The First National Bank of Binghamton, Respondent, v. Ervin D. Baker and Others, Defendants, Impleaded with E. I. DuPont de Nemours Powder Company, Appellant

The First National Bank of Binghamton, Respondent, v. Ervin D. Baker and Others, Defendants, Impleaded with E. I. DuPont de Nemours Powder Company, Appellant. Third Department, July 1, 1914. Bills and notes — mortgage as security for indorsement not enforcible until indorser is charged with liability — presentation of note for payment. Where the maker of a note executes a mortgage to an indorser to secure him on account of said indorsement, and he has never been charged with liability thereon, the mortgage is not enforcible by the indorser or by an assignee. The fact that the indorser was secured by the mortgage did not dispense with the necessity of presenting the note for payment and notice of nonpayment. Appeal by the defendant, E. I. DuPont de Nemours Powder Company, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Broome on the 14th day of February, 1914, overruling its demurrer to the complaint. T. B. & L. M. Merchant, for the appellant. Stewart & Kelley [Charles R. Stewart and Raymond H. Moody of counsel], for the respondent. [MAJORITY — Kellogg, J.:] Kellogg, J.: The action was brought to foreclose a mortgage executed by the defendants Baker to one Bayless. Bayless, for the accommodation of the Bakers, November 27,1912, indorsed their note payable to the plaintiff bank for $2,000, two months after date, and the mortgage was given by them to secure him on account of said indorsement. They owed no indebtedness to him and none could arise from them to him unless he paid the note or was charged with liability thereon. The obligation of an indorser is that if the note is duly presented for payment and notice of non-payment duly given to him, he will pay the same. It does not appear that the indorser was ever charged with liability. The fact that Bayless was secured for his indorsement did not dispense with the necessity of presenting the note for payment and notice of non-payment. (Seacord v. Miller, 13 N. Y. 55.) The particular terms of the. bond and mortgage are not material, as it is conceded that their only force or effect was to secure the indorser on account of his having assumed that position upon the note. The note was renewed from time to time, the last renewal being due July 27,1913. The mortgage was assigned to the bank, but at what time, whether before or after the last renewal note became due, does not .appear. It is manifest if Bayless had continued to own the mortgage, and the note became due, and he was not charged with liability thereon, that he could not have maintained an action to foreclose the mortgage. The interlocutory judgment should be reversed, with costs to the appellant in both courts, with the usual leave to the plaintiff, upon the' payment of such costs, to amend its complaint. All concurred; Lyon, J., not sitting. Interlocutory judgment reversed, with costs to appellant in both courts, with the usual leave to the plaintiff, upon payment of such costs, to amend the complaint.