"ferred from one person to another in such manner as to con"stitute the transferee the holder thereof. If payable to bearer "it is negotiated by delivery; if payable to order it is negotia"ted by the indorsement of the holder completed by delivery." 26 This section is directly derived from the English Bills of Exchange Act, being the same in language and meaning.27 The term "holder" is defined by the statute 28 as including the payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof; and the term "bearer" means the person in possession of a bill or note which is payable to the bearer.29 We have already seen that an instrument is payable to bearer when it is expressed to be so payable, or when it is made payable to the order of a fictitious person, or when the payee does not purport to be the name of any person, or when the only or last indorsement is an indorsement in blank;30 and an instrument is payable to order when it is drawn payable to the order of a specified person, or to him or his order.31 The statutory rule, as above stated, is declaratory of the common law.32 b. Negotiation by delivery.- Independent of a statutory provision to the contrary, an instrument payable to bearer,33 or in 26. Neg. Inst. L. (N. Y.), § 60. For same provision in statutes of other States see Appendix. (N. Y.), § 2. 27. English Bills of Exchange Act, 1882, § 31 (1) (2) (3). 28. Neg. Inst. L. 29. Neg. Inst. L. (N. Y.), § 2. 30. Neg. Inst. L. (N. Y.), § 29. For same provision in statutes of other States see Appendix. 31. Neg. Inst. L. (N. Y.), § 28. 32. Common-law rule.-The following quotation from the opinion of Blackburn, J., in Crouch v. Credit Foncier, L. R., 8 Q. B. (Eng.) 374, states the uniform rule: Bills of exchange and promissory notes, whether payable to order or to bearer, are by the law merchant negotiable in both senses of the word. The person who, by a genuine indorsement, or, where it is payable to bearer, by a delivery, becomes holder, may sue in his own name on the contract, and if he is a bona fide holder for value, he has a good title notwithstanding any defect of title in the party (whether indorser or deliverer) from whom he took it." v. Straiton, 3 Keyes, 365, 3 Abb. Ct. App. Dec. 269; Pierce v. Crafts, 12 Johns. 90. Alabama.- Sprowl v. Simpkins, 3 Ala. 515. Arkansas.- Buckner v. Real Estate Bank, 5 Ark. 536, 41 Am. Dec. 105. Georgia.- Porter v. McCollum, 15 Ga. 528. Indiana.- Riley v. Schawacker, 50 Ind. 592; Hall v. Allen, 37 Ind. 541; Tescher v. Merea, 118 Ind. 586, 21 N. E. 316. v. Reynolds, 4 G. Iowa.- Mainer Mississippi.- Cobb V. Duke, 36 Nebraska.- Dusenbery v. Albright, Tennessee.- Smyth V. Carden, 1 Texas. Hopkins v. Seymour, 10 Tex. 202. Vermont. Adams v. Soule, 33 Vt. 33. New York.- Mechanics' Bank 538. 66 dorsed in blank,34 passes by delivery only, vests a valid, legal interest in the holder, and authorizes him to sue thereon in his own name. Where a note was payable to "the order of " the payee or bearer," it has been held that the note was payable to the bearer, and an action could be maintained thereon in the name of any holder.35 And a note payable to the order of the maker, and indorsed by him, becomes in effect a note payable to the bearer, and passes by delivery, and any one to whom the note is delivered becomes the legal holder thereof.3 36 c. Negotiation by indorsement. That the title of a negotiable instrument passes by an ordinary indorsement, whether special or general, is, of course, elementary. The term "indorsement," under the statute, means an indorsement completed by delivery;37 it implies a transfer, by writing, upon the instrument.38 It differs Under the statute in Illinois, a note payable to a person or bearer cannot be transferred or assigned by delivery only, so as to authorize the holder to sue in his own name; and a writ cannot be sustained upon the note by the holder against the person who thus assigned it to him. Hilborn v. Artus, 4 III. 344. And it is so held although the note may have been transferred by delivery in a State where such transfer would carry the legal right with it. Roosa v. Crist, 17 Ill. 450, 65 Am. Dec. 679. See also Turner v. Peoria & S. R. Co., 95 Ill. 134, 35 Am. Rep. 144. 