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ILLUSTRATION. Where A. fraudulently obtained a bill payable to order from B. and handed it to C. in satisfaction of a bona fide debt; but without indorsing it;-Held, that C. could not acquire a title to the bill by obtaining A.'s indorsement after he had received notice of the fraud : Whistler v. Foster, 14 C. B. N. S. 248, 8 L. I. N. S. 317.
& See cases cited in the notes to s. 16 (1), as to limiting or negativing liability; and in the notes to s. 26, as to acceptances by persons in a representative character.
Requisites of indorse
Must be of entire bill.
32. An indorsement in order to operate as a negotiation Imp.Act,r.32 must comply with the following conditions, namely :Ind. Act,8.15
(a) It must be written on the bill itself and be signed of indorser by the indorser. The simple signature of the indorser on
the bill, without additional words, is sufficient;1 On allonge, An indorsement written on an allonge, or on a copy or copy."
of a bill issued or negotiated in a country where “copies are recognized, is deemed to be written on the bill itself; 2
(6) It must be an indorsement of the entire bill. A
partial indorsement, that is to say, an indorsement which Partial, not purports to transfer to the indorsee a part only of the negotiable.
amount payable, or which purports to transfer the bill to two or more indorsees severally, does not operate as a
negotiation of the bill; 3 All payees
(c) Where a bill is payable to the order of two or more payees or indorsees who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others: 4
How misspelled payee, &c., may indorse.
2. Where, in a bill payable to order, the payee or indorsee is wrongly designated, or his name is misspelt, he may indorse the bill as therein described, adding his proper signature; or he may indorse by his own proper signature:5
3. Where there are two or more indorsements on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved : 6
Order of indorsement. as in bill,
4. An indorsement may be made in blank or special. It Sec. 32. may also contain terms making it restrictive.
1 An “indorsement” of a bill is defined as meaning an indorsement in writing completed by delivery. Where a torn note had been pasted upon another piece of paper, an indorsement of the note may be made on such other paper itself; and in that case it is not necessary to prove when the indorsement was made : Crutchfield v. Easton, 13 Ala. 337. “I guarantee the payment of the within,” indorsed on a note over the signature of the payee, is an indorsement of the note, and not a guarantee or collateral engagement for its payment: Walker v. O'Reilly, 7 U. C. L. J. 300. An indorsement written with a pencil is valid : Geary v. Physic, 5 B. & C. 234 ; s. p., Closson v. Stearns, 4 Vt. 11. See the cases cited to s. 17, as to acceptances of bills of exchange; and as to delivery, see s. 21; as to negotiation, see p. 31; as to signature by an agent, see s. 90; as to indorsement of bills in a set, see s. 70.
2 An allonge (or rider) to a bill is a term which has not been interpreted in the Act. Where words have been long used in a technical sense, and have been judicially construed to have a particular meaning, and have been adopted by the Legislature as having a certain meaning, prior to the statute in which they are used, the rule of construction requires that the words used in such statute should be construed according to the sense in which they have been so previously used : Ruckmaboye v. Lulloobhoy, 8 Mo). P. C. C. 4. An allonge is a paper annexed to the bill, which is necessary when there is no room on the bill for further indorsements. It becomes a part of the bill when the indorsements are written on it. Where the copy of a bill is used, the person who circulates the copy should transcribe the body of the bill and all the indorsements; and, after all, should write : Copy,—the original being with (naming the person). If he should omit to state that the bill is a copy, or should write his own indorsement after the word copy, he may become liable on the copy as on an original : Byles on Bills, 311. A “duplicate” or “copy” of a bill may be used in the countries mentioned on p. 15.
3 By the law-merchant an indorsement must be of the whole bill : Heilbut v. Nevill, L. R. 4 C. P. 358. The following forms of indorsements may be read as illustrations of the different modes of indorsing bills. “John Smith” in all these forms is supposed to represent solely, or with his partner, “William Styles,” the payee and first indorser of the bill : 1. Indorsement by drawer or payee in blank (ss. 8 (3), 32 (4), and 34) :
'John Smith.” 2. The like indorsement by the firm (s. 23 (6)):-“Smith & Co.;" or, by a
partner :--"for self and William Styles, John Smith.” 3. The like indorsement by an agent, (ss. 25 and 26):—“As agent for John Smith, John Adams ;” or “ John Smith, by his agent, John Adams ;
per procurarion John Smith, John Adams.” And the agent may add to his signature, “ without recourse to me as agent.”
