each other. Prima All other parties are remote parties. facie, the drawer and acceptor, the drawer, or maker, and the payee, the indorser and his indorsee, are in direct relation. Indorsement means an indorsement completed by deliv ery. Indorser primarily denotes the holder of an instrument who indorses it, but it also means any person who backs a bill with his signature, and thereby incurs the liability of an indorser. Indorsee denotes the person to whom an instrument is specially indorsed and also the bearer of a bill indorsed in blank. Instrument means negotiable instrument. Issue means the first delivery of a bill or note, complete in form, to a person who takes it as holder. Maturity is the time fixed in an instrument for the payment of it. Notice means actual, though not formal, notice; that is to say, either knowledge of the facts, or a suspicion of something wrong, combined with a wilful disregard of the means of knowledge. Notice to the principal is notice to his agent; and notice to the agent is notice to his principal. Person includes a body of persons, whether incorporated or not. Primarily as qualifying the word liable applies to the person who, by the terms of the instrument, is absolutely required to pay the same; other persons are secondarily liable. Privity is the legal relation to another founded on common knowledge and concurrence; a participation in interest in respect to an action or thing. Value and valuable consideration have the same meaning. Written includes printed, and writing includes print. FORMAL REQUISITES OF NEGOTIABLE INSTRUMENTS 7. The special attributes of instruments are given in the definitions of each, such as that a bill is an unconditional order, and that a note is an unconditional promise, besides the certainty of the agreement to pay, the fact of payment, and the amount to be paid. Instruments must also be in writing, as the definitions of some express and as the natures of all imply. They may be written on paper or parchment, or on other suitable material, but, usually, paper is employed as the most suitable material for written characters. Each instrument must be signed, as by that act the amount to the contract is signified; it should also be dated. There must be parties capable of contracting, who must appear by name, or be plainly designated, in the instrument; there must be a consideration to support the contract, and the instrument must be executed by delivery. No particular phrases are needed for any instrument, but the essential words in each must appear. The careful business man will conform to the well-known forms in common use. 8. Where the language is ambiguous or there are omissions in the instrument, the following rules are applicable: 1. Where the sum payable is expressed in words and also in figures, and there is a discrepancy between the two, the sum denoted by the words is the sum payable; but if the words be ambiguous or uncertain, reference may be had to the figures to fix the amount. 2. Where the instrument provides for the payment of interest, without specifying the date from which interest is to run, the interest runs from the date of the instrument, and if the instrument be undated, from the issue thereof. 3. Where the instrument is not dated, it will be considered to be dated as of the time it was issued. 4. Where there is a conflict between the written and printed provisions of the instrument, the written provisions prevail. 5. Where the instrument is so ambiguous that there is doubt whether it be a bill or note, the holder may treat it as either at his election. 6. Where a signature is so placed upon the instrument that it is not clear in what capacity the person making the same intended to sign, he is to be deemed an indorser. 7. Where an instrument containing the words "I promise to pay" is signed by two or more persons, they are deemed to be jointly and severally liable thereon." SIGNATURE 9. The signing of negotiable instruments is governed by the rules that apply to contracts generally; but certain essentials as to the act of signing them require further explanation. As shown in our treatment of contracts, the common and ordinary method of signifying one's assent to a written contract is to sign it;' signature, properly, is the name of the party duly attached to the writing.* The signing of a bill, note, check, or other negotiable instrument, is constituted by a writing thereon of the name of the drawer or maker with intent to authenticate and give effect to the contract. Hence, besides a signature sufficient in form, the mind of the signer must act to show his intention in executing the paper." Thus, if one sign or indorse an instrument in ignorance of its character, he will not be held bound thereby because his mind-his intention in signing-did not accompany the signature." 