he was not specially named (a). And every person having possession of a bill or note has, notwithstanding any fraud on his part, either in acquiring or transferring it, full authority to transfer such bill, and such transfer will be valid where the party received the bill bona fide and for value (b). When a bill or note has been intrusted to an agent for a particular purpose the property in the bill would not pass to the agent, and he could not give a valid right to any person cognisant with the fact of his limited authority (c). Where, however, the indorsee was ignorant of the circumstances, and took the bill bond fide, either absolutely or as a pledge, the transfer would be operative (d). So where bills are indorsed to a banker to the customer's account, subject to the lien of his banker for his cash balances, the banker has no right to negotiate such bills unless the balance of the account is in his favour (e). Transfer of bill held by a feme sole in case of mar riage. When a bill or note is made payable or indorsed to a feme sole, if she afterwards marries, the right to transfer vests in her husband, and he alone may effect a valid transfer (f). If, however, the bill is made payable or indorsed to a married woman it is better that she should indorse it also, though the indorsement of the husband might be sufficient to pass the title (g). On the death of the holder, the right to transfer a bill or note In case of vests in the executor or administrator; but to avoid personal responsibility they must indorse it in their capacity as executors or administrators (h). A bill or note made payable, or indorsed to several persons not in partnership, must be indorsed by all of them collectively; but if they are partners in trade, the transfer of one would be the transfer of all (i). The transfer of a bill or note by a bankrupt, (a) Jungbluth v. Way, 1 H. & N. 71. (b) Marston v. Allen, 8 M. & W. 504. (c) Lloyd v. Howard, 15 Q. B. 995; Buchanan v. Findlay, 9 B. & C. 738; Uther v. Rich, 10 A. & E. 784. (d) Raphael v. The Bank of England, 17 C. B. 161; De la Chaumette v. The Bank of England, 2 B & Ad. 385. (c) Ex parte Barkworth in re Harrison, 2 De Gex & Jones, 194; Thompson v. Giles, 2 B. & C. 422 ; Collins v. Martin, 1 B. & P. 648; Treuttel v. Barandon, 8 Taunt. 100; Fairclough v. Pavia, 9 Ex. 690. (f) Connor v. Martin, 1 Stra. 516; Miles v. Williams, 10 Mod. 245; Darwin v. Prince, 6 Week. Rep. 171. (g) Barlow v. Bishop, 1 East, 432; Mason v. Morgan, 2 Ad. & E. 30. (h) King v. Thom, 1 T. R. 487; Rawlinson v. Stone, 3 Wils. 1; Prestwick v. Marshall, 7 Bing. 565; Cotes v. Davis, 1 Camp. 485. (2) Carwick v. Vickery, Doug. 653; Jones v. Radford, 1 Camp. 83; Beeman v. Duck, 11 M. & W. 251. death. Transfer of of several persons not bills in favour partners. Transfer by an insolvent. Rights of indorsee. Rights of indorsee against acceptor, drawer, and indorsers. Liability of indorser. even after a secret act of bankruptcy, would convey a valid title where the transferee took it bond fide and for value (a); but the transfer would be invalid if made by way of fraudulent preference to any creditor (b). So any delivery or payment of bills or notes by an insolvent to a creditor within three months before the insolvent's imprisonment, or before his filing a petition for protection, would be void (c). By the indorsement the holder acquires an insurable interest in the bill or note (d); but he has no lien on the fund at the hands of the drawee to cover the bill or note (e). On the bankruptcy, however, of the drawer and acceptor, the arrangement of property between the two estates may indirectly render such an equity available (f). So where there is an agreement that certain specific property shall be held as security for, or appropriated to, the payment of the bill or note, the indorsee would have a right to such property (g). The indorsee may sue the acceptor, the drawer, and indorsers separately and at the same time (h). When, however, the indorsee has given no consideration for the bill or note, or where he received it for a particular purpose, or he knew of any circumstance affecting his right to enforce payment, he could not maintain an action on the bill or note against the acceptor (i). So where the indorsee received the bill or note from a bill broker, with the knowledge or reasonable ground of suspicion that he had no right to pledge or indorse such bills, he could not hold it against the right owner, unless by local usage such broker has acquired the right to pledge or dispose of such property (k). The indorser engages that the bill or note shall be duly paid (a) 12 & 13 Vict. c. 106, s. 133. (b) Cumming v. Baily, 6 Bing. 363; (c) Herbert v. Wilcox, 6 Bing. 203; (d) Tasker v. Scott, 6 Taunt. 234. (f) Ex parte Waring, 2 Rose, 182. (g) Ex parte Hobhouse, 3 Mont. & Ayrt. 269; Cazenove v. Prevost, 5 B. & Ald. 70. (h) Edward v. Jones, 2 M. & W. 414. (i) Hatch v. Searles, 24 L. J. Ch. 22; Delauney v. Mitchell, 1 Stark. 439; Evans v. Kymer, 1 B. & Ad. 528; Treuttel v. Barandon, 1 Moore, 543; Bell v. Ingestre, 12 Q. B. 317. (k) Haynes v. Foster, 2 C. & M. 237; Foster v. Pearson, 1 C. M. & R. 849. at maturity, and that, if it is not so paid, upon due notice of dishonour, he will pay the amount (a). Every indorsement is a new bill; and so long as a bill is in circulation, and such indorsements are made, all the indorsers and every one of them are affected with the same liability of the original drawer (b). In a promissory note, however, where the maker stands in the capacity of an acceptor, liable in the first instance, the indorser does not stand in the relation of maker relatively to his indorsee, but is only liable in default of the maker (c). without re course. The indorser may free himself from any responsibility by the Indorsement indorsement by annexing to it the words "without recourse,' or other expressions of a similar import; and the indorsee of such a bill or note taking it under such an agreement could not sue the indorser (d). An indorsement admits every prior indorsement, and the indorser cannot deny the indorsement of the payee to him (e). transfer with When a bill is transferred