Sec. 32, 4. Qualified indorsement to avoid personal liability (s. 16 (a)) :-“John Sinith, without recourse;" or, “ John Smith, saus recours ;" or,
“ John Smith, with intent only to transfer my title and interest, and not to
become subject to any liability in case of non-acceptance or non-payment.” 5. Indorsement in full, or special (ss. 8 (4), 32 (4), and 34 (2)) :-“Pay
William Styles, or order, John Smith.' 6. Restrictive indorsement in favour of indorser (ss. 32 (4), and 35) :
"Pay William Styles, for my use, John Smith ;” or, “Pay William
Styles, for my account, John Smith.” 7. Restrictive indorsement, in favour of indorser, or of a particular person
only (ss. 8, 32 (4) and 35):—“Pay to William Styles only, John Smith ;"
or, “The within to be credited to William Styles, John Smith.” 8. Conditional indorsement (see s. 19 (2) (a) as to conditional acceptance,
and s. 33) :-“ Pay William Styles, or order, upon his giving up the
other bills accepted by me, and now held by him, John Smith. 9. Partial or limited indorsement (see s. 19 (2) (6) as to partial acceptance,
and s. 32 (6) :-“Pay William Styles, or order, $100, part of the
within, John Smith.” See further, the notes and cases cited to s. 19, as to the different modes of accepting bills of exchange.
4 ILLUSTRATIONS. The indorsement of a bill by one partner in his own name does not pass the legal title ; yet as each partner has the jus disponendi thereof, the transfer by one partner passes the entire equitable right, unless assailed upon some adequate ground : Alabama &c Co. v. Brainard, 35 Ala. 476.
A note made to partners in their individual names, may be indorsed by one of the partners in the firm's name : Mick v. Howard, 1 Ind. 250.
One of several executors may transfer a note by indorsement as collateral security for a judgment against the estate : Wheeler v. Wheeler, 9 Cowen 31. Sed contra, Smith v. Whiting, 9 Mass. 334.
A note made by several persons payable to “our and each of our order,” and indorsed by one is good : Absolon v. Marks, 11 Q. B. 19; 11 Jur. 1016.
If a bill is drawn by two, payable to us or our order,” and subscribed by both, though not in partnership, they make themselves partners, by the form of the bill, to the effect of making an indorsement by one of them valid : Carvick v. Vickery, 2 Dougl. 653 n.
A. and B. were partners. B. fraudulently indorsed bills belonging to the partnership to C. for a private debt, C. having notice. B.'s assignees in insolvency repudiated the right of C. to the bills ;-Held, that they could do so, and that the partner A. was rightly joined in the action : Heilbut v. Nevill, L. R. 4 C. P. 354.
When a person signs a note on a representation that others are to join, and one afterwards refuses to sign, the payee cannot recover againt the person who signed it, unless the jury is satisfied that such person, knowing the facts and being aware of his rights, consented to waive his objection : Leaf v. Gibbs, 4 C. & P. 466.
See further the notes and cases to ss. 23, 25, and 26.
5 ILLUSTRATIONS. Wherever one Christian name appears given to a party in full, with a capital letter before or after it, besides the surname, the Court will not assume that the party so described has anything more of a name than is thus given to him, and this without distinction between vowels and consonants : Bank of Upper Canada v. Gwynne, 7 U. C. Q. B. 140 ; Commercial Bank v. Roblin, 5 U. C. Q. B. 498 ; Dougall v. Reafisch, 6 U. C. Q. B. 391; Mair v. Jones, 7 U. C. Q. B. 139.
Where the indorsement of a note was “Pay the cashier of the Bank of A., or to W. F., their agent”;-Held, that W. F. was the only person that could indorse : Frazier v. Moore, 11 Tex. 755.
A bill drawn in favor of the cashier of a bank by his own name, only gives the bank a beneficial interest in such note, and the bank cannot sue on such bill in its corporate name : Bank of Upper Canada v. Ruttan, 22 U. C. Q. B. 451. But see Bank of the United States v. Davis, 4 Cranch C. C. 533.