6 N. Y. N. I. L., Sec. 36; Pa. N. I. L., Sec. 17. 7 See The Law of Contracts: Authentica tion, Signing. 81 Bish. Cont., Sec. 315. 951 Mo. 245 (1873). 10 Ibid.; L. R. 4 C. P. (Eng.) 704 (1869); 54 Ill. 196 (1870). ESSENTIALS OF THE SIGNATURE 10. By Whom Signed. - An instrument must be signed; an unsigned bill or note is fatally defective." No person is liable as drawer, indorser, or acceptor of a bill or maker or indorser of a note, who has not signed it as such; provided that (1) where a person signs a bill or a note in a trade or assumed name, he is liable thereon as if he had signed it in his own name; (2) the signature of the name of a firm is equivalent to the signature by the person so signing of the names of all persons liable as partners in that firm." In England, by the bills of exchange act, and in many of the United States, by the various negotiable instruments laws, a requirement as to who shall sign is fixed by the definitions: A bill of exchange is directed to be "signed by the person giving it," the drawer; and a promissory note is directed to be "signed by the maker." It is immaterial by what hand the signature is attached if there be authority to sign, express or implied." It is not necessary that the drawer or maker should sign the instrument with his own hand, but it is sufficient if his signature be written thereon by some other person by or under his authority." As where a bill is payable to C's order, and is indorsed in his name, his wife having authority to indorse bills for him; an indorsement of C's name, written by his daughter in the presence and by the direction of his wife, ist sufficient." Where the signature of a firm is affixed to an instrument, it is deemed to be the signature of all persons who are partners in the firm, whether working, dormant, or secret, or who, by holding themselves out as partners, are liable as such to third parties. Thus: X is a working partner in the firm of "B & Co." He retires from the firm, but gives no notice of his retirement. He is liable on a bill accepted by the firm subsequent to his retirement." Where the name of 115 C. & P. (Eng.) 403 (1832). 12 Eng. B. of E. Act, Sec. 23. 138 C. B. (Eng.) 630 (1849). 14 Eng. B. of E. Act, Sec. 91 (1). 158 C. B. (Eng.) 627 (1809); see The Law of Principal and Agent. 16 Chal. Dig. Eng. B. of E. Act (5th Ed.), p. 67. a firm, and the name of one of the partners in it is the same, and that partner draws, indorses, or accepts a bill in the common name, the signature is prima facie deemed to be the signature of the firm; but the presumption may be rebutted by showing that the bill was not given for partnership purposes or under the authority of the firm." In the case of a corporation, where any instrument or writing is required to be signed, it is sufficient if the instrument or writing be sealed with the corporate seal; but it is not necessary that the bill or note of a corporation should be under seal.1 In England, before the bills of exchange act, 1882, it was very doubtful whether a bill or note issued by a corporation under its seal constituted a negotiable instrument." A corporation otherwise competent could, however, be bound by a bill or note duly signed on its behalf, and this was a recognized exception to the rule that a corporation can only contract under seal." The present doctrine in England, as to the use by corporations of the seal, is that the seal is not necessary in contracts within the ordinary business of the corporation, as in the case of bills and drafts by banking companies, usual purchases of goods by trading companies, etc., and, generally, of contracts into which the constitution and objects of the corporation require it to enter." In the United States, in the absence of charter prohibition, a corporation may make a simple contract in writing, or an oral contract, through its authorized agents, where the subject-matter of the contract is within its powers, without using the corporate seal and without a formal authorization by resolution of the directors, as effectually as a natural person can do so." 11. Where Signed. - An instrument need not be subscribed. While, by custom, the drawer of a bill and the 17 Chal. Dig. Eng. B. of E. Act (5th Ed.), p. 68; see The Law of Partnership. 18 Eng. B. of E. Act, Sec. 91 (2). 19 L. R. 8 Q. B. (Eng.) 382, 383 (1873). 20 Grant Corp., p. 61. 227 Cranch (U. S.) 299 (1813); see subtitles Parties to Instruments, Capacity and Authority of Parties infra and The Law of Corporations. 21 Am. & Eng. Encyc. Law (2d Ed.), Vol. 7, p. 764; 3 P. Wms. (Eng.) 419 (1717). |