Sand v. Steinberg

Lewis, David C., J. An examination of the papers fails to disclose a copy of the note upon which this action is based. From the data which the court gathered at the time of the argument, I take it that the promissory note was signed as follows: “ Thomas Gerson, borrower; “ Dorothy Gerson, wife of borrower (comaker); “ Michael Sand, comaker (indorser); “ Benjamin Steinberg, comaker (indorser).” The plaintiff, Michael Sand, seeks contribution against the defendant Benjamin Steinberg on the theory that there were only two indorsers and, therefore, is entitled to recoup from Steinberg as a coindorser and cotrustee one-half of the amount which the plaintiff has had to pay by reason of his liability as a comaker-indorser on this paper. It is undisputed that Thomas Gerson was in fact the sole borrower. The other parties, regardless of the designations attached to their respective signatures, signed the note as accommodation parties, before its delivery to the payee (the lender). The note was never in the possession of any of them for any other purpose except to place their signature on it. They received neither value for their indorsement nor proceeds from the discount. As between them [127] selves," they became sureties and, as such, possessed of the right of contribution. There being three in number, they would ordinarily contribute in thirds, and in law that is the limit of liability and recovery. The very nature of the transaction and the wording of the instrument leads to such a conclusion (Easterly v. Barber, 66 N. Y. 433, at pp. 437, 439).