S. 32. S. 33. Conditional indorsement. S. 34. Indorsement in blank and special indorsement. d A bill may be indorsed to several indorsees in accordance with section 7 (2),1 and, if a payment has been made to account, may be indorsed for the balance. 2 e See s. 22, n.a, No. 6. f In the case of Macdonald v. Whitfeld 3 it was held that the contrary had been proved. The Act does not decide which presumption is to prevail in case several indorsements are dated and do not appear in the order of their dates.1 g See s. 34. See s. 35. Indorsements may also be conditional.5 33. Where a bill purports to be indorsed conditionally the condition may be disregarded by the payer, and payment to the indorsee is valid whether the condition has been fulfilled or not.a a This provision does not affect the common law rule that such provisions are operative between indorser and indorsee." 34. (1.) An indorsement in blank specifies no indorsee, and a bill so indorsed becomes payable to bearer.a (2.) A special indorsement specifies the person to whom, or to whose order, the bill is to be payable. (3.) The provisions of this Act relating to a payee apply with the necessary modifications to an indorsee under a special indorsement. (4.) When a bill has been indorsed in blank, any holder may convert the blank indorsement into a special indorsement by writing above the indorser's signature a direction to pay the bill to or to the order of himself or some other person. 1 S. 34 (3). 2 1 Bell's Com. 427. 3 1883, 8 A.C. 733, cit.; s. 28 n.c 4 Cf. s. 13 (1). 5 S. 33. 6 See Thomson, 185. a A bill is indorsed in blank by the holder 1 signing his S. 34. name upon the back. An indorsement in blank may be converted by any holder into a special indorsement. If a bill after having been indorsed in blank is specially indorsed, it becomes payable only to the indorsee or his order.3 The form of indorsement may be "Pay A. B.," "Pay A. B. or order," or "Pay to A. B.'s order." A bill so indorsed is payable to the indorsee or his order.4 c See s. 7. 35. (1.) An indorsement is restrictive which pro- S. 35. hibits the further negotiation of the bill or which Restrictive expresses that it is a mere authority to deal with the indorsement. bill as thereby directed and not a transfer of the ownership thereof, as, for example, if a bill be endorsed "Pay D. only," or "Pay D. for the account of X.," "a or "Pay D. or order for collection." (2.) A restrictive indorsement gives the indorsee the right to receive payment of the bill and to sue any party thereto that his indorser could have sued,a but gives him no power to transfer his rights as indorsee unless it expressly authorise him to do so." (3.) Where a restrictive indorsement authorises further transfer, all subsequent indorsees take the bill with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorsement. C a Also “Pay A. for my use," or "for my account," or "to be credited to me," or any expression of similar import 5 If the meaning of an indorsement is doubtful, the presumption is against restriction. An indorsement which merely states the account for which the indorsement is made is not restrictive.6 1 See s. 2. 2 Sub-sec. (4), infra. 3 S. 8 (3). 4 S. 8 (4), (5). 5 Thomson, 184; Byles, 186. 6 Stiells v. Holmes, 1868, 6 M. 994; Buckley v. Jackson, 1868, L. R. 3 Ex. 135; Thomson, 185; see s. 8, n.o S. 35. S. 36. b This authority is given by the indorsement " Pay D. or order for collection.1 • The person to whom a bill so indorsed is paid is accountable to the person making the restrictive indorsement.2 a 36. (1.) Where a bill is negotiable in its origin Negotiation of it continues to be negotiable until it has been (a) overdue or dis- restrictively indorsed or (b) discharged by payment or otherwise.d or honoured bill. e (2.) Where an overdue bill is negotiated, it can only be negotiated subject to any defect of title affecting it at its maturity, and thenceforward no person who takes it can acquire or give a better title than that which the person from whom he took it had.f (3.) A bill payable on demand is deemed to be overdue within the meaning and for the purposes of this section when it appears on the face of it to have been in circulation for an unreasonable length of time. What is an unreasonable length of time for this purpose is a question of fact.1 (4.) Except where an indorsement bears date after the maturity of the bill, every negotiation is prima facie deemed to have been effected before the bill was overdue.i (5.) Where a bill which is not overdue has been dishonoured J any person who takes it with notice of the dishonour takes it subject to any defect of title attaching thereto at the time of dishonour, but nothing in this sub-section shall affect the rights of a holder in due course.m a See s. 8. 