Blake v Weiden 291 NY 134, 51 NE 2d 667, ALR 1050 (1943)

Facts: In 1939, R. Weiden & Sons, Inc. became a voluntary bankrupt, and Blake was qualified as its trustee. From the books of bankrupt it appeared that there was a balance of $8,103.68 owing to it on open account from defendant who was one of its stockholders and had been an officer. Blake sued the defendant, which was answered by a number of counterclaims. Five of the counterclaims involved five negotiable promissory notes each for $5,000.00. All the notes remained unpaid. These notes were signed by Weidens deceased father. At some time between the fathers death and the bankruptcy, the two brothers put on the bac of the notes a form of indorsement. Defendant attempted in his five counterclaims to use in his purported share of five notes as a set-off against the debt for which the trustee is suing.

Issue: Whether or not the indorsements in the promissory notes would serve as would operate as a negotiation, and thus would serve as a set-off to the debt. Held: No. Ratio: According to Sec. 32 of the Uniform Negotiable Instruments Law, the indorsement mudt br sn indorsement of the entire instrument. An indorsement which purports to transfer to the instrument to two or more indorsees severally, does not operate as a negotiation of the instruments. When there has been a purported indorsement of the whole instrument, in separate parts to two or more transferee, the purported indorsees take legal title to their several shares, or any one or more may sue, provided all the other indorsees are brought in as parties. Sec. 62 of the Uniform Negotiable Instruments Law states that the indorsement does not operate as a negotiation, and suggests that it is entirely inoperative.