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name upon the bill previously in fact, and who is also previous in order. By this is meant, that if an indorser-say a third indorser-is sued, he cannot defend himself by saying that the names of the maker and first and second indorsers, or either of them, were forged, because by indorsing it himself he gives his indorsee a right to believe that the previous signatures were genuine. And an acceptor cannot say that his drawer's name is forged; but he may say that an indorsement which was on the bill when he accepted it was forged, because an indorsement of a bill comes properly and in order of law after acceptance.
If a holder strikes out an indorsement by mistake, he may restore it; if on purpose, the indorser is permanently discharged.
A holder may bring his action against any prior indorser, either by making titie through all the subsequent indorsements, or by filling any blank indorsement specially to himself, and suing accordingly; but then he invalidates all the indorsements which are subsequent to that which he has made special to himself.
One may make a note or bill payable to his own order, and indorse it in biank; and this is now very common in our com. mercial cities, because the holder of such a bill or note can transfer it by delivery, and it needs not his indorsement to make it negotiable further. A note to the maker's own order, if not indorsed by him, is, strictly speaking, of no force against him. But there is some disposition in the courts to say that a holder of such note may sue the maker as if the note were to bearer.
A transfer by delivery, without indorsement, of a bill or note payable to bearer, or indorsed in blank, does not generally make the transferrer responsible to the transferree for the pay. ment of the instrument. Nor has the transferree a right to fail back, in case of non-payment, upon the transferrer for the original consideration of the transfer, if the bill were transferred in good faith, in exchange for money or goods; for such transfer would be held to be a sale of the bill or note, and the purchaser takes it with all risk.
An indorsement may be made on the paper before the bili
or note is drawn; and such indorsement, says Lord Mansfield, "is a letter of credit for an indefinite sum, and it will not lie in the indorser's mouth to say that the indorsements were not regular.” The same rule applies to an acceptance on blank paper. So an indorsement may be made after or before acceptance, though strictly proper only after.
A bill or note once paid at or after maturity, ceases to be negotiable, in reference to all who had been discharged by the payment. If issued again, it is like a new note without their names. If a bill or note is paid before it is due, it is valid in the hands of a subsequent bonâ fide indorsee, and must be paid to him.
A portion of a negotiable bill or note cannot be transferred, so as to give the transferree a right of action for that portion in his own name. But if the bill or note be partly paid, it may be indorsed over for the balance.
After the death of a holder of a bill or note, his executor or administrator may transfer it by his indorsement. The husband who acquires a right to a bill or a note which was given to the wife either before or after marriage, may indorse it.
If the rule that the same party cannot be plaintiff and defendant, prevents the action, as where A, B, & Co. hold the note of A, C, & Co., so that if a suit were brought A would be one of the plaintiffs and one of the defendants also, which cannot be, A, B, & Co. may indorse the note to D, who may then sue A, C, & Co.
THE RIGHTS AND DUTIES OF THE ACCEPTOR.
ACCEPTANCE applies to bills, and not to notes.
It is an engagement of the person on whom the bill is drawn to pay it according to its tenor. The usual way of entering into this agreement, or of accepting, is by the drawee's writing his name across the face of the bill, and writing over it the word “accepted.” But any other word of equivalent meaning may be used, and it may be written elsewhere, and it need not be signed, or the drawee's name alone on the bill may be enough; a written promise to accept a future bill, if it distinctly define and
describe that very bill, has been held in this country as the equivalent of an acceptance, if the bill was taken on the credit of such promise.
A banker is liable to his depositor without acceptance of his checks, if he refuses to pay checks drawn against funds in his hands.
If a bill is accepted by a part only of those jointly responsible, or joint drawees, it may be treated by the holder as dishonored; but if not so treated, the parties accepting will be bound.
An acceptance may be made after maturity, and will be treated as an acceptance to pay on demand.
The acceptance may be cancelled by the holder; and if this cancelling be voluntary and intended, it is complete and effectual; but if made by mistake, by him or other parties, and this mistake can be shown, the acceptor is not discharged. And if the can celling be by a third party, it is for the jury to say whether the holder authorized or assented to it.