1 See Lloyd v. Sigourney, 1829, 5 Bing. 525. 2 Lloyd v. Sigourney, cit.; Thomson, 185. The term negotiable is used here to mean, capable of S. 36. being transferred in the sense of s. 31 (1). On the primary meaning of the term, see App. I. c See s. 35. ₫ See ss. 59-63. A bill may be indorsed after it has been protested, but the indorsement does not convey the protest.1 Though a bill is negotiable, the holder may be prevented from negotiating it if this is necessary for the ends of justice. The holders of a bill were sequestrated while indebted to the acceptors. The trustee proposed to indorse the bill so as to defeat the acceptor's right of compensation but at the acceptor's instance was interdicted from doing so.2 Though bills cease to be negotiable on being discharged, a bill payable on demand, if not delivered up on payment, may subsequently come into the hands of a holder in due course.3 • A bill not payable on demand is overdue on the expiry of the last day of grace.* f An indorsee after maturity cannot be a holder in due course.5 This sub-section comes in place of s. 16 of the Mercantile Law Amendment Act, 1856, by which the Scots law was assimilated to that of England. Formerly in Scotland the circumstance of a bill being overdue when endorsed was held merely to cast suspicion on the indorsement." There is no decision as to the meaning either of the expression, "any defect of title affecting it," in this section, or of the corresponding expression, “all objections or exceptions to which the said bill or note was subject" in the preceding Act. In England it was at one time held that an indorsee after maturity was in the position of an assignee, according to the maxim, utitur jure auctoris, but later it was decided that he was affected only by "equities attaching to the bill." In particular it has been decided that an accom7 See Thomson, 198; 1 Bell's Com. 427-8. 1 See s. 98, p. 216. 2 Harvey, Brand, and Co. v. Buchanan, Hamilton, & Co.'s Trustee, 1866, 4 M. 1128. See Nash v. De Freville [1900], 2 Q.B. 72; s. 61, n.c 4 Ss. 11 and 14. 5 S. 29. 6 19 and 20 Vict. c. 60. 19. 8 Tinson v. Francis, 1807, 1 Camp. 9 Burrough v. Moss, 1830, 10 B. & C. 558, 1 Ross' L. C. 336; Overend, Gurney, and Co., 1868, L.R. 6 Eq. 344, 359. F S. 36. modation party is liable to an indorsee for value after maturity. But the opposite has been held in America on the ground that an accommodation bill is a credit for a limited time.2 A claim of compensation also, though good against the holder at maturity, is ineffectual against an indorsee for value after maturity.3 But an agreement under which the indorser is restrained from suing on the bill, or which amounts to a discharge, affects an indorsee after maturity. The expression "defect of title' was substituted in the Act for "equity attaching to the bill," because the latter term was not known in Scots law.5 g See s. 10. ʼn This provision applies to cheques, but not to promissory notes. A cheque negotiated eight days after date has been held not to be overdue for this purpose.7 But two months after date a cheque would probably be held to be overdue.8 1 If an indorsement is dated, the date, unless the contrary be proved, is deemed to be the true one.9 If a single indorsement is undated, there is a presumption that it has been made of the same date as the bill.10 In England there is no presumption as to the date of an indorsement beyond that stated in this sub-section.11 j See ss. 43, 47. k See s. 29, n.h 1 See n.f, supra. 1 Overend, Gurney, and Co., cit. ; 2 Chester v. Dorr, 1869, 41 New York R. 279; cited in Chalmers, 120. 3 Overend, Gurney, and Co., cit. 359; Thomson, 199. 4 Crossley v. Ham, 1811, 13 East, 498; Dick v. Murison, 1845, 8 D. 1; Holmes v. Kidd, 1858, 3 H. & N. 891; Overend, Gurney, and Co., cit. 359, 360. 5 Chalmers, 117. |