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the bill was given for a commercial operation, then whoever of the parties is a merchant will be bound to pay according to the requirement of commercial law. A party who signs a bill as the attorney of the drawer, the acceptor, or of an indorsee ought to express that he signs it in that capacity above his signature, and prove his authority (a).

Bills payable to order or bearer are transferable.

The transfer

by indorsement or by simple delivery.

SECTION VIII.

BRITISH LAW.

INDORSEMENT.

All bills or notes payable to the order of the payee, or to bearer, are transferable by indorsement and delivery (b). But bills and notes not containing a direction or promise to pay to the order of the payee or bearer are in England and Ireland not transferable, so as to give to the assignee a right of action thereon, though if the words of transfer are omitted by mistake they may be supplied. In Scotland, however, bills or notes so made, without the words "or order," are transferable (c). A promissory note payable to the maker's own order is not a negotiable instrument, but when a note in that form is indorsed in blank, and put in circulation by the maker, it becomes in effect a note payable to bearer (d).

A bill or note may be transferred by indorsement in full or in may be made blank, by restrictive or conditional indorsement, or by simple delivery without indorsement. An indorsement in full is where the bill is transferred to a given person or his order; an indorsement in blank is where the signature of the payee only is put on the back, or on any part of the bill or note. By an indorsement in blank, the property in the bill passes as effectually as by an indorsement in full, and where a bill is so indorsed it is committed to the holder to hand it over to a third person to sue upon it in his behalf (e).

(a) Spanish Code of Commerce, §§ 434, 435.

(b) 3 & 4 Anne, c. 9; 7 Anne, c. 25. (c) Plimley v. Westley, 2 Bing. N. C. 249; Smith v. Kendall, 6 T. R. 123; Grant v. Vaughan, 3 Burr. 1516;

Chrichton v. Gibson, Jan. 1726, 1
Ross, Lead. Cases.

(d) Brown v. De Winton, 6 C. B.
336;
Absolom v. Marks, 11 Q. B. 19;
Flight v. Maclean, 16 M. & W. 51.
(e) Law v. Parnell, 7 C. B. N. S. 282.

The negotiability of a bill or note may be restrained by a special indorsement in favour of a particular person, or for a special purpose, and if so restricted all subsequent holders are bound by the restriction (a). The restricted indorsee may sign the bill or note, but he would only give the subsequent indorsee a right of action for the benefit of the restraining indorser (b). Where a bill or note is, however, originally made payable to order or bearer, an exclusive indorsement, or an indorsement without the words " or order" would not restrain its negotiability (c). So where the bill or note has been indorsed in blank, its negotiability cannot be restrained by a special indorsement (d).

The negotia

bility of a bill may be restrained.

But if made order or payable to bearer, nego

tiability cannot be re

strained.

There is no valid transfer without the delivery of the Delivery neinstrument (e).

cessary to complete the transfer. Form of the

No special words are requisite for an indorsement. The signature of the payee in any part of the bill or note will constitute indorsement. an indorsement (ƒ). The indorsement may be made either on the back or on the face of the bill or note, and even on a separate paper attached to the bill or note. A bill or note may payee, or indorsee's

be indorsed in ink or in pencil (g) by the
own signature, or by his mark, if he cannot write (h). An in-
dorsement of a bill or note of twenty shillings and under must
have the date and the name of the indorser attested by one
witness (i).

A bill or note is usually indorsed after acceptance, and before payment, and is negotiable ad infinitum until it has been paid or discharged on behalf of the acceptor (k). The indorsement may be made even before the bill or note is complete, or even before the bill is accepted, except in the case of bills or notes of less than £5 (1).

Where a bill is indorsed after acceptance has been refused,

(a) Ancher v. The Bank of England, 2 Doug. 637; Treuttel v. Barandon, 8 Taunt. 100; Sigourney v. Lloyd, 8 B. & C. 622.

(b) Murrow v. Stewart, 8 Moore, P. C. 267.

(c) Edie v. The East India Company, 2 Burr. 1216.

(d) Walker v. Macdonald, 2 Exch. 331; Smith v. Clarke, 1 Esp. 180.

(e) Cox v. Troy, 5 B. & Ald. 474; Bromage v. Lloyd, 1 Exch. 32; Sains

VOL. I.

bury v. Parkinson, 18 L. T. 198, C. B.;
Young v. Glover, 21 Jur. 637, C. B.
Rex v. Lampton, 5 Price, 428.