34. Where notes are indorsed in blank, they are transferable by delivery; and if such notes are part of the assets of a decedent's estate, they may be sold and transferred by the executor without indorsement by himself, and without any order of the court. Wooley v. Lyon, 117 Ill. 244, 6 N. E. 885, 57 Am. Rep. 867. See also the following cases: Alabama.- Carter v. Lehman, Durr & Co., 90 Ala. 126, 7 South. 735. California.- Curtis v. Sprague, 51 Cal. 239. Illinois. Morris v. Preston, 93 Ill. 215; Wilder v. De Wolf, 24 Ill. 190. Kentucky. Caruth v. Thompson, 16 B. Mon. 572, 63 Am. Dec. 559. Maryland.- Lucas v. Byrne, 35 Md. Co., 16 Misc. 611, 38 N. Y. Supp. 527; Taylor v. Surget, 14 Hun, 116; Mitchell v. Hyde, 12 How. Pr. 460. North Carolina.- French v. Barney, 1 Ired. 219. Pennsylvania.- Gunnis v. Weigley, 114 Pa. St. 191, 6 Atl. 465. Wisconsin.- Lyon v. Ewings, 17 Wis. 61. 35. Bitzer v. Wager, 83 Mich. 223, 47 N. W. 210. But in an early New York case (Cock v. Fellows, I Johns. 23), where the instrument ran "Due the bearer hereof, 3 18s 10d, which I promise to pay to Abraham Thompson, or order, on demand, as witness my hand, this 22nd, 11th month, 1803. (Signed) Jordon Cock." It was held that the word "bearer" had reference to Thompson as the payee, and that no person could maintain an action on the note without his indorsement. 36. Jones v. Shapera, 57 Fed. 457, 6 C. C. A. 423; Bank of Lassen County v. Sherer, 108 Cal. 513, 41 Pac. 415. In New York it has been held under a statute (1 R. S. 768, § 5), which has since been repealed by the Negotiable Instruments Law, that a note payable to the order of the maker, as against an accommodation indorser having knowledge of the fact, is to be considered as if payable to the bearer, and is valid although negotiated without the indorsement of the payee. Irving Nat. Bank v. Alley, 79 N. Y. 536. 37. Neg. Inst. L. (N. Y.), § 2. 38. Clark v. Sigourney, 17 Conn. New York.- Beall v. Gen. Electric 311; Stowe v. Weir, 15 Ind. 341; 485. Massachusetts.- Lindsay v. Chase, 104 Mass. 253. Nebraska.- Everett v. Tidball, 34 Neb. 803, 52 N. W. 816. from an assignment in that by an indorsement the title to the instrument is transferred, while an assignment thereof transfers merely an interest therein.39 Difficulty has sometimes arisen in cases where parties have written upon the back of commercial paper a contract of guaranty, where the question has been somewhat mooted as to whether the title passes so as to constitute a person an indorsee who takes from such guarantor, within the rule protecting him against prior equities. It is insisted by the courts that nothing should be done by the person negotiating an instrument to affect its negotiable character. There must always be a transfer of the legal title, and such transfer must take such form as not to indicate a purpose to destroy the negotiable quality of the instrument. The form of the indorsement is not material. It may be an indorsement, although it is in terms an assignment. This was held at an early time in England, and, with the exception of two States, it appears to be the law in this country. It has been held that one who is the payee or the holder of negotiable paper, and who writes above his indorsement a contract of guaranty of payment, does not thereby restrict the negotiability of the instrument, but is an indorser with enlarged liability. It cannot Williams v. Osbon, 75 Ind. 280; Kern v. Hazlerigg, 11 Ind. 443, 71 Am. Dec. 360; Partridge v. Davis, 20 Vt. 499; Freeman Bank v. Ruckman, 16 Gratt. (Va.) 126. The proper definition of indorsement, in the commercial sense, is the writing of one's name upon or across the back of a bill of exchange, promissory note, or check, by which the property is assigned or transferred. The term "indorsement" by the law merchant is not a proper legal term for the act of one who adds his name in any manner to a nonnegotiable note. Richards v. Warring, 39 Barb. (N. Y.) 42. 