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IV. Modes of transfer,

Special or in full.

Such being the effect of a first indorsement in blank, it has been observed, that it is advisable for the indorsee in some cases to fill it up so as to make it an indorsement in full, in order to avoid the risk which he may run, in case the bill be lost, of its getting into the hands of a bonâ fide holder'. When bills, &c. are deposited in a banker's hands, and entered short in his books, or are in his possession, in case he becomes bankrupt, his assignees will not be entitled thereto, though such deposit enables the banker to pass the interest to a third person taking it bonâ fide for a valuable consideration".

An indorsement in full, or special indorsement, is so called, because the indorser not only writes his name or that of his firm, but expresses therein in whose favour the indorsement is made, as, "pay the contents to Mr. A. B. or order." This indorsement contains in itself a transfer of the interest in the bill to the person named in the indorsement, and makes the bill transferrable in the first instance by the indorsement of A. B. only+; though afterwards, if A. B. make a blank indorsement, it is transferrable by delivery as well as by indorsement. As the negotiability of a bill, originally transferrable, can only be restrained by express restrictive words, the words" or order" need not be inserted in a full indorsement, to give the bill a subsequent negotiable quality 5. by the defendant to the plaintiff. There were in fact several intermediate indorsements between Curry and the defendant, which were omitted in the declaration, and it was contended that the plaintiff should have either declared as the immediate indorsee of the payee, or have stated all the indorsements. But Lord Ellenborough over-ruled the objection. See also Waynam v. Bend, and Critchlow v. Parry, 1 Campb. 175.

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2 Zinck v. Walker, 2 Bla. Rep. 1156.-Bolton v. Puller, 1 Bos. & Pul. 547-Haille v. Smith, id. 566.--Collins v. Martin, id. 648.— Giles v. Perkins, 9 East. 12.-Carstairs v. Bates, 3 Campb. 301. 3 Poth. pl. 22, 23, 24.

* Pots v. Recd, 6 Esp. Rep. 57. Post, 178, n. 2.-Mead v. Young, 4 T.R, 28, and see cases in next note.

5 Moore v. Manning, Com. Rep. 311.-1 Selw. 332, 4th ed. n. 46. A note was drawn by the defendant, payable to Statham or order, Statham indorsed it to Witherhead, but did not add "or to his order," Witherhead indorsed it to the plaintiff. The defendant contended that there were no express words to authorise Witherhead to assign it, he had no such power; but the whole court resolved, that

transfer.

The payee or indorsee having the absolute property IV. Mode of in the bill, and the right of disposing thereof, has the power of limiting the payment to whom he pleases'; and consequently he may make a restrictive indorsement; thus he may stop the currency of the bill, by giving a bare authority to receive the money, as by an indorsement requesting the drawee to "pay to A. for my use," "or to I. S. only," or "the within must be credited to A. B." which modes prevent a blank indorsement from being filled up by the indorsee, so as to convey any interest in the bill to himself, and

as the bill was at first assignable by Statham, as being payable to him or order, and all Statham's interest was transferred to Witherhead, and the right of assigning it was transferred also, and the plaintiff had judgment.

Acheson v. Fountain, 1 Stra. 557. Select Cases, 126. S. C. Upon a case made at nisi prius, coram Pratt, C. J. it appeared that the plaintiff had declared on an indorsement made by A. whereby he appointed the payment to be to B. or order, and upon producing the bill in evidence, it appeared to be payable to A. or order, but the indorsement was in these words, "Pay the contents to B." and therefore it was ob jected that the indorsement not being to order, did not agree with the plaintiff's declaration; but, upon consideration, the whole court were of opinion that it was well enough, that being the legal import of the indorsement, and that the plaintiff might, upon this, have indorsed it over to another, who would be the proper order of the first indorser. Edie . East India Company, 2 Burr. 1216, and 1 Bla. Rep. 295.

