IV. Modes

Such being the effect of a first indorsement in blank, it has been obof transfer. served, 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 bona 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 bona fide for a valuable consideration."

Special in full.

or

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, it is said, 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 indorsement of A. B. only though afterwards, if A. B. make a blank indorsement, it is transferrable by delivery as well as by indorsement. In this case, however, a delivery of the bill to the indorsee, or some person on his behalf, is essential to the transfer. 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." (176)

the plaintiffs; the plaintiff struck out all
the indorsements except the first, which
continued in blank This was an action
against the acceptor, and it was objected
that the plaintiffs could not recover, with-
out an indorsement by Jackson, but Lord
Kenyon held otherwise, and the plaintiffs
recovered. The plaintiffs afterwards
proved that Jackson desired Muir and
Atkinson to discount this bill, but Lord
Kenyon thought the plaintiff's case made
out without this evidence.

Chaters v. Bell, 4 Esp. Rep. 120. The
declaration stated that a bill was drawn
payable to Curry, by him indorsed to de-
fendant, and by the defendant to the
plaintiff. There were in fact several in
termediate indorsements between Curry
and the defendant, which were omitted in
the declaration, and it was contended, that
the plaintiff should have either declared

• Zinck v. Walker, 2 Bla. Rep. 1156. Bolton v. Puller, 1 Bos. & Pul. 547. Haille v. Smith, id. 566. Collins v. Marrin, id. 648. Giles v Perkins, 9 East, 12. Carstairs v. Bates, 3 Campb. 301. Treuttel v. Barandon, 8 Taunt. 100, and see post. tit. Bankruptcy.

P Poth. pl, 22, 23, 24.

9 Potts v. Reed, 6 Esp Rep. 57. Post, 138, note. Mead v. Young, 4 T. R. 28, and see the cases in the next note but

one

The King v. Lambton, 5 Price, 428. • Moore v. Manning, Com. Rep. SIL 1 Selw. 332. 4th ed. n. 46. A note was

And the right to strike out a special as well as a general indorsement on a note has been recognized in Pennsylvania. Morris v. Foreman, 1 Dall. Rep. 193. and see Thompson v. Robertson, 4 John. Rep. 27.

Where a bill is indorsed and sent to an agent to collect, although the indorsement be general, yet the principal may at any time countermand the authority, and thereby prevent the agent from a recovery against the acceptor. Barker v. Prentiss, 6 Mass. Rep. 430. But it will be otherwise if the agent has a lien. Ibid.

Where the holder of a note indorsed in blank fills up the blank by directing payment to be made to another merely for collection, and the agent returns the note unpaid to the holder, he may strike out the transfer and make the note payable to himself. Bank of Utica v. Smith. 18 Johns. 230.

(176) The same doctrines have been recognized in the United States. A negotiable note indorsed in blank, or by a direction to pay the contents to A., omitting the words" or order," is further negotiable by the holder under such indorsement, but an indorsement "pay the contents to my use," or " to the use of a third person," or "carry this this bill to the credit of a third person," is not an assignment of the security, but is only an authority to pay the money agreeably to the direction of the indorsement. But as to an indorsement" pay the contents to A. B. only," whether it is only an authority to A. B. to receive

The payee or indorsee having the absolute property in the bill, and the IV. Modes right of disposing thereof, has the power of limiting the payment to whom of transfer. he pleases; and consequently he may make a restrictive indorsement;

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 authorize Witherhead to assign it, he had no such power; but the whole court resolved, that 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 objected 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 v. 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 ac

cepted by B. and C. indorsed it to D. with-
out 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 de-
claring, that the omission did not make any
difference, others that it restrained the ne-
gotiability of the bill, and made it payable
to the indorsee only, the jury found a ver-
dict 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 omitted, for the
law was fully settled in the cases of Moore
v. Manning, and Acheson v. Fountain.
(ante, 136.) The other Judges concurred,
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 ge
neral the indorsement followed the nature
of the thing indorsed.

