Edison General Electric Co. v. Zebley — 55 N.Y. St. Rep. 62

Majority

p. 62

The Edison General Electric Co., App’lt, v. John F. Zebley, Impl’d, Resp’t.

(Supreme Court, General Term, First Department,

Filed October 19, 1833.)

Headnote

Bills and notes—Indobseb—Pleading.

A complaint alleging the execution and delivery of a promissory note to-plaintiff and that the defendant, for value, indorsed the same before such delivery, without further allegations showing that defendant indorsed lor the purpose of giving the maker credit with the payee or intended to charge himself as joint-maker, guarantor or surety, is insufficient to overcome the presumption that defendant was .the second indorser and hence not liable to the payee on the note.

Appeal from interlocutory judgment sustaining demurrer to-the complaint.

The action was brought against the maker and indorser of six promissory notes to recover the balance due thereon.

The complaint alleged that the defendant, the Eastern Electric-Company, made a certain promissory note in writing, and delivered the same for value to the plaintiff, and that said note was duly indorsed by the defendant Zebley, for value, before said delivery. A copy of the note is set forth in the complaint, and all the other necessary formal averments are included.

The defendant Zebley thereupon demurred to the complaint on the ground that it did not contain the statement of facts sufficient to constitute a cause of action as against him. The demurrer was sustained in the court below, and from its judgment the plaintiff appealed.

Eaton & Lewis (W. Laird Goldsborough, of counsel), for app’lt; Redfield & Redfield (Robert L. Redfield, of counsel), for resp’t.

The indorser, Zebley, demurred to the complaint on the ground that it did not state a cause of action as against him.

After certain formal averments, the complaint alleges (paragraph 4tli) as follows: “ That heretofore and on or about the 8th day of February, 1892, at the city and county and slate of New York, the Eastern Electric Company made and delivered to the plaintiff, for value, a certain promissory note, in writing, which said note was duly indorsed by the defendant, John F. Zebley, for value, before said delivery, in words and figures following, to-wit,” and then follows a copy of the note.

The question on this appeal is, whether or not such an allegation is sufficient to charge the respondent Zebley as an original party to the several notes in suit,-or as privy to the consideration for which they were given by the maker to the payee.

Undoubtedly, the rule is well settled, as stated in Coulter v. Richmond, 59 N. Y., 478 , that “in this state it has been repeatedly held, and is too strongly settled by authority to be disturbed, that a person making such an indorsement is presumed to have intended to become liable as second indorser, and that on the face of the paper, without explanation, he is to be regarded as second

p. 63

indorser, and, of course, not liable upon the note to the payee, who is supposed to be first indorser.

Are the facts in the complaint sufficient to destroy the legal presumption that the indorser wrote his name for the accommodation of the maker, intending to become indorser subsequent to the payee ? We think not, and concur with the court below in sustaining the demurrer.

Great reliance has been placed upon the case of Lynch v. Levy, 11 Hun, 145 , which, it is claimed, is on all fours with the case at bar, as establishing a new rule for determining the sufficiency of the complaint in an action of this character against an indorser. An examination, however, of that case will show that the court -had in mind the rule of law and the legal presumption which has been stated, but held that the allegations in that complaint stated a sufficient cause o'f action, and the learned judge writing the opinion recognizes the settled rule of law in this state, and correctly says: “ There can be no doubt that if in such a case as this there are allegations showing that the indorsement was made to give the maker credit with the pajme, the action can be maintained. ” This is but another way of stating that the legal presumption, that an indorsement upon a promissory note made before that of the payee is a second indorsement, may be overcome by proper allegations showing that the person so indorsing the note intended to charge himself either as joint maker, guarantor or surety. There being an absence of such allegations in the complaint in this case, the demurrer was properly sustained by the court below, and the judgment should be affirmed, with costs.

O’Brien, Eollett and Parker, JJ., concur.