S. C. Where a foreign bill of exchange was drawn by A. on B. payable to C. or order, and accepted by B., and C. indorsed it to D. without adding the words, "or order," and D. afterwards indorsed it to E. who brought an action against B. the acceptor, for non-payment, evidence having been adduced at the trial, of the usage of merchants with respect to indorsements of bills payable to order, where the words, "or order," were omitted in the indorsement, which evidence was contradictory, some merchants declaring, that the omission did not make any difference, others that it restrained the negotiability of the bill, and made it payable to the indorsee only, the jury found a verdict for the defendant. On a motion for a new trial, on the ground that evidence of the usage ought not to have been allowed, that the custom of merchants was part of the law of England, and that the law of England was fully settled on this point, the court were unanimous that a new trial ought to be granted, and Lord Mansfield, C. J. said, he was clear, the evidence ought not to have been admitted, for the law was fully settled in the cases of More v. Manning, and Acheson v. Fountain, (ante, 176). The other judges concuried, and Dennison, J. said, that there was not any instance of a restrictive limitation, where a bill was originally made payable to A. or order; that he had never heard of an indorsement to A. only, and that in general the indorsement followed the nature of the thing indorsed.

Edie v. East India Company, Burr. 1218. Bayl. 49, supra.

Per Wilmot, J. in Edie v. East India Company, Burr. 1227. Bla. Rep. 299. S. C. and per Lord Hardwicke, in Snee v. Prescott, 1 Atk.

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IV. Mode of transfer.

from making a transfer of the bill, &c.; and, when made for the use of the indorser, is revocable in its nature like a power of attorney'. But an indorsement of a bill of exchange in these words," Pay the contents on the bill to A. B., being part of the consideration in a certain deed of assignment executed by the said A. B. to the indorsers and others," is not a limited indorsement 2.

pray

249. Bills and notes 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; and see Poth. pl. 89,
90.

Archer v. Bank of England, Dougl. 615, 637. A bill was drawn by the plaintiffs upon Claus Heide and Co. payable to Jens Mæstue 'or order. Mastue indorsed it to this effect, “ the within must be credited to captain M. L. Dahl, value in account, Christiana, 17th Jan. 1778, Jens Mastue," and sent it to Claus Heide and Co. who credited Dahl for the amount, and gave notice to Dahl and the plaintiffs, that they had done so; an indorsement by Dahl was afterwards forged upon the bill, and the bank discounted it. Claus Heide and Co. having become insolvent, Fulgberg paid it, for the honour of the plaintiffs, and upon the ground that the indorsement had restrained the negotiability of the bill, they brought an action for money had and received against the bank; Lord Mansfield directed a nonsuit, but upon a rule to shew cause why there should not be a new trial, and cause shewn, Lord Mansfield, Willes, and Ashhurst, Justices, thought the indorsement restrictive, and that Dahl himself could not have indorsed it, and that the plaintiffs were entitled to recover, but Buller, J. thought otherwise, upon which Lord Mansfield said, the whole turned on the question, whether the bill continued negotiable? and if they altered their opinion, they would mention the case again; but it never was mentioned afterwards, and upon a new trial, Lord Mansfield directed the jury to find for the plaintiffs, which they did.

158.

Poth. pl. 168.-Mar. 72. acc.-Beawes, pl. 219. contra.-Post,

= Potts o. Reed, 6 Esp. Rep. 57. Per Lord Ellenborough, this is not a restrictive indorsement, and as to the other words, they are surplusage, and could not affect the subsequent negotiability of the bill. If the bill was payable out of a particular fund, it would affect the negotiability of the bill, but what was here mentioned, was not the fund out of which the bill was to be paid, but the consideration for which the bill was given, which the holder had nothing to do with. Mr. Gamon, the defendant, was here personally liable, though the liability might have been created by the fund mentioned in the indorsement, as arising from the fund so designated by the indorsement; and whenever a party is personally liable, a bill is negotiable. It is, however, necessary to prove Pugh's indorsement, as his name is inentioned in the indorsement, but though so made payable to him by name, there is nothing to restrain its future negotiability; in the case cited, the bill was to be credited to Dahl's account, no such restriction or direction was here. See also Haussoulier v. Hartsink, 7 T. R. 733. S. P.

transfer.

