cause, if he holds it, he may treat it as a mutual credit, and set off the 111. Time amount against his own debt; but if he transfers it, and after the act of of transfer. bankruptcy is obliged to take it up, he can only prove under the commission, and receive a dividend, and must pay the whole of his own debt. s If a party, whether before or after a bill or note be due, become the indorsee or holder by delivery, with notice that the party from whom he receives it, had no right to make the transfer, he will acquire no better right than such party, and a person who discounts a bill for the full value, after he knows that it has been lost by the owner, will not only be precluded from recovering thereon, but will be liable to an action of trover, even without any previous demand; nor can a person [ 131 ] who receives a bill with notice that an action has been commenced thereon, and still depending, sustain another action against the same party. (196) With respect to the modes by which transfers of a bill or note may be made, they depend on the terms of the instrument, as whether it be payable to the bearer, or to the order of the drawer or payee; in the former case it is transferrable by delivery, and in the latter by indorsement, which may be made either in blank, in full, conditional, or restrictive. In all cases in order to complete the legal transfer, a de 8 Ex parte Hale, 3 Ves. 304. 3 T. R. 509. 6 T. R 57. 1 Mont. 543. See posit, tit. Bankruptcy. Lovell v. Martin, 4 Taunt. 799. i Marsh and another v. Newell, 1 Taunt. 109. This was a rule nisi, to cancel the bail bond given herein under the following circumstances:-Plaintiff had arrested defendant on a promissory note payable to plaintiff or bearer; plaintiff afterwards paid the note to one Frost, who likewise arrested the defendant upon the same instrument. The court held, that as the transfer of the note to Frost was accompanied with a no tice of the action which was pending, Frost Per Eyre, C. J. in Gibson v. Minet, 1 The (169) A note once paid, ceases to be negotiable, and remedies lie only between the then existing parties. Therefore, if an indorsee pay a note on its being dishonoured by the maker, he cannot by a subsequent transfer enable a subsequent indorsee to maintain an action on it against a prior indorser. Blake v. Sewall, 3 Mass. Rep. 556. Boylton v. Greene, 8 Mass. Rep. 465. But such assignee may maintain an action upon it in the name of the indorsee who transferred the note to him. Boylton v. Greene. See Robertson & Co. v. Williams, 5 Munf. Rep. 381. A bill of exchange does not lose its negotiable character by being protested; but after protest, may be assigned, or transferred without assignment. 5 Munf. Rep. 388. And where A. and B. indorsed a promissory note for the accommodation of the defendant, and on its being dishonoured by the defendant, paid, and took it up, and then delivered the note to B. alone, with the original indorsement thereon; it was held, that B. might maintain an action in his own name alone, as indorsee. Havens v. Huntington, 1 Cowen, 387. A. purchased a note of B., who indorsed it in blank before it became due. A. sold it to C. before due, who charged the indorser by demand and notice, &c., and after it was due, A. re-purchased it, and sold it to D. Held, that D. might maintain an action on the note against the indorser in his own name. Williams v. Matthews, 3 Cowen, 252. And the case of Boyston v. Greene, was afterwards overruled in Massachusetts, and it was held, that when a promissory note has been paid, or taken up by the last indorser, its negotiability is not destroyed, but it may be transferred by him to another, and the new indorsee may maintain an action in his own name against any of the prior parties. Guild v. Eager, 17 Mass. 615. IV. Modes of transfer. IV. Modes livery of the instrument to the person for whose benefit it is transferred' or some person on his behalf, is essential.' of transfer. When a bill or note is, by the terms of it, payable to a certain person or bearer, it is transferrable by mere delivery; and where a bill is payable to the order of a fictitious person, it will operate against all parties aware of the circumstance, as a bill payable to bearer, and will be transferrable by delivery." A bill payable to the order of a certain person, or to that person or order, or assigns, or to the drawer's order, is transferrable in the first instance only by indorsement." [132] No particular form of words is essential to an indorsement, the mere signature of the party making it is in general sufficient. An indorsement which mentions the name of the person in whose favour it is made, is called an indorsement in full, and an indorsement which does not, is called an indorsement in blank. After an indorsement in full, the indorsee can only transfer his interest in the bill or note by indorsement in writing, but after an indorsement in blank, he may transfer by delivery only, and so long as the indorsement continues is blank, it makes the bill or note payable to bearer; and if the first indorsement on a bill or note be made in blank, it will, as against the payee, drawer, or acceptor, be assignable afterwards by mere delivery, notwithstanding subsequent indorsements in full having been made thereon." (1) title which the common law does not ac- The King v. Lampton and other, 5 Price, m See the last note but one. " Gibson v. Minet, 1 Hen. Bla. 600.-Ex parte Royal Burgh of Scotland, 19 Ves. Ante, 64. 311. able consideration for it, and acceptance and payment being refused, gave notice to the defendant, and brought this action. A case was reserved for the opinion of the court, and it was contended, that this bill was not to be considered as payable to the bearer, and the plaintiff had no better right upon it than the person of whom he took it; but the court said, there was no differ ence between a note indorsed in blank, and one payable to bearer, and the plaintiff had judgment. Francis v. Mott, at Ñ. P. before Lord Mansfield, cited Dougl. 