8/18/2019 Richard Fay v White

1/1

RICHARD FAY, APPELLANT, V. HARRY C. WITTE, RESPONDENT.COURT OF APPEALS OF THE S TATE OF NEW YORK.ARGUED MAY 24, 1933 DECIDED JULY 11, 1933

CRANE, J.

The following promissory note was executed and delivered on the date mentioned!A"#AN$, NE% $&R', Jan. ()th, (*)(.!Novem+er (st, after date %e promise to pay to the order of arry C. %itte, Two Thousand -ive undred

ollars, /01,233.334 at the Central #an5 of Al+any, New $or5, with interest.!6alue received.! ARR$ C. %7TTE, 7NC. !#y ARR$ C. %7TTE,Pres.!&n the (8th day of -e+ruary, (*)(, which was long +efore maturity, the said payee, arry C. %itte, for agood and valua+le consideration, indorsed the note in the following manner!7 here+y assign all my right and interest in this note to Richard -ay in full,! ARR$ C. %7TTE.!

-ay +ecame the holder upon delivery and +rings this action against %itte as an un9ualified indorser, thenote having +een protested for non:payment, and due notice thereof having +een given to the defendant,as ;1( the promise to pay upon default. %e can find no ?ustification in the Negotia+le 7nstruments"aw /Cons. "aws, ch. )@4 for an implied 9ualified indorsement. Either the words, !without recourse,! must+e used, or other words of similar import. The exclusion of lia+ility must +e expressed +y appropriate words, and not implied from the transaction. !A person placing his signature upon an instrument otherwisethan as ma5er, drawer or acceptor is deemed to +e an indorser, unless he clearly indicates +y appropriate words his intention to +e +ound in some other capacity.! /Neg. 7nst. "aw, (().4

The placing of this assignment and his name upon the note constituted %itte an indorser unless the wordsindicate a different intention. The signing on the +ac5 of the note has a different effect than would suchsigning under the same words on a separate paper not attached to the note. This would not +e anindorsement at all. 7t would +e a mere assignment transferring title. 7t is the writing on the +ac5 of theinstrument itself which constitutes the indorsement with the effect given to it +y the Negotia+le 7nstruments"aw. !%here a signature is so placed upon the instrument that it is not clear in what capacity the personma5ing the same intended to sign, he is to +e deemed an indorser.! /Neg. 7nst. "aw, )B, su+d. B.4 Thepayee s name +eing upon the +ac5 of the note, he is presumed to +e an un9ualified indorser, unless thereare words which express a different;1(@1(@ intention. The Negotia+le 7nstruments "aw, section B@, reads!A 9ualified indorsement constitutes the indorser a mere assignor of the title to the instrument. 7t may +e

made +y adding to the indorser s signature the words Dwithout recourse or any words of similar import.uch an indorsement does not impair the negotia+le character of the instrument.!

%e find no words in this indorsement which state expressly that the payee or indorser assigns or transfersthe note, +ut is not to +e held lia+le over in case of default. %e have a clear expression of an assignmentand transfer. This is what the words used mean. The note and title to the note were passed to Richard -ay,the plaintiff. owever, we find nothing else. The words, !without recourse,! are not used, nor any other words of !similar import.! %e mayimply +y the use of the word !assign,! as did the Appellate ivision, thatthe payee considered himself no longer lia+le, +ut implication is not permitted +y the statute.

The denial of recourse to a prior indorser must +e found in the express words, !without recourse,!or words of similar import. This indorsement contains no such words. %itte, the defendant, +ecame anun9ualified indorser lia+le as such upon non:payment and notice of protest. This is the law as stated inmost of the authorities, text+oo5s and treatises. aniel on Negotia+le 7nstruments /6ol. (, B@@:c4 statesthe law as follows ! oes the writing over a signature on express assignment which the law imports fromthe signature per se exclude and negative the idea of conditional lia+ility which the law also imports if suchassignment were not expressed in fullF %e thin5 not. 7t is from the fact that a payee assigns a +ill ornegotia+le note +y indorsement of his name on the +ac5 of it, that the law implies his lia+ility as an indorser.

is relation to the instrument creates the implication, and the circumstance that he sets forth that relation inexpress terms does not change it, for the maxim applies,Expressio ;1(*1(* eorum quae tacitae insuntnihil operatur. id the payee intend merely to pass the title he should use the words Dwithout recourse orsome phrase of e9ual import. is lia+ility is implied without words expressly creating it. To +e negatived, words should +e used which negate the implication.! / ee, also, #igelow on #ills, Notes and Chec5s G)ded.H, 12B, pp. (@8, (@2= The %ritten Aspect of 7ndorsement, )8 $ale "aw Journal, (88, (2(.4

A li5e holding has +een made in the following casesFarnsworth v. Burdick / *8 'ans.