of the corporation, doubtless impelled them thus to become accommodation indorsers, with a view to protecting their financial interests; and in such circumstances the presumption arising from the order in which the names of the indorsers appear, if not overcome as matter of law, is sufficiently overcome, at least, to raise a question of fact as to whether it was not the intention of the parties to become jointly liable as sureties for the corporation and not liable to one another according to the order of their respective indorsements. (See Easterly v. Barber, 66 N. Y. 433; George v. Bacon, 138 App. Div. 208.) The court refused appellant's request to go to the jury, which, we think, should have been granted. The plaintiff, however, would in any event be entitled to contribution from the appellant to the extent of one-third of the amount she was obliged to pay, together with interest thereon from the date of payment. (See George v. Bacon, supra.) She paid $2,236.03 on the 30th day of October, 1913. If she wishes to stipulate to reduce the recovery to the amount to which she is clearly entitled as matter of law, there is no occasion for a new trial.
It follows that the judgment and order should be reversed and a new trial granted, with costs to appellant to abide the event, unless the plaintiff stipulates to reduce the recovery to $789.81, in which event the judgment is so modified and affirmed, without costs.
McLaughlin, Clarke and Scott, JJ., concurred; Ingraham, P. J., dissented.