612, was a similar case, and the Attorney-General, who was for the defendant, after attempting unsuccessfully to show that the plaintiff knew the bill was obtained unfairly, gave up the cause. Smith v. Clark, Peake, 225. A bill was indorsed in blank by the payee, and after some other indorsements was specially indorsed in full to Jackson, or order; Jackson sent it to Muir and Atkinson, but did not indorse it, and Muir and Atkinson discounted it with the plaintiffs. The plaintiffs struck out all the indorsements except the first, which continued in blank. This was an action against the acceptor, and was ob jected that the plaintiffs could not recover without an indorsement by Jackson, but Lord Kenyon held otherwise, and the plaintiff recovered. The plaintiffs afterwards (1) An action for contribution cannot be maintained by the first indorser of an accom modation note against the second indorser on the ground of the first indorser having paid the whole to the bank and the maker being insolvent. Hexon v. Weed, 2 Litt. 174. See ante 37, note 1. of transfer. When a bill or note is payable to the order of the drawer, or of a IV. Modes third person as payee therein named, the name of such drawer or payee must appear in the first indorsement, whether such indorsement be intended to convey to the indorsee the absolute property in the bill or note, or merely to enable him to receive payment thereof, as agent of such indorser; and although such indorsement is usually made by the drawer or payee writing on the back of the bill, yet it may be made by writing on the face of it, for the writing on the face of a note is of the same effect as an indorsement, and is always accepted and taken as such by the courts of law.t An indorsement made upon a bill or note thus, "I give this note to A." may be proved as testamentary, and is sufficient to transfer the property therein by the party making it ; but the mere circumstance of [ 133 ] the payee putting a number or any private mark on a bill or note will not be equivalent to an indorsement. So where a party promised to indorse a bill, and upon the faith of such promise, a stranger wrote an indorsement in the name of the party, it was considered that such indorsement was invalid. We have already seen that a bill of exchange may be drawn by an agent, so also it may be indorsed by a person acting in that capacity; in which case he must expressly indorse as agent, as, "E. F. per proc. A. B." or he may write the name of his principal, otherwise the indorsement would be inoperative."(172) In the negotiation of bills, it frequently happens that parties who are employed merely as agents are obliged to indorse them for the purpose of transmitting them to their principal, and if such indorsement be written conditionally, the agent (though he have no interest whatever in the transaction") will be liable to pay the amount of the bill; and therefore to exempt themselves from responsibility, it is necessary in such case to specify in the indorsement, that he makes it without intending to incur personal responsibility for the payment, which may be effected by adding the words "sans recours" which operates as a special indorsement, and is a notice to subsequent parties taking the bill, that such persons are acting only as agents." In the case of bills under five pounds, the indorsement must be at proved that Jackson desired Muir and Atkinson to discount this bill, but Lord Kenyon thought the plaintiff's case made out without this evidence. • Barlow v. Bishop, 1 East, 432. 3 Esp. 266. S. C. Per car. Yarborough v. Bank of England, 16 East, 12. Per Lord Chancellor, in Chatworth v. Leach, 4 Ves. 565. * Fenn ". Harrison, 3 T. R. 757. Ex parte Shuttleworth, 3 Ves. 368. y Moxon and another v. Pulling and another, 4 Campb. 51. Barlow v. Rishop, 1 East, 432.-3 Esp. 266. S. C. Ante, 27, 8. a Le Feuvre v. Lloyd, 5 Taunt. 749.- Goupy v. Harden, 7 Taunt. 159. 162. (172) The directors of a bank have power to authorize one of their number to transfer any notes given to the bank; and a blank indorsement by the person so authorized, eigned with his name as attorney, will be a good transfer of such notes. Northampton Bank v. Pepoon, 11 Mass. Rep. 288. IV. Modes tested by a subscribing witness, and must mention the name and place of transfer. of abode of the indorsee, and bear date at or before the making thereof; in short, it must be made in the form prescribed in the schedule to the statute 17 Geo. 3. c. 30. s. 1., which regulates these indorsements. Where the residence of the indorser of a bill is not well known in the commercial world, it would be advisable for him in all cases to mention in his indorsement the name of the place where he resides." In blank. An indorsement in blank is by far the most common, and it is made by the mere writing of the indorser's name on the back of the bill, with[134]out any mention of the name of the person in whose favour the indorsement is made, and is sufficient to transfer the right of action to any bona fide holder, and so long as it continues in blank, makes the bill or note payable to bearer; but the holder may write over it what he pleases, and a blank indorsement on a bill of exchange, conveys a joint right of action to as many as agree in suing on the bill, though such persons be not in partnership. It has been said, that such an indorsement does not transfer the property and interest in the bill to the indorsee, without some farther act; but that it gives him, as well as any other person to whom it is afterwards transferred, the power of constituting himself assignee of the beneficial interest in the bill, by filling it up payable to himself (as by writing over the indorser's name "pay the contents,") which he may do at the time of trial; it is now however considered, that a blank indorsement is sufficient of itself to transfer the right of action to any bona fide holder. A blank indorsement may be converted into a special one, by the holder's inserting above it the words "pay the contents to A. B." but such holder by writing those words, and transferring the bill to the party named in the indorsement, without writing his own name as an indorser, will not be liable on the bill. If the indorsee fill up the blank indorsement, and make it payable to himself, it is said the Per Lord Ellenborough, in Ord v. Portal, 3 Campb. 