Gaetani v. Goss-Golden West Sheet Metal Profit Sharing Plan

Opinion

LAMBDEN, J.

California statutory and case law preceding our state’s 1963 enactment of the Uniform Commercial Code established that the indorser of a promissory note could avoid liability for any default by the maker by adding the words “without recourse” or words of equivalent effect—what we will call “the equivalency rule.” Specifically, case law held that words assigning all of one’s right, title and interest in the note were equivalent to indorsing it without recourse. (Kern v. Henry (1934) 138 Cal.App. 46, 50-51 [31 P.2d 454]; Mathes v. Bangs (1932) 128 Cal.App. 171, 172-173 [16…