ILLUSTRATION 5 New York, N. Y., August 1, 1900. to the order of Thomas Brown Four Hundred Dollars. JAMES ROBINSON. To Francis Bedlow, 47 Beaver street, New York City. Indorsed on back: Thomas Brown, George Miller. In Illustration 5, note that Robinson is the drawer (if it were a promissory note he would be called the maker); Brown is the payee; Bedlow is the drawee, also the acceptor; and Brown and Miller are indorsers. If they passed the instrument to you, you would be the indorsee or holder. The distinction between the drawer of a bill of exchange and the maker of a promissory note is made because the contract of the one differs from that entered into by the other. The two are frequently confused, and the importance of the distinction does not become apparent until dispute arises upon the instrument. We have now named all of the parties to negotiable instruments. The engagement, or understanding, which each enters into by being connected with the instrument, differs in some respects from that of each of the others. The rights and liabilities of each will be considered in their proper order. PART II FORM AND ESSENTIAL CHARACTERISTICS (Sec. 20.) An instrument to be negotiable must conform to the following requirements: 1. It must be in writing, and signed by the maker or drawer; 2. Must contain an unconditional promise or order to pay a sum certain in money; 3. Must be payable on demand, or at a fixed or determinable future time; 4. Must be payable to order or to bearer; and 5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty. For illustrations of a simple form of a promissory note, bill of exchange, or draft, and check, see illustrations 1, 2, and 3, pages 10, II. Writing. The custom of merchants demanded all negotiable instruments to be in writing. You can make an oral contract, it is true; but no oral promise or order would be regarded as a note, bill, or check. The statute now says, in writing; and it must be followed. But no particular writing material, nor any particular material for receiving the writing, is necessary. You may use a pencil, as well as ink, and it may be printed if desired. Any ma terial strong enough to hold the writing will answer-paper, slate, bark, or anything else. Signature. Of course the instrument must be signed in some way in order to make it valid. Any mark will be sufficient so long as it expresses the intention of the drawer or maker to execute the particular instrument, or undertaking. There are several instances in the cases where the signature has been a simple mark, ciphers, figures, etc. If a mark or other device is used in signing, however, the holder has to show that what the party did write was intended to answer the purpose of the signature. There must be a signature of some kind. One or two cases of a draft or bills of exchange have occurred where the instruments were not signed by the maker. The drawee, knowing the writing, accepted them; and when actions were brought, the instruments were held to be promissory notes, the drawee having impliedly agreed or promised to pay the amount at the proper time. instance: New York, August 1, 1900. For Pay to the order of George Smith Four Hundred Dollars To Wm. Kenney, Tarrytown, N. Y. (Unsigned.) Kenney accepted this by writing his name across the face of the instrument, and he was held to be the maker of a promissory note. Trade or assumed name. No person is liable on the instrument whose signature does not appear upon it. (Sec. 37.) But one who signs in a trade or assumed name will be liable to the same extent as if he signed his own name. So long as there is intention to sign, any substitute may be used, and it will bind the party so signing. Agency. Any person may sign as a duly authorized agent (Sec. 38), but due care should be taken to make known the agency. The safest way to sign is to write the name of the principal-be it individual or corporation—and then sign as agent or officer. For example: The Mercum Trading Co., 66 per Wm. Long, Treasurer. George Holdsworth, Or, by Wm. Adams, Agent (or attorney). Do not fail to bring in the name of the principal in such a way as to bind him; because, if one were simply to sign his name, and add agent" or treasurer to it, he would be personally bound. The courts have said that such a form of signature merely describes his position and identifies him. For example: "One year from date, we promise to pay to A. or order $1,000.00, value received. A. B., C. D., Trustees of First Parish." A. B. and C. D. were personally held because it does not appear that the instrument was executed in their office or character as agents. (Sec. 39.) "Per procuration." This term is seldom used in this country. It has a technical meaning, being an express intimation of a special and lim ited authority. A person taking an instrument so signed is bound to inquire into the extent of the authority of the person signing. So "a signature by 'procuration' operates as notice that the agent has but a limited authority to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority." (Sec. 40.) Forged signature. Where a signature is forged or made without authority of the person whose signature it purports to be, it is wholly inoperative. (Sec. 42.) The reason, of course, is, that one can not be allowed to countenance a crime. There have been instances where transactions contrary to good faith have been allowed when individual interests only were affected; but where the fraud amounts to a crime, public morality will not allow it to be enforced. The language used, "wholly inoperative," is the language of the statute. It must not be taken too broadly. If an instrument, say a promissory note-the name of the maker being forged-comes into possession of B., the payee, who transfers it to C., C. can recover from B., because B. has, by indorsing and transferring the instrument, warranted the genuineness of the signatures. B., however, could not recover from the maker. So, suppose B. is the drawee of a draft, and accepts it for C., the payee, who transfers it to D. The drawer's name is forged. B. pays the amount of the draft to D., and then finds out the forgery, and tries to recover the money |