It was once thought, that although the indorser IV. Mode of might make a restrictive indorsement, when he intended only to give a bare authority to his agent to receive payment, yet that he could not when the indorsement was intended to transfer the interest in the bill to the indorsee, by any act preclude him from assigning it over to another person, because, as it was said, the assignee purchases it for a valuable consideration, and therefore takes it with all its privileges, qualities, and advantages, the chief of which is its negotiability. It has, however, long been settled on the above principle, that any indorser may restrain the negotiability of a bill, by using express words to that effect, as by indorsing it, "payable to J. S. only;" or by indorsing it, "the within must be credited to "J.S." or by any other words clearly demonstrating his intention to make a restrictive and limited indorsement; but a mere omission in the indorsement, as leaving out the words "or order," will not in any case prevent a bill being negotiable ad infinitum3.

It is competent also to an indorser, to make only a conditional transfer of the bill, and therefore if the payee of a bill, annexes a condition to his indorsement before acceptance, the drawee, who afterwards accepts it, is bound by that condition, and if the terms of it be not performed, the property in the bill reverts to the payee, and he may recover the sum payable in an action against the acceptor.

Edie v. East India Company, Burr. 1226.

*Archer v. Bank of England, Dougl. 637. ante, 178. in note. See ante, 176. note 5.

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*Robertson v. Kensington and others, 4 Taunt. 30. Payee against the acceptors of a bill of exchange; when the bill was presented for acceptance it had the following indorsement upon it, Edinburgh, "19th November, 1808, pay the within sum to Messrs. Clark and Ross, "or order, upon my name appearing in the Gazette as ensign in any re"giment of the line, between the 1st and 64th, if within two months "from this date; P. Robertson." The bill had several subsequent indorsements, and when due, was paid by the acceptors to the holder; the plaintiff's name had never appeared in the Gazette as ensign in any regiment of the ime; the plaintiff had a verdict, subject to a case reserved for the opinion of the court. The case was afterwards argued, and for the plaintif it was contended, that it was competent

IV. Mode of transfer.

A payee or indorsec of a bill, may also make a qualified indorsement, so as to transfer the interest in the bill to the indorsee, and enable him to sue thereon, without rendering the indorser personally responsible for the payment of the bill; and this is the proper mode of indorsing a bill, where an agent indorses a bill on behalf of his principal, and it is not intended that he shall be personally liable '.

Although an indorsement may be made in blank, in full, or restrictive, yet it cannot, after acceptance, be made for less than the full sum appearing to be due upon the bill, &c. transferred, because a personal contract cannot be apportioned, and it would be making the acceptor liable to two actions, when by the contract raised by his acceptance, he intended to subject himself only to one; but when a bill has been indorsed, before acceptance, for part of the sum for which it is drawn, it has been said that the acceptor may, by his acceptance after this indorsement, become liable to two

for him, by this special indorsement, to make only a conditional transfer of the absolute interest in the bill, and the defendants, by subsequently accepting the bill, became parties to that conditional transfer; that as the condition was not performed, the transfer was defeated, and they became liable, at the expiration of two months, to pay the plaintiff, to whom the property reverted, the contents of the bill, of which none of the indorsers could enforce payment against the acceptors, because they had all received the bill, subject to the condition, and were bound thereby. The court gave judgment for the plaintiff.

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Goupy and another v. Harden and others, 7 Taunt. 160, 1. Evidence was given, that when agents indorse foreign bills, for the mere purpose of transmitting them without intending to incur responsibility for the payment, it is their practice to add to the indorsement the words, sans recours. Dallas, J. observed, the defendants might have specially indorsed this bill, sans recours, if they had thought fit so to do, but they have not done it, and therefore they are personally liable; see also ante, 36, 7. n. 4.

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The mode of making a qualified indorsement, may be thus: "I hereby indorse, assign, and transfer, my right and interest in this bill to C. D. or order, but with this express condition, that I shall not be liable to the said C. D. or any holder, for the acceptance or payment of such bill, A. B." or the form may be, as adopted in France, by the indorser writing his name, and subscribing, "without re- 1

course to me." See ante, 172, n. 6.

2

Hawkins v. Cardy, Ld. Raym. 360.-Carth, 466.-—12 Mod. 213. 1 Salk. 65. S. C.

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