240. & Clark v Pigot, 1 Salk. 126. 12 Mod. 192. S. C. Lambert v. Pack, 1 Salk. 128. Lucas v. Haynes, id. 130. Lambert v. Oakes, 12 Mod. 244. Ld. Raym. 443. S. C. Vin. Abr. tit. Bills of Exchange, H 6. Bul. Ni. Pri. 275. Theed v. Lovell. 2 Stra. 1103. Lam- riot, 1 Show. 163. Moore v. Manning, i Vincent and others v. Horlock and to have been drawn by Jacks, payable to action cannot be brought in the name of the indorser, which otherwise IV. Modes it may be.* A blank indorsement makes a bill transferrable by the indorsee and every subsequent holder by mere delivery; and when the first indorsement has been in blank, the bill or note, as against the payee, the drawer, and acceptor, is afterwards assignable by mere delivery, notwithstanding it may have upon it subsequent indorsements in full, because a holder by delivery, may declare and recover as the indorsee of the payee, and strike out all the subsequent indorsements, whether special or not." (175) * A full or special indorsement contains in itself a transfer of the interest in the bill to the person named in such indorsement, Poth. Traite du contrat du Change, part 1. chap. 2. s. 23, 4. But a bare indorsement, without other words purporting an assignment, does not work an alteration of the property. Per cur. Lucas v. Haynes, Salk. 130. Clark v. Pigot, 12 Mod. 193. 1 Salk. 126. S. C. Clark having a bill of exchange payable to him or order, put his name upon it, leaving a vacant space above, and sent it to J. S. his friend, who got it accepted; but the money not being paid, Clark brought assumpsit against the acceptor; and it was objected that the action should have been brought by J. S. But per Holt, C. J., J. S. had it in his power to act either as servant to assignee. If he had filled up the blank space, making the bill payable to him, as he might have done if he would, that would have witnessed his election to have received it as indorsee. The property of the bill would have been transferred to him, and he only could have maintained this action against the acceptor; but since he has not filled up the blank space, his intention is presumed to act as servant only to Clark, whose name was put there; that on payment thereof, a receipt for the money might be written over his name, and therefore the action is maintainable by Clark. From the foregoing case it appears, that a blank indorsement is an equivocal act, and that it is in the power of the party to whom the bill is delivered, to make what use he pleases of such an indorsement. He may either use it as an acquittance to discharge the bill, or as an assign ment to charge the indorser. Selw. N. P. 4th ed. edit. 331, 2. Promissory notes and bills of exchange are frequently indorsed in this manner, "pay the money to my use," in order to prevent their being filled up with such an indorsement as passes the interest. Per Lord Hardwicke, Ch. in Snee v. Prescott, 1 Atk. 249. ment. "A bill, though once negotiable, is certainly capable of being restrained. I remember this being determined on arguA blank indorsement makes the bill payable to bearer; but by a special indorsement, the holder may stop the ne"Per Lord Mansfield, C. J. Argotiability cher v. Bank of England, Dougl. 659. Bayl. 48, 9 Peaceck v. Rhodes, Dougl. 611. 633. A bill was drawn by the defendant payable to Ingram or order; Ingram indorsed it in blank, after which it was stolen; the plaintiff took it bona fide, and paid a valuable consideration for it, and acceptance and payment being refused, gave notice to the defendant and brought this action. A case was reserved for the opinion of the court, and it was contended, that this bill was not to be considered as payable to bearer, and that the plaintiff had no better right upon it than the person of whom he took it; but the court said, that there was no difference between a note indorsed in blank and one payable to bearer, and the plaintiff had judgment. m Smith v. Clarke, Peake Rep. 235.1 Esp. Rep. 180. S. C. Anonymous, 12 Mod. 345. S. P. A bill was indorsed in blank by the payee, and after some other indorsements was indorsed to Jackson or order. Jackson sent it to Muir and Atkinson, but did not indorse it, and Muir and Atkinson discounted it with of transfer. (175) A blank indorsement of a bill passes all the interest therein to the indorsees in succession, discharged of all obligations which do not appear on the face of the bill. Wilkinson v. Nicklin, 2 Dall. Rep. 296. Where a negotiable note is indorsed in blank, the holder may fill it up with any name he pleases, and the person whose name is inserted will be deemed rightfully entitled to sue. Tyler v. Binney, 7 Mass. Rep. 479. Lovell v. Everton, 11 John. Rep. 52. And if in fact the indorsee has no interest, he will be deemed a trustee for the benefit of parties having the legal interest. Ibid. And where a person fairly and without fraud becomes possessed of a negotiable note indorsed in blank, it has been held that he may maintain an action thereon, although it has not been legally transferred to him. Little v. O'Brien, 9 Mass. 423. Bowman v. Wood 15 Mass. Rep. 534. |