It is alleged by the complaint, and admitted by the demurrer, that, on or about July 11, 1901, the plaintiff deposited with defendant the sum of $500, and received therefor the following certificate or receipt:
“ The New York Security and Trust Company, New York, July ,11,. 1901, has received from Caroline Zander the sum of five hundred dollars of current funds, upon which the said company agrees to allow interest at the annual rate of three per cent, from this- date, and on five days’ notice will repay, in current funds, the like amount with interest, to the said Caroline Zander or her assigns) on return of this certificate, which is assignable only on the books of the Company.” Then followed provisions- as to-the reduction or discontinuance of interest not material here.
Plaintiff always remained the owner of the certificate, has never *99assigned it or any part thereof, or in any way indorsed or transferred it or any interest therein. Before August 9, 1901, she lost or inadvertently destroyed the certificate, and, though she has diligently searched, she has heen unable to find it, and, on August 9, 1901, she notified defendant of the loss of the certificate. She has duly demanded of defendant the issue of a new certificate, or the payment of the amount of the deposit. The demurrer is stated to be interposed merely for the purpose of enabling the defendant to insist that the plaintiff shall be required to give the security specified in section 1917, Code of Civil Procedure. That section refers to lost negotiable paper, and the question which presents itself is, therefore, whether or not the certificate of deposit given by defendant is negotiable. Section 20 of chapter 612, Laws of 1897, known as the Negotiable Instruments Law, declares that an instrument, to be negotiable, “must be payable to order or to bearer,” and, in this respect, is merely declaratory of the law of negotiable paper as it existed before the passage of the statute. The papers which were before the court in the cases principally relied upon by defendant conformed to the foregoing definition, and in each case the decision turned upon the fact that the lost receipts were payable to “ order,” which circumstance was held to render them negotiable instruments, and to require that indemnity be given before judgment upon them could be rendered. Frank v. Wessels, 64 N. Y. 155; Read v. Marine Bank, 136 id. 454. The receipt or certificate in the present case is not negotiable. The money represented by it is payable not “ to order or bearer,” but to the plaintiff “or her assigns.” It is, therefore, what is known to the law as a nonnegotiable instrument. In an action upon a lost or destroyed instrument of this description, it is not necessary that the plaintiff should give or tender indemnity. Wright v. Wright, 54 N. Y. 437; Mills v. Albany Exchange Savings Bank, 28 Misc. Rep. 251. The distinction between actions on negotiable and nonnegotiable instruments, and the reason for the different rules respecting the necessity for indemnity in such actions are too obvious, and too clearly stated in the authorities cited, to require restatement here. The demurrer admits that the plaintiff never parted with or assigned the certificate, and that it has been lost or destroyed. Even if the plaintiff had not lost or destroyed the certificate, and has assigned it, the defendant would assume no risk in paying her-the amount represented thereby. Sec*100tion 1909 of the Code of Civil Procedure provides that, except in the case of a negotiable instrument, the transfer of a claim or demand passes an instrument which the transferee may enforce by an action or special proceeding, or interpose as a defense or counterclaim, in his own name, as the transferor might have done, “ subject to any defense or counterclaim, existing against the transferor, before notice of the transfer.” Payment to the plaintiff would be a complete defense to any claim or action by her upon the certificate of deposit, and equally be a defense of any action or claim by a transferee from her, if made before notice of the transfer, and it does not appear and is not suggested that defendant has received any notice of a transfer by her.
The demurrer must be overruled, with costs and an extra allowance of twenty-five dollars, with leave to the defendant to withdraw the demurrer and answer within twenty days upon payment of costs.
Demurrer overruled, with costs and extra allowance, with leave to withdraw demurrer and answer within twenty days upon payment of costs.