without indorsement, the transferor Liability on incurs no liability on the bill or note, either towards the person out indorseto whom he delivers it or to any other (f). But if he is not ment. subject to the obligations he is not entitled to the advantages of such a transfer. Thus, if he delivers it without his indorsement upon any other consideration, antecedent or concomitant, the nature of the transaction and all circumstances regarding the bill must be inquired into, in order to ascertain whether he is subject to any responsibility. If the bill be delivered and received as an absolute discharge he will not be liable, if otherwise he may be; but the mere fact of receiving such a bill does not show that it was received in discharge (g). a transfer. In any case the transfer of a bill or note without indorsement Effect of such would be held to guarantee his title to the instrument and the validity of the signatures. If the holder of the bill knew it to be bad, or that the signatures were not genuine when he trans (a) Gibbs v. Fremont, 9 Exch. 25; Macgregor v. Rhodes, 25 L. J. Q. B. 320. (b) Plimley v. Westley, 2 Bing. N. C. 249; Heylyn v. Adamson, 2 Burr. 669; Ballingalls v. Gloster, 3 East, 481; Penny v. Jones, 1 C. M. & R. 441. (c) Gwinnell v. Herbert, 5 Ad. & E. 436. (d) Pike v. Street, 1 M. & M. 226. (f) Swinyard v. Bowes, 5 M. & S. (g) Ibid.; Bishop v. Rowe, 3 M. & S. 362. Bill trans ferred for an. does not destroy the liability on the contract. ferred it, the consideration would entirely fail, and he would have to refund the money (a). When bills or notes are delivered for an antecedent debt, or tecedent debt for the payment of goods purchased at the time, unless the transferor expressly exonerates himself from all further liability, he may be sued for the antecedent debt, or for the consideration in default of payment (b). Where, however, the transfer of such bills or notes is intended to operate as a sale, or where the same are given in exchange for other bills or notes, or where there was an express agreement that the transferee should run all risks, then no action could be maintained against the assignor in default of payment (c). Effect of regu. lar and irregular indorsements. FOREIGN LAWS. France. The property of a bill of exchange is transferred by means of an indorsement. The indorsement must be dated, must express the value given, and state the name of the party to whose order the bill has passed. An indorsement wanting in any of the requirements of the preceding article would not affect the transfer, but act as a simple procuration. An indorsement including all the conditions of the code is called regular, one which does not include all of them is called irregular. The indorsement is irregular if the indorser has put no more than his name on the back of the bill. When the indorsement is irregular, the bearer cannot fill it up with what is wanting. As an irregular indorsement has only the effect of a simple procuration, the creditors of the indorser can at all times arrest the amount of the bill in the hands of the drawee. The drawee himself, when he is creditor of the indorser, can set his own claims against those of the bearer. The indorser may, so long as the bill has not been paid, and the bearer has not transferred it to another person by a regular indorsement, recall the procuration, and hinder the bearer from receiving the payment. Nevertheless, if the bearer proves that he has given to the indorser the value, the indorser can (a) Fenn v. Harrison, 3 T. R. 359; Young v. Cole, 3 Bing. N. C. 724. (b) Sayer v. Wagstaff, 5 Beav. 415; Owenson v. Morse, 7 T. R. 65; Timmins v. Gibbins, 18 Q. B. 722; Tur ner v. Stone, 1 D. & L. 759; Young v. Cole, 3 Bing N. C. 724. (c) Hornblower v. Proud, 2 B. & Ald. 327; Robson v. Oliver, 10 Q. B. 704; Fydell v. Clark, 1 Esp. 447. not take advantage of the irregularity of the indorsement, and as against him the bearer is held to be a regular proprietor of the bill. The bearer stands as agent towards third parties, and in that capacity he is responsible for his neglect to the indorsers. The holder of a bill indorsed with an irregular indorsement has the right to demand the acceptance from the drawee, and even receive payment and give a valid acquittance. The irregular indorsee has the right to pass the bill with a regular indorsement, and is responsible on the bill in the same manner as a regular indorsee. The indorsement cannot be antedated (a). United States.-A valid transfer may be made by the payee or his agent, and the indorsement is an implied contract that the indorser has a good title, and that the antecedent names are genuine, that the bill or note shall be duly honoured or paid, and if not, that he will on due protest and notice take it up. In the case of a bill made or indorsed to a feme sole, who afterwards marries, the right to indorse it belongs to the husband. So the assignee of an insolvent payee, or the executor or administrator of a deceased payee, is entitled to indorse the paper. If a bill be made payable to a mercantile house consisting of several partners, an indorsement by any one of the partners is deemed the act of the firm. So an infant payee or indorsee may by his indorsement transfer the interest in the bill to any subsequent holder against all the parties on the bill except himself. The bill cannot be indorsed for a part only of its contents, unless the residue has been extinguished, for a personal contract cannot be apportioned, and the acceptor made liable to separate actions by different persons. dorsements. Blank indorsements are common, and they may be filled up Blank inat any time by the holder, even down to the moment of trial, in a suit to be brought by him as indorsee; but no other use can be made of a blank indorsement in filling it up than to point out the person to whom the bill or note is to be paid. A note indorsed in blank is like one payable to bearer, and passes by delivery, and the holder may constitute himself, or any other person, assignee of the bill. Even a bond made payable to bearer passes by delivery, in the same manner as a bank-note (a) French Code of Commerce, §§ 136-139. |