39. Franklin v. Toogood, 18 Iowa, 515. Upon the back of a negotiable interest-bearing bond, made payable to a corporation, its managing president wrote the following, and signed the same in his official capacity: "For value received, I hereby assign the within bond, together with all our interest in and all our right under the mortgage securing the same, to Mary E. Merrill, without recourse." It was held to constitute a contract of indorsement, and not to be a mere assignment of the instrument. Merrill 40 42 41 v. Hurley, 6 S. D. 592, 62 N. W. 958, 55 Am. St. Rep. 859. 40. Roberts v. Frankum, 9 C. & D. (Eng.) 221. 41. Hailey v. Falconer, 32 Ala. 536; Brotherton v. Street, 124 Ind. 599; Sears v. Lantz, 47 Iowa, 658; Adams v. Blethen, 66 Me. 19, 22 Am. Rep. 547; Davidson v. Powell, 114 N. C. 575; Merrill v. Hurley, 6 S. D. 592, 62 N. W. 958, 55 Am. St. Rep. 859; Crosby v. Roub, 16 Wis. 616, 84 Am. Dec. 720. But see contra, Aniba v. Yeomans, 39 Mich. 171; Hatch v. Barrett, 34 Kan. 223. 42. Dunham v. Peterson, 5 N. D. 414, 67 N. W. 293, 57 Am. St. Rep. 556. Indorsement with enlarged liability. The written words "demand, notice, and protest waived, payment guaranteed," signed by the payee on the back of a negotiable instrument, constitute an indorsement with an enlarged liability. Buck v. Davenport Sav. Bank, 29 Neb. 407, 45 N. W. 776, 26 Am. St. Rep. 392. See also Herring v. Woodhull, 29 Ill. 92, 81 Am. Dec. 296; Myrick v. Casey, 27 Me. 9, 46 Am. Dec. 583; Vansandt v. Arnold, 31 Ga. 210; Partridge v. Davis, 20 Vt. 499. be denied, however, that there is conflict among the authorities upon this question. There are a number of cases which hold that a contract of guaranty upon the back of a negotiable instrument is not a negotiation of the bill, as understood by the law merchant.43 There is also a decided conflict of authority as to the question of a contract of assignment written upon the back of a negotiable instrument.4 44 $ 57. Indorsement, how made. a. Statutory provision.- The Negotiable Instruments Law provides that: "The indorsement must be in writing on the instru"ment itself or upon a paper attached thereto. The signature of "the indorser, without additional words, is a sufficient indorse"ment." 45 This is derived from a similar provision contained in the English Bills of Exchange Act,46 and is declaratory of the rule of the law merchant. b. General requirements.— No particular form of words is required in the transfer of negotiable paper, as long as they show an intention to transfer the paper without limitation or restriction.47 An indorsement in pencil48 or by mark is sufficient. A person may become bound by any mark or designation he thinks proper to 43. Trust Co. v. National Bank, 101 Sup. Ct. 68; Tuttle v. Bartholemew, 12 Metc. (Mass.) 454; Mamourieux v. Hewitt, 5 Wend. (N. Y.) 307; Belcher v. Smith, 7 Cush. (Mass.) 482. And see Ridley v. Hightower, 112 Ga. 476, 37 S. E. 733, to the effect that a contract of guaranty written on the back of a note by one whose indorsement was not necessary to a due transmission of the title bound him as surety and not as indorser. 44. Contract of assignment.- The case of Markey v. Corey, 108 Mich. 184, 66 N. W. 493, 36 L. R. A. 117, expressly holds that the liability of a person as indorser on a promissory note is not prevented by the use of the words "I hereby assign the within note to " the persons named as assignees. See also cases cited in the preceding note 39, and also Dickson v. Clayville, 44 Md. 573; Maine Trust Co. v. Butler, 45 Minn. 506, 48 N. W. 333, 12 L. R. A. 370; Smith v. Brooks, 65 Ga. 356. But in the case of Spencer v. Halpern, 62 Ark. 595, 37 S. W. 711, 36 L. R. A. 120, it was held that one is not liable as indorser on a promissory note who places over his signature thereon the words "I hereby transfer my interest in the within note." 45. Neg. Inst. L. (N. Y.), § 61. For the same section in the statutes of other States see Appendix. 46. The English Bills of Exchange Act, § 32 (1). 