S. 24. nature, but not of an indorser's, though drawer and indorser be the same person.1

A person whose signature has been forged, may by his conduct bar himself from pleading the forgery. Whether he has done so is a question of fact; but to have this effect his conduct must be such as to lead the holder reasonably to infer that the signature is genuine. He will not be barred merely by silence after the forgery has become known to him.3 But if he has delayed repudiating liability so that the holder's position is prejudiced, or taken up a positive position inconsistent with a subsequent repudiation of the signature,5 he will be held to be barred.

In the case of M'Kenzie v. British Linen Co.,2 in which the Scottish decisions are reviewed, the facts were as follows:A bill bearing to be drawn and endorsed by A. was brought by the acceptor to a banker, who discounted it. It was dishonoured when due, and notice was sent to A., but he did not communicate with the bank. The notice was given on a Saturday, and on the following Monday the acceptor called at the bank with a similar bill for a smaller amount, and arranged a renewal, paying the difference to account. The second bill was also dishonoured. The bank sent notice to A. three days before the dishonour and immediately after. A fortnight after he received the first notice A. informed the bank that the bill was forged, and refused to pay it. It was held that the bank had renewed the first bill, and so enabled the forger to inform A. that it had been arranged, before A. had had time to make inquiries; that there was therefore no evidence that A. had authorised the signature of the second

1 S. 54 (2); see also as to negligence, p. 131.

2 M'Kenzie v. British Linen Company, 1880, 7 R. 836, rev. 1881, 8 R. (H.L.) 8, 6 A.C. 82; Freeman v. Cooke, 1848, 2 Exch. 654, 18 L.J. Ex. 114; Pickard v. Sears, 1837, 6 A. & E. 469; Bell's Prin. 27a; for terms of issue see Findlay v. Currie, infra; Brown v. British Linen Co., infra; Frost v. North of Scotland Banking Co., infra; Rathbone v. Glenny, 1833, 11 S. 574.

3 M'Kenzie v. British Linen Co., cit.; M'Arthur v. Paterson, 1825, 3

bill; and that A.'s delay in intimating the forgery, after S. 24. receiving the bank's notice regarding the second bill, was not sufficient to infer adoption, no prejudice having been caused to the bank thereby.

These cases do not fall exactly under homologation or under adoption. Though a forged bill is a nullity, yet in the cases cited persons whose signatures had been forged were held to have become parties to the bill in question, not at the date of the adoption, but as if they had signed at the date of the forgery.1 The burden of proof, after forgery is established, lies on the person alleging adoption.2

e See ss. 22, n.a, No. 6, and 25, n.b. It has been held in England that the ratification of a forgery in the following manner is inept. A man whose name had been forged to a note, on the note being presented to him denied the signature, but to protect the forger granted the following memorandum :-"I hold myself responsible for a bill for £20, dated Nov. 7th, 1869, bearing my signature and Richard Jones', in favour of Mr. Brook." On his subsequently refusing payment it was held that he was not bound, because the original act, being "illegal and void," could not be ratified. At the same time it was laid down that if he had simply admitted the signature he would have been estopped from subsequently denying it. Accordingly, whether this distinction between express and tacit adoption would be followed in Scotland or not, it appears that this decision does not conflict with those cited in the last note. In M'Kenzie v. British Linen Company Lord Blackburn said:" But even though it was not made out that the signatures were authorised originally, it still would be enough to make M'Kenzie liable if, knowing that his name had been written without authority, he ratified the unauthorised act. Then the maxim, 'omnis ratihabitio retrotrahitur

D

S. 24. et mandato priori equiparatur,' would apply. . . . If the person whose name was without authority used, chooses to ratify the act, even though known to be a crime, he makes himself civilly responsible, just as if he had originally authorised it."

S. 25.

Procuration signatures.

25. A signature by procuration operates as notice that the agent has but a limited authority to sign,a and the principal is only bound by such signature if the agent in so signing was acting within the actual limits of his authority.b

a This section applies to signatures either per procuration or in some other way bearing to be written for one person by another.1

Any person who has capacity to contract may appoint as his agent to draw, indorse, or accept bills a minor,2 or a married woman, but not a pupil or a person destitute of reason.1

