Opinion
April 11, 1913.
John J. Finn, for the appellant.
Thomas M. Smith [ Henry Martyn Baird, Jr., with him on the brief], for the respondent.
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. 7, 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 establishment 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, but 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.