Held v. Moore case brief

An example of an indorsement.

Held v. Moore
Pennsylvania Court of Common Pleas, Lancaster County, January 10, 1964.
49 Lancaster Law Review 111.

FACTS
-P sues to recover $15,000 and 6% interest on a promissory note that was given by Herbert Moore and indorsed by Lois Moore.
-Note was executed and delivered to P on August 12, 1960, and was payable on same day.
-Lois (D) signed her name on the back.
-Complaint states that note was presented to Herbert for payment, but payment was refused.
-Note was then presented to Lois (D) for payment, but she refused.
-D claims that she did execute the note, but denies that she knew the capacity in which she signed the note, nor does she know why she signed the note.
-D denies that the note was presented to her for payment, but she admits that she has not paid the note.

-D's only defense is “I signed the note, but don't know why or in what capacity I signed it.”

PROCEDURAL HISTORY
-Judgment was entered against Herbert for failure to answer P's complaint.
-Lois has filed an answer, and P has filed motion for judgment on the pleadings against her.

ISSUE

-Is the defense: “I signed the note, but don't know why or in what capacity I signed it” a good defense?

HOLDING
-No, the defense that the D asserted is not valid.

RULES
-”In the absence of a qualified indorsement, the indorser engages upon dishonor and any necessary notice of dishonor and protest to pay the instrument according to its tenor at the time of his indorsement” UCC 3-414.

APPLICATION

-The D specifically guaranteed payment of the note at maturity by indorsing the back of the note. Due to this, she is made liable to the P if payment was not made by the maker.
-The court holds that since her signature was voluntarily made (no coercion or fraud), even though she did not know the effect of her signature on the note, she must be held responsible for the legal effect of her act.

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