3

Authority to sign bills is most regularly constituted by a power of attorney or other written mandate, but may also be given by verbal mandate, or by facts and circumstances implying acquiescence and implied authority.5 Partners have implied authority, subject to the rules stated above, to draw, accept, and indorse bills in their firm's name.® The statement that it was the practice of commission agents in a particular trade to draw and indorse bills per procuration of their principals without any special mandate to that effect, and that this practice was known to the principal whose agent signed and indorsed the bill in question, has been held relevant as an averment of agency. But it is not

to be inferred that from the practice of a particular trade S. 25. authority to sign bills will be inferred in every case. To found a proof of such authority by facts and circumstances, there must be full and explicit averments, particularly as to the principal's knowledge and acquiescence.1 The affairs of the firm of Cormack Brothers were in course of liquidation by an agent named Carter. To facilitate the liquidation Mrs. Cormack, a partner, and the agent opened a joint bank account on which either of them was to be entitled to draw. Carter, for his own purposes, accepted a bill drawn. upon Cormack Brothers, payable at the bank, by the signature "Margaret Cormack and R. Carter." The bill was dishonoured through lack of funds. It was held that Mrs. Cormack was not liable on the bill, because Carter had no authority to sign for her personally or for the firm, of which she was sole partner. It was proved that similar bills as well as cheques, signed "Margaret Cormack and Self, R. Carter," had been honoured by the bank; but this was found insufficient to establish liability against Mrs. Cormack, who was not proved to have acquiesced in the practice.2 A shipmaster has no implied power to bind his owners by bill even for necessaries. In the case of Miller and Co. v. Potter, Wilson, and Co., the holders of bills drawn by a captain upon his owners for necessary repairs, were found entitled, as assignees of the debt, to recover it from the owners.5

Want of authority in an agent may be supplied by ratification, which draws back to the date of the act in question.

The terms of an agent's authority are to be construed strictly. A mandate to draw bills does not authorise the agent to indorse them, though it should be taken into account in a proof by facts and circumstances of an authority to indorse, and a mandate to accept bills in course of a

7

1 Swinburne v. Western Bank of Scotland, 1856, 18 D. 1025.

2 Odell v. Cormack Brothers, 1887, 19 Q.B.D. 223.

8 London Joint Stock Bank v. Stewart, 1859, 21 D. 1327; Strickland v. Neilson and MacIntosh, 1869, 7 M. 400.

4 1875, 3 R. 105.

5 See Lord Justice-Clerk in London Joint Stock Bank v. Stewart, cit. 1330.

6 Miller v. Little, 1831, 9 S. 328bill signed without authority, delivered by principal.

7 Robinson v. Yarrow, 1817, 7 Taunt. 455; Prescott v. Flinn, 1832, 9 Bing. 19.

3

S. 25. particular business does not authorise the agent to accept bills for any other purpose.1 A foreign firm appointed an agent in this country with general power to sign for them per procuration. Some time later this authority was withdrawn. Subsequently a bank, which, as was proved, knew of the withdrawal of the mandate, but knew also that for certain purposes the agent still signed for the firm, continued to discount bills signed by him per procuration of them. It was held that the bank in doing so without inquiry had acted at their own peril, and that as the bills in question had in fact been granted by the agent for a debt of his own, the firm was not liable.2 A mandate to act as agent for a company in certain matters, including the purchase and sale of goods, to grant bills, and for all or any of the said purposes to do whatever ought to be done, does not authorise the agent to borrow on behalf of the company. A mandate to take entire charge of the interests of a company at a certain place does not authorise the agent to bind the company by bill for a purpose outside the ordinary course of the company's business, but does authorise him to borrow what is necessary for the business by all ordinary methods.5 A manager who had full authority to operate on his employers' bank account, overdrew it for his own purposes. He then, to replace the sum which he had misapplied, borrowed £20, and granted a cheque for the amount signed per procuration of his employers. It was found that he had no authority to overdraw the account or to borrow for his employers, that the effect under this section of the cheque being signed per procuration was to throw on the pursuer the duty of discovering the extent of the agent's authority, and that the pursuer could not recover from the employers on the cheque. But it was held that he was entitled to recover the amount on the ground that it had been applied for the benefit of the employers. In the case of Sinclair, Moorhead,

1 Stagg v Elliott, 1862, 31 LJ. C.P. 260.

2 North of Scotland Banking Co. v. Behn, Möller, and Co., 1881, 8 R. 423.

3 Bryant, Powis, and Co. v. La Banque du Peuple [1893], A.C. 170.

4

Cunningham and Co., Ltd., 1887, 36 Ch.D. 532.

5

Montaignac v. Shitta, 1890, 15 A.C. 357.

6 Reid v. Rigby and Co. [1894], 2 Q.B. 40.