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is valid Nouguier, §§ 333–341. Pothier (No. 168) was of a different opinion. By Art. 36 of the German Exchange Law, and Art. 287 of the Italian Code, the payer of a bill is not bound to verify the genuineness of the indorsements. In other respects the effect of a forgery is the same as in England.

§ 24.

signatures.

25. A signature by procuration operates as Procuration notice that the agent has but a limited authority to sign, and the principal is only bound by such signature if the agent in so signing was acting within the actual limits of his authority.

ILLUSTRATIONS.

1. B., who carries on business for himself, and is also in partnership with S., goes abroad; he gives S. an authority to accept bills in his name in respect of his private business. S. accepts a bill in B.'s name in respect to the partnership business, signing "J. B. p.p. H. S." The bill is negotiated. B. is not liable on this acceptance.'

2. By a resolution of the directors, the chairman of a company is authorized to accept bills drawn by A. against the deposit of securities. He accepts a bill drawn by A., signing per proc. the company, without requiring the deposit of security. The bill is negotiated to a bona fide holder. The company is liable."

3. A cheque payable to order is indorsed "per proc." without the authority of the payee. If the bankers pay it, the payment is protected by statute, and is valid.3

4. The manager in South America of an English limited company, in order to obtain a guarantee for the company's business, gives a note signed for myself and in representation of the company." This not being necessary, or in the ordinary course of the company's business, the company is not liable."

5. Detinue for a Government of India note payable to order. The note was payable to the plaintiff's order, and was indorsed in the form "D., by his attorney, X.," in pledge for a private debt of the agent's, though this was not known to the indorsee. The right of the indorsee to retain the note depends on the proper construc

1 Attwood v. Munnings (1827), 7 B. & C. 278; Stagg v. Elliott (1862), 12 C. B. N. S. 373; 31 L. J. C. P. 260.

2 Re Land Credit Co. (1869), L. R. 4 Ch. 460; and cf. Ex parte Meredith (1863), 32 L. J. Ch. 300.

3 Charles v. Blackwell (1877), 2 C. P. D. at pp. 159, 160, C. A., decided on 16 & 17 Vict. c. 59, s. 19. See, now, sect. 60, post, p. 208.

* Re Cunningham & Co., Limited (1887), 36 Ch. D. 532.

§ 25. Procuration signatures.

Liability of agent signing

without authority.

tion of the power of attorney held by X., and in construing it, it will be held that a power to sell does not include a power to pledge.1

6. An agent draws a cheque "per proc." in excess of his authority. The drawer is not liable on this cheque to a person who has cashed it in good faith, but he must account for any money which has come into his possession.2

There is perhaps a disposition to narrow the rule in the case of corporations.3 In an Irish case 4 a distinction is drawn between an acceptance signed "J. B., per proc. T. S.," and one signed "For J. B., T. S." The distinction does not seem founded on any clear principle. The case can be supported on other grounds.

In Attwood v. Munnings (Illustration 1), Bayley, J., says: "This was an action on an acceptance importing to be by procuration, and therefore any person taking the bill would know that he had not the security of the acceptor's signature, but of the party professing to act for him in pursuance of an authority from him. A person taking such a bill ought to exercise due caution, and it would be only reasonable prudence to require the production of that authority."

A person who, without authority, signs the name of another person to a bill, either simply or by a procuration signature, is not (except in the special case provided for by sect. 42 of the Companies Act, 1862, post, p. 340) liable on the instrument; but if the alleged principal be a fictitious or non-existing person, the signer is liable.7

Thus:

6

1. A bill drawn on B. is held by C. X., without authority accepts it for B., signing " B. per proc. X." X is not liable as acceptor, though he may be liable to C. or a subsequent holder in an action for a false representation.8

1 Jonmenjoy v. Watson (1884), 9 App. Cas. 561, P. C., distinguishing Bank of Bengal v. Macleod (1852), 7 Moore, P. C. 35; cf. Bryant v. Banque du Peuple, (1893) A. C. 170, P. C. If the agent is acting within his authority, the fact that he has abused it does not affect a holder without notice.

2 Reid v. Rigby, (1894) 2 Q. B. 40.

3 Re Land Credit Co. (1869), L. R. 4 Ch. 460, at p. 468.

O'Reilly v. Richardson (1865), 17 Ir. Com. L. R. 74; but cf. Balfour v. Ernest (1859), 28 L. J. C. P. at p. 176.

5 Attwood v. Munnings, 7 B. & C. 278, at p. 283.

Polhill v. Walter (1832), 3 B. & Ad. 114.