If a qualified acceptance be offered, the holder may receive or refuse it. If he refuses it, he may treat the bill as dishon. ored; if he receives it, he should notify antecedent parties, and obtain their consent; without which they are not liable. But it he protests the bill as dishonored, for this reason, he cannot hold the acceptor upon his qualified acceptance.
A bill drawn on one incompetent to contract, as from infancy, marriage, or lunacy, may be treated by the holder as dishonored.
A bill can be accepted only by the draween-in person or by his authorized agent, or by some one who accepts for honor.
ACCEPTANCE OR PAYMENT FOR HONOR.
If a bill be protested for non-acceptance or for non-payment, any person may accept it, or pay it for the honor either of tho drawer or of
indorser. This he usually does by going with the bill before the notary public who protested the bill, and there declaring that he accepts or pays the bill for honor; and he should designate for whose honor he accepts or pays it, at the time, before the notary public, and it should be noted by him.
A general acceptance supra protest (which is the phrase used both by merchants and in law, meaning upon or after protest) for honor, is taken to be for honor of the drawer. The drawee himself, refusing to accept it generally, may thus accept for the honor of the drawer or an indorser. And after a bill is accepted for honor of one party, it may be accepted by another person for honor of another party. And an acceptance for honor may be made at the intervention and request of the drawee.
No holder is obliged to receive an acceptance for honor; he may refuse it wholly. If he receive it, he should, at the maturity of the bill, present it for payment to the drawee, who may have been supplied with funds in the meantime.
If not paid, the bill should be protested for non-payment, and then presented for payment to the acceptor for honor.
The undertaking of the acceptor for honor is collateral only; being an engagement to pay if the drawee does not. It can only be made for some party who will certainly be liable if the bill be not paid ; because, by an acceptance or by a payment, properly made, for honor, supra protest, such acceptor or payer acquires an actual claim against the party for whom he accepts, or pays, and against all parties to the bill antecedent to him, for all his lawful costs, payments, and damages, by reason of such acceptance or payment. This is an entire exception to the rule that no person can make himself the creditor of another with. put the request or consent of that other; but it is an exception established by the law-merchant.
The reason why bills of exchange are sometimes accepted or aid for honor is to save the party for whose honor this is done, from the very heavy damages of a protested bill.
In many of our States it is a common practice to give a promissory note, and include in it a confession of judgment, for the amount. A suit may then be brought on the note as soon as it is due and unpaid, and a judgment taken out at once with. out the delay of a trial; and execution may issue on the judg. ment. Sometimes by the same note the promisor waives or renounces the benefit or protection of all exemption laws; and then the execution may be satisfied from any of his property that the sheriff can find.
after date, for value received, promise to pay or bearer,
dollars, with interest, and without defalcation or stay of execution. And
do hereby confess judgment for the above sum, with interest and costs of suit, a release of all errors, and waiver of all rights to inquisition and appeal, and to the benefit of all laws exempting real or personal property from levy and sale.
Sometimes, in ad lition to the above, the same note has below it a power of attorney, authorizing the attorney whose name is put into the blank left for that purpose to appear in court for the promisor, and confess judgment. Sometimes the power is given to an attorney whom the parties agree upon, and then na other attorney can confess the judgment. It is, however, far more usual, and better, to insert the name of an attorney, and add, as in the following form, “or any attorney of any court of record.”
Sometimes the note is followed on the same paper by a power to confess judgment, and a waiver of all right of exemp tion; both the power and the waiver extending beyond the abovo written note, and covering other notes and bonds and other evidence of debt.
19 for value received,
promise to pay to the order of
the sum of
dollars, with interest, in (time)
(Signature.) Know all Men by these Presents, That whereas,
the subscriber now justly indebted to upon a certain promissory note, bearing even date herewith, for the sum of
dollars, and cents, made payable to the order of the said
and due from time to time hereafter become further or otherwise justly indebted to the said
upon bonds, promissory notes, due-bills, and other written evidences of debt, made, or to be made, indorsed or accepted by
and held or owned by the said assignee or assignees hereof.