A note payable to the order of John P., a person in esse, cannot be indorsed by Joseph P., a different person, although the note was in fact given to Joseph P. for a valuable consideration, and not to John P. : Boiles v. Stearns, 11 Cush. (Mass.) 820.
See further the cases cited in note 4 to s. 17 (3) p. 67 ante.
• The effect of each indorsement of a bill is to give to the holder a guarantee that the prior signatures of drawer and indorsers are regular and genuine (s. 55), and that each indorser is an additional surety to him for the due payment of the bill at maturity. Every indorser of a bill is a new drawer; and it is part of the inherent property of the original instrument that an indorsement operates in the nature of a new drawing of the bill by him : Penny v. Innes, 1 C. M. & R. 441. The decisions in cases where the order of the indorsements has not been in the order of transfer, or where a surety has indorsed before the payee, indicate some exceptional peculiarities which have not made them uniform. See cases in the notes to ss. 6, 23, and 56. As to cases affecting indorsers as co-sureties inter se, see notes to s. 59 (3.)
ILLUSTRATIONS. A second indorser may recover from the first indorser the costs of a suit to enforce bis liability without a special count of any further proof of an express request to defend : Fox v. Super, 18 U. C. Q. B. 258.
But where a second indorser had iudorsed a note as security to the first indorser for the amount of the note due to him upon the settlement of the accounts of a partnership, and with an understanding that M. should indorse the note after the such first indorser ;-Held, that he was liable to the prior indorser: Wordsworth v. McDougall, 8 U. C. C. P. 403.
The payee of a note indorsed in blank cannot by merely writing his name above the indorser, sue as indorsee against the latter unless he can shew an agreement creating between them the
relationship of indorser and indorsee : Robertson v. Hueback, 15 U. C. C. P. 298.
Where it appears on a note that the party assumes the responsibility of a second indorser, the locality of the names on the note is immaterial : Bacon v. Burnham, 37 N. Y. 614.
Sec. 32. Parties to notes are now held liable, contrary to the older cases, in the
order on which they stand on the note; and the last holder may so treat them, notwithstanding any agreement among themselves, and although some one of the latter parties may be the person for whose accommodation it was made, and who, therefore, is ultimately liable upon it; and this even when the holder is aware of the facts : Elder v. Kelly, 8 U. C. Q. B. 240. See Ianson v. Paxton, 23 U. C. C. P. 439, and Fisken v. Meehan, 40 U. C. Q. B. 146, and note to s. 59, sub-s. 3.
33. Where a bill purports to be indorsed conditionally, Imp. Act, s. the condition may be disregarded by the payer, and payAct, 8. 50 & ment to the indorsee is valid, whether the condition has
been fulfilled or not. )
1 This is new law; and will therefore only affect bills and notes made after the time the Act comes into operation. Prior to this enactment it was held that if the payee of a bill annexed a condition to his indorsement, the drawee, who afterwards accepted it, was bound by that condition ; and if it was not performed the property in the bill reverted to the original payee, and he could recover the amount of the bill against the acceptor : Robertson v. Kensington, 4 Taunt. 30. Though the terms of the clause are large enough to enable the “immediate parties” (see note 4, p. 83) to disregard the condition, it may be presumed that the contract of such parties would be binding, and that the payee would not be allowed to vary the legal and equitable rights of the other parties under the condition specified in the indorsement. See also Archer v. Bank of England, 2 Doug. 637, and Bill v. Lord Ingestre, 12 Q. B. 317; and s. 35 as to restrictive indorsements.
Indorsement in blank.
of Act to indorse
34 An indorsement in blank specifies no indorsee, and Imp. Act,8,34 a bill so indorsed becomes payable to bearer:
2. A special indorsement specifies the person to whom,
or to whose order, the bill is to be payable: 1 Application 3. The provisions of this Act relating to a payee apply,
with the necessary modifications, to an indorsee under a special indorsement : 2
4. Where a bill has been indorsed in blank, any holder indorsement. may convert the blank indorsement into a special indorse
ment by writing above the indorser's signature a direction to pay the bill to or to the order of himself or some other person. 3
1 The Act specifies several kinds of indorsements which will be found illustrated by forms in note (3) to s. 32.
Conversion of blank