7 Cf. Kelner v. Baxter (1866), L. R. 2 C. P. 174; and see sect. 23 (1).

8 Polhill v. Walter (1832), 3 B. & Ad. 114; but is he not also liable as

2. Two directors of a limited company, which has no power to accept bills, accept a bill "per proc." the company. They may be personally liable in an action for false representations.1

In an action for false representation, under such circumstances, it lies on the holder to prove damage. The modern tendency is to restrict liability ex delicto to cases of intentional fraud. By German Exchange Law, Art. 95, a person who, without authority, signs a bill as agent for another is personally liable thereon. To sign the name of another person to a bill "per proc." without authority and with intent to defraud was not a forgery at common law, but it is now made so by statute.3

§ 25.

Persons sign

ing as agent

capacity.

26. (1) Where a person signs a bill as drawer, indorser, or acceptor, and adds words to his sig- or in reprenature, indicating that he signs for or on behalf sentative of a principal, or in a representative character, he is not personally liable thereon; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability.

(2) In determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is written, the construction most favourable to the validity of the instrument shall be adopted.

ILLUSTRATIONS.

1. Money is lent to a parish. The churchwardens give a note for the amount, signing it "J. B. and H. S., churchwardens." They are personally liable on the note as makers."

2. B. by will directs his executor to carry on his business. The executor does so, and, in the course of the business, accepts bills,

impliedly warranting his authority? See Collen v. Wright (1857), 27 L. J. Q. B. 215, Ex. Ch.

1 West London Commercial Bank v. Kitson (1884), 13 Q. B. D. 360, C. A. See at P. 362.

2 Eastwood v. Bain (1858), 3 H. & N. 738; 28 L. J. Ex. 74.

3 24 & 25 Vict. c. 98, § 24.

4 Rew v. Pettet (1834), 1 A. & E. 196.

78

§ 26.

signing them "J. S., executor of B." He is personally liable on these acceptances.1

3. D., the holder of a bill payable to his order dies. X., his executor, indorses the bill away, signing the indorsement, "J. X., executor of D." X. is personally liable on this indorsement, unless he add some such words as "without recourse against me personally." ." Quare, since the Act?

4. Money is lent to the X. Company. A note for the amount is given in the form, "We promise to pay, et cet.," signed.

"J. B., "J. S.,

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Directors of the X. Company, Limited. J. T., Manager.

The persons who sign are personally liable as makers.3

5. Money is lent to the X. Railway Company. amount is given in the form, "I promise to pay, et cet." (signed) A note for the "for the X. Railway Co. J. B., Secretary." J. B. is not personally liable."

6. Note in the form, "We, the directors of the X. Company, Limited, et cet." (signed by the directors), "J. B., J. S." In the corner of the note is the seal of the company, and the signature of an attesting witness. J. B. and J. S. are personally liable."

7. Bill specially indorsed to "C., agent." He indorses it away, signing "C., agent." C. is personally liable as indorser."

8. A note running "We, the undersigned, in the name and on behalf of the Reformed Presbyterian Church, Stranraer, promise to pay," is signed by three persons. They are personally liable on this note.7

This section was re-drafted in committee, and perhaps somewhat modifies the rigour of the common law rule. At any rate the older cases must be examined carefully with the words of the section. The principle is this, the terms agent, manager, &c., attached to a signature are regarded as mere designatio persona. The rule is applied with peculiar strictness to bills, because of the non-liability of the principal; "Is it not a universal rule," says Lord Ellenborough," that a man who puts his name to a bill of exchange thereby makes himself personally liable, unless he states upon the face of the bill that he subscribes it for another or by procuration of another, which are words of

1 Liverpool Bank v. Walker (1859), 4 De G. & J. 24.

2 Cf. Childs v. Monins (1821), 2 Brod. & B. 460.

3 Courtauld v. Sanders (1867), 16 L. T. N. S. 562.

4 Alexander v. Sizer (1869), L. R. 4 Ex. 102; but see Gray v. Raper (1866), L. R. 1 C. P. 694.

Dutton v. Marsh (1871), L. R. 6 Q. B. 361.

Bartlett v. Hawley (1876), 120 Mass. 92.

7 M'Meekin v. Euston (1889), 11 Sess. Cas. 363.

exclusion? Unless he says plainly, I am the mere scribe,' he is liable." Cf. sect. 23, ante, p. 65. It is often difficult to determine whether a given signature is the signature. of the principal by the hand of an agent, or the signature of the agent naming a principal. The maxim ut res magis valeat governs the construction. As to liability of agent signing his principal's name without authority, see note to last section. By sect. 31 (5), post, p. 105, a representative who is compelled to indorse may indorse in such terms as to negative personal liability.

The case of an executor or administrator often gives rise to difficulty. Where an executor merely winds up a transaction commenced by the testator, it is right that he should be able to protect himself from personal liability, but where he carries on the business and engages in fresh transactions, it is clear that the fact that he is an executor will not enable him to carry it on as a limited liability

concern.

§ 26.

1 Leadbitter v. Farrow (1816), 5 M. & S. at p. 349.

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