47. Lee v. Chillicothe Branch Bank, Fed. Cas. No. 8,186, 1 Bond (U. S.), 387; Herring v. Woodhull, 29 Ill. 92, 81 Am. Dec. 296, where the court said: "Literally indorsement means a writing, in dorse on the back of the bill or note. But it is well established that, though such is its import, it may be made on the face of the bill, and numerous indorsements may be made on a separate paper called an “allonge." Drew v. Jacocks, 6 N. C. 138; Partridge v. Davis, 20 Vt. 499; Farmers' Trust Co. v. Schenuit, 83 Ill. App. 267. 48. Brown v. Butchers & Drovers' Bank, 6 Hill (N. Y.), 443, 41 Am. Dec. 755; Cooper v. Bailey, 52 Me. 230; Closson v. Stearns, 4 Vt. 11, 23 Am. Dec. 245. adopt, provided it be used as a substitute for his name, and he intend to bind himself; it was so held in a case where the indorsement was in figures, "1, 2, 8," no name being written. It has also been held that an indorsement by the initials of the indorser,50 or by his surname,51 is valid. 53 c. Place of indorsement; allonge.- An indorsement is usually written on the back of the instrument, but the place is by no means essential. If the payee write his name on any part of a bill or note, with the intention of indorsing it, it is a sufficient indorsement.52 Such an indorsement may be made upon the face of a note with the same effect as if made upon the back." An assignment upon a separate and distinct paper does not amount to an indorsement so as to make the assignor liable as an indorser; the indorsement must be on the instrument itself, on a piece of paper so attached as to become a part thereof, or be incorporated with it.54 An indorsement or transfer of a promissory note may be on another paper attached to and made a part of the note, called an allonge,55 and it is not essential to a transfer of a note by this 49. Brown v. Butchers & Drovers' Bank, 6 Hill (N. Y.), 443, 41 Am. Dec. 755. 50. Merchants' Bank v. Spicer, 6 Wend. (N. Y.) 443. 51. Cooper v. Bailey, 52 Me. 230. 52. Haines v. Dubois, 30 N. J. L. 259; Richard v. Waring, 39 Barb. (N. Y.) 42. 53. Shain v. Sullivan, 106 Cal. 208, 39 Pac. 606, where the court said: "The ordinary mode of indorsing a note is by the indorser writing his name upon the back thereof, but the indorsement may be made upon the face of the note with the same effect as if made upon the back." See also Perry v. Bray, 68 Ga. 293; Herring v. Woodhull, 29 Ill. 92, 81 Am. Dec. 296; Gibson v. Powell, 6 How. (Miss.) 60. 54. Traders' Deposit Bank v. Chiles, 14 Ky. L. Rep. 617; Hays v. Plummer, 126 Cal. 107. 58 Pac. 447, 77 Am. St. Rep. 153; Bishop v. Chase, 156 Mo. 158, 56 S. W. 1080, in which case it was held that a transfer made by joining to the note a written paper containing a qualified indorsement, when there was ample space for making the indorsement on the note, was not sufficient to invest the transferee with all the rights of a bona fide purchaser. 66 55. Crosby v. Roub, 16 Wis. 616. Allonge. The English Bills of Exchange Act, 1882 (§ 32 [1]), provides that an indorsement written on an allonge, or on a 'copy' of a bill issued or negotiated in a country where copies' are recognized, is deemed to be written on the bill itself." A similar provision is contained in the German Exchange Law, Art. XI. This is also the law in this country, although the Negotiable Instruments Law does not include such a provision. As in Fountain v. Bookstaver, 141 Ill. 461, 31 N. E. 17, where it was held that if, by reason of the number of indorsements on the back of an instrument, it is so covered as to make it necessary that an extra piece of paper be attached to or pasted on the instrument, that may be done, and all subsequent indorsements may be written on the attached paper. And in Crutchfield v. Easton, 13 Ala. 337, it was held that where a torn note has been pasted upon another piece of paper, an indorsement of the note may be made on such paper. In the case of Folger v. Chase, 18 Pick. (Mass.) 63, in speaking of such an indorsement, Wilde, J., said: "The last objection is, that the indorsement on one of the notes was not made on |