Macteague v. James

McAdam, Ch. J.

While the first paragraph of the answer may, under the decisions, "be "bad as a denial oi the allegations of the complaint, the second paragraph of the answer is not open to that objection. That paragraph pleads as an affirmative defense that the note in suit was indorsed by the defendant without consideration, and as an accommodation to the plaintiff, and that such indorsement was made subsequent to that of the plaintiff. The plaintiff is payee of the note, and presumably the first indorser thereon. The new matter pleaded in the answer discloses a complete defense to the note, for, in order to recover thereon, the plaintiff, owing to the peculiar wording of the note, ought to have alleged and was bound to prove, the facts which made the defendant liable as first indorser (See Moore v. Cross, 19 N. Y. 227, and Bacon v. Burnham, 37 Id. 614, and kindred cases).

The answer was not frivolous, and the order awarding judgment thereon must be reversed, with $10 costs and disbursements.

Rehrbas and Hyatt, JJ., concur.

When a promissory note is made by A., payable to the order of B., and C. indorses it, the legal presumption is that B., the payee, is to be the first indorser, and that C. is to have his remedy over against B., in case C. is obliged to pay the note. Hence, B. cannot sue C. upon the note, unless he overcomes the presumption by alleging, and, if denied, proving, that the note was taken by B. upon the understanding that C. should indorse it, and that C. did indorse it with the intention of becoming liable thereon to B. Thus in Moore v. Cross (19 N. Y. 227) the entire transaction was pleaded, and a recovery on such a note was sustained.