Arnson v. Abrahamson — 30 N.Y. St. Rep. 657

Majority

p. 657

Paula Arnson, App'lt, v. Max Abrahamson and Nathan Storm, Impl’d, Resp’ts.

(New York Common Pleas,

General Term,

Filed April 7, 1890.)

Headnote

1. Bills and notes—Endorsers liable although note a forgery.

The endorser of a note cannot question the signature of the maker or previous endorser or take advantage of the fact that such signatures were forged.

2. Same—Accommodation paper—Bona fide holder.

A third person who takes a note for value is entitled to recover upon it against the endorser notwithstanding he took it with full knowledge that it was accommodation paper.

Appeal from fourth district court.

A. H. Sarasohn, for app’lt,

This was an action brought upon a promissory note against the defendant Gekowsky, the maker, and the defendants Max Abrahamson and Nathan Storm, two endorsers upon the note.

It was insisted as a defence that the note was a forgery ; upon which an issue was framed and tried, and a verdict rendered in favor of the defendants. The endorsers claimed that they were discharged from liability on account of said alleged forgery.

It is a well settled legal principle that an endorser impliedly warrants that the instrument is not forged; and if it is he is liable upon this warranty; he cannot question the signature of the maker, or previous endorser, or take advantage of the fact that the signatures of the maker or previous endorser were forged. Turner v. Keller,

p. 658

66 N. Y., 66 ; Herrick v. Whitney, 15 Johns., 240 ; Shaver v. Ehle, 16 id., 201; Morrison v. Carrie, 4 Duer, 79 .

The acceptor of a bill is presumed to know the signature of the drawer; and if the bill is accepted upon the faith of his endorsement he is liable to a bona fide endorsee or holder for value, even though the bill proves to be a forgery. Nat. Park Bank v. Ninth Nat. Bank, 46 N. Y., 77 ; Bank of Commerce v. Union Bank, 3 N. Y., 230 . See also Coggill v. Amer. Ex. Bank, 1 Comst., 113.

It has been decided that where a note is endorsed for the accommodation of the maker or payee and is negotiated to a third person who pays value for it, the party receiving it, and who pays value, is entitled to recover upon it against such endorser notwithstanding the purchaser took it with full knowledge (that it was accommodation paper. Ross v. Bedell, 5 Duer, 462 ; Grant v. Ellicott, 7 Wend., 227 ; Commercial Bank v. Norton, 1 Hill, 501 .

This case conies within the rule of Fassin v. Hubbard, 55 N Y., 465 , as there was no limitation of the endorsers’ liability upon the contract.

The judgment appealed from should be reversed as to the defendants Max Abrahamson and Nathan Storm; and judgment should be ordered against them in favor of the plaintiff, with costs.

BiscHpFF, J., concurs.