(ƒ) Peacock v. Rhodes, Doug. 633.
(g) Geary v. Physic, 5 B. & C.

234.

(h) George v. Surrey, M. & M. 516. (i) 17 Geo. 3, c. 30; 27 Geo. 3, c. 76. (k) Allen v. Lawrence, 3 M. & S. 95 ; Hubbard v. Jackson, 4 Bing. 390.

(1) Russell v. Langstaffe, 2 Doug. 514; 17 Geo. 3, c. 30, s. 1.

с с

When inmay be made.

dorsement

after refusal of acceptance.

Indorsement but before it is due, the party taking it, without notice of any suspicious circumstances and malâ fide, would not be affected by the taker, but if he had notice of the dishonour he could not recover (a). A bill or note may be transferred even after it has become due, in which case the indorsement is held to be equivalent to the drawing of a bill payable at sight (b).

Indorsement after ma

turity.

Right of the indorsee in such a case.

Who may in dorse.

Where, however, the bill or note is indorsed after maturity, the indorsee will be held to have taken it subject to all the defences which could have been made by any previous holder. After a bill or note is due it comes disgraced to the indorsee, and it is his duty to make inquiries concerning it. If he takes it, though he gives full consideration for it, he takes it on the credit of the indorser, and subject to the equities with which it may be encumbered, those equities, however, which affect the bill itself, and not any collateral claims existing between the collateral parties to it (c). Thus the want of consideration between the original parties would not be such equity as will bar the indorsee from maintaining an action on a bill or note (ɗ).

The indorsee is in all respects put in the place of the indorser, and if the person who indorsed the bill or note could himself have maintained an action on it, so could the indorsee notwithstanding the bill was indorsed after it became due (e). Once however, the bill or note has been paid it can no longer be transferred, so as to render any of the parties liable who would otherwise be discharged (ƒ).

Whoever has the absolute property in a bill or note made payable to himself, or to his order, may assign it as he pleases, and thereby transfer the right to the assignee to maintain an action thereon (g). The right to transfer would be acquired by a person having a legal interest in the bill or note, even although

(a) O'Keef v. Dunn, 6 Taunt. 335; 5 M. & S. 282; Goodman v. Hervey, 4 A. & E. 870; Crossley v. Ham, 13 East, 498; Brown v. Davis, 3 T. R. 80; Raphael v. The Bank of England, 17 C. B. 161.

(b) Mitford v. Walest, 1 Ld. Raym. 575; Dehers v. Harriott, 1 Show. 163; Bohem v. Stirling, 7 T.;R. 430; Sturtevant v. Forde, 4 M. & G. 101.

(c) Ashurst v. Official Manager of the Bank of Australia, 27 L. J. 168; O'Keef v. Dunn, 5 M. & S. 282; Tinson

v. Francis, 1 Camp. 19; Holmes v. Kidd, 28 L. J. Exch. 112; Whitehead v. Walker, 10 M. & W. 696, & 19 & 20 Vict. c. 60, extends the same law to Scotland.

(d) Carruthers v. West, 9 M. & W. 506; Carr v. Jowell, 16 C. B. 674. (e) Chalmers v. Lanion, 1 Camp. 383. (f) Bartrum v. Caddy, 9 A. & E. 275; Beck v. Robley, Bailey on Bills, 125; 14 B. C. 89.

(g) Stone v. Rawlinson, Willes, 562.

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 bond fide and for value (b).

When a bill or note has been intrusted to an agent for a par- No property ticular 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).

a bill is intrusted for a particular purpose.

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.

(e) 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, 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.

(i) 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 bonâ 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 (). 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;
Bagnall v. Andrew, 7 Bing. 217.

(c) Herbert v. Wilcox, 6 Bing. 203;
Thompson v. Jackson, 3 M. & G. 621;
Jackson v. Thompson, 2 Q. B. 887;
Biliter v. Young, 6 E. & B. 1.

(d) Tasker v. Scott, 6 Taunt. 234.
(e) Ex parte Waring, 2 Rose, 182;
Ex parte Perfect, 1 Mont. 25; Ex parte
Prescott, 1 Mont. & Ayrt. 316; Ex parte
Copeland, 2 Mont. & Ayrt. 177.

(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.

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