RESTRICTIVE INDORSEMENT.

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must indorse, unless the one indorsing has authority to indorse for the others. (S. 32 (3).)

If a cheque is payable to "C. and D. or to the order of either of them," the indorsement of either is thereby rendered sufficient. (Cf. Watson v. Evans, 32 L. J. Ex. 137, a case on a note payable to three payees.)

32.-Where in a cheque payable to order the payee or indorsee is wrongly designated, or his name is mis-spelt, he may indorse the cheque as therein described, adding, if he think fit, his proper signature, (S. 32 (4).)

This is useful, as it would often be very inconvenient to return the cheque to drawer.

33. An indorsement is restrictive which prohibits the further negotiation of the cheque, or which expresses that it is a mere authority to deal with the cheque as thereby directed, and not to transfer the ownership thereof, as, for example, if a cheque be indorsed "Pay D. only," or "Pay D. for the account of X.," or "Pay D. or order for collection." (S. 35 (1).)

See Chalmers' notes to this section for further illustrations.

34.-A restrictive indorsement gives the indorsee the right to receive payment of the cheque, and to sue any party thereto that his indorser could have

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TRANSFER BY DELIVERY.

sued, but gives him no power to transfer his rights as indorser unless it expressly authorizes him to do so. (S. 35 (2).)

The reader should distinguish the effects of restrictive indorsement and crossing "not negotiable." A cheque crossed "not negotiable" is still transferable, but a cheque restrictively indorsed is not even transferable, unless the indorsement expressly authorizes further transfer.

35.-Where a restrictive indorsement authorizes further transfer, all subsequent indorsees take the cheque with the same rights and subject to the same liabilities as the first indorsee under the restrictive indorsement. (S. 35 (3).)

I.e., it becomes " not negotiable."

36.-Where a holder of a cheque payable to bearer negotiates it by delivery without indorsing it, he is called a "transferor by delivery."

A transferor by delivery is not liable on the instrument.

A transferor by delivery who negotiates a cheque thereby warrants to his immediate transferee, being a holder for value, that the cheque is what it purports to be; that he has a right to transfer it; and that at the time of transfer he is not aware of any fact which renders it valueless. (S. 58.)

DELIVERY TO COMPLETE CONTRACT.

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See for examples Jones v. Ryde, 5 Taunt. 488, and Gurney v. Womersley, 24 L. J. Q. B. 46.

37.-The contract entered into by the drawer and indorser of a cheque, in drawing and indorsing, is incomplete and revocable until delivery of the instrument in order to give effect thereto.

As between immediate parties, and as regards a remote party other than a holder in due course, the delivery

(a) In order to be effectual, must be made either by or under the authority of the party drawing, or indorsing, as the case may be.

(b) May be shown to have been conditional or for a special purpose only, and not for the purpose of transferring property in the cheque.

But if the cheque be in the hands of a holder in due course, a valid delivery of the cheque by all parties prior to him, so as to make them liable to him, is conclusively presumed.

Where a cheque is no longer in possession of a party who has signed it as drawer or indorser, a valid and unconditional delivery by him is presumed until the contrary is proved. (S. 21.)

In Baxendale v. Bennett, 3 Q. B. D. 525, an incomplete bill was stolen after B. had accepted it in blank. B. had sent it to C. for C. to sign as

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EFFECT OF WRONGFUL NEGOTIATION.

drawer. C. returned it unsigned, and B. put the blank acceptance into his drawer, whence it was stolen, filled up and negotiated to the plaintiff. B. was held not liable upon his acceptance. His name was not put upon a bill, but only upon an inchoate instrument, and, as we shall see, "in order that any such instrument, when completed, may be enforceable against any person who became a party thereto prior to its completion, it must be filled up strictly in accordance with the authority given." (§ 52, embodying s. 20 of the Act.) The instrument in this case was not so filled up, and B. was not liable.

Ingham v. Primrose, 7 C. B. N. S. 82, was a case where an acceptor of a bill which had a drawer's name (Murgatroyd's) thereto, and was a complete bill, tore it up, as the drawer told him he could not get it discounted. The drawer, in his presence, picked it up and subsequently pasted it together and negotiated it, its appearance not suggesting cancellation. The acceptor was held liable to a holder in due course. He had put his name to it as a complete instrument.

Chalmers suggests from the dictum of Williams, J., at p. 85, that if A. drew a cheque payable to bearer, intending to pay it to X., and it was stolen from his desk before he issued it, he would be liable on it to a holder in due course (p. 55).

INCHOATE AND COMPLETE INSTRUMENT.

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On the wording of s. 21 (2) (b), this view seems correct.

Baxendale v. Bennett, and Ingham v. Primrose, are reconcilable decisions.

In Baxendale v. Bennett the instrument was stolen before it was complete.

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It was never" delivered by the signer in order that it might be converted into a bill." In Ingham v. Primrose the bill was complete when it was torn up, and so "a valid delivery" by the drawer was conclusively presumed " so as to make him liable. This, it is submitted, is the real distinction between the two cases. Bramwell, L.J., in Baxendale v. Bennett points out that in Ingham v. Primrose the instrument was not stolen, and in the case before him it was. In Ingham v. Primrose "the defendant voluntarily parted with the instrument." Here it was only obtained from him by the commission of a crime (p. 530). Brett, J., simply does not agree with Ingham v. Primrose (pp. 532, 533). Neither judge notices that the bill in Ingham v. Primrose was a complete bill, with a drawer's signature, while that in Baxendale v. Bennett was an inchoate instrument, not drawn at all! (Cf. Stoessiger v. South Eastern Railway, 3 E. & B. 549.)

The case of Clutton v. Attenborough, 1897, A. C. 90, is directly in point. The plaintiff drew