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

the money for the use of the indorser or for his own use, if made for value received, or
whether in this last case the restriction is not void, and A. B. may further negotiate it,
seems not to be settled. If the property be vested in A. B. perhaps he will hold it with
its negotiable quality notwithstanding the restriction. Per curiam. Rice v. Stearns. 3
Mass. Rep. 225. Wilson v. Holmes, 5 Mass. Rep. 543. But an indorsement "to pay
to A. or order at his own risk," does not restrain the negotiability of the note. Ibid.
Russell v. Ball, 2 John. Rep. 50. Nor an indorsement "We assign this note to A. B.
without recourse.'
." Wilson v. Codman's Executors, 3 Cranch, 193. Barker v. Prentiss,
6 Mass. Bep. 430.

Where the payee of a bill indorsed on it "should the within exchange not be accepted and paid agreeably to its contents, I hereby engage to pay the holder in addition to the principal 20 per cent damages," it was held that a bona fide holder might insert above such stipulation, a direction to pay the contents to his order for the value received, for the indorsement was to be considered as general. Blakeley v. Grant, 6 Mass. Rep. 386. But where the payee of a negotiable note payable in six months, indorsed on it "I guarantee the payment of the within note in 18 months, if it cannot be collected of the promissor before that time;" it was held that no person could entitle himself as holder to maintain an action on the guaranty, except the original party to the guaranty, or a person claiming with the subsequent privity and assent of the payee. It seems to have been the opinion of the court that even admitting that the indorsement was a transfer of the note, yet it did not make the guaranty negotiable. Tyler v. Binney, 7 Mass. Rep. 479. See also Williams v. Granger, 4 Day's Rep. 444.

The indorsement of a promissory note to A. B. or order, for value received, transfers the legal title in the note to the indorsee, which cannot be divested, except by cancelling the indorsement, or indorsing it again. Burdick v. Green, 15 Johns. Rep. 247. S

CHITTY ON BILLS.

IV. Modes thus he may stop the currency of the bill, by giving a bare authority to of transfer. 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," [138] and 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.

It was once thought, that although the indorser might make a restric tive 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 IV. Modes indorsement, as leaving out the words "or order," will not in any case of transfer. prevent a bill being negotiable ad infinitum.

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 [139] may recover the sum payable in an action against the acceptor.

A payee or indorsee 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."

e

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 actions; and when the drawer of a[140] bill has paid part, it may be indorsed over for the residue.s

See ante, 136, note.

• 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. Clarke and Ross, or order, upon my name appearing in the Gazette as ensign in any regiment 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 line; the plaintiff had a verdict, subject to a case reserved for the opinion of the court. The case was afterwards argued, and for the plaintiff it was contended, that it was competent 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.

d Goupy and another v. Harden and
others, 7 Taunt. 150, 1. Evidence was
given, that when agents indorse foreign
bills, for the mere purpose of transmitting
them, without intending to incur responsi-
bility for the payment, it is their practice to
add to the indorsement the words, "sans
recours." Dallas, J observed, the defen-
dants 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, 27, n.

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 recourse to me." See ante, 133, n.

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

f Beawes, pl. 286. Sed quære supra,
last note.

Johnson v. Kennion, 2 Wils. 262.
Hawkins v. Cardy, 1 Salk. 65. Ld. Raynı

Upon a transfer, whether by indorsement or bare delivery, the bill of transfer should be delivered to the assignee; and in all cases of a transfer of a bill drawn in sets, each part should be delivered to the person in whose favour the transfer is made, otherwise, the same inconveniencies may follow, which we have seen may arise upon a neglect to deliver each of them to the payee. A delivery, however, is not essential to vest the legal right in the payee or indorsee, and it need not be alleged in pleading; and if, after acceptance, the acceptor should improperly detain the bill in his hands, the drawer might nevertheless sue him on it, and give him notice to produce the bill, and in default of production, give parol evidence of its contents. It is not necessary for the holder to give any notice to the acceptor of the indorsements, nor need such notice be averred in pleading.

V. The f The nature of a transfer of a bill, note, or check, the right which it fect of a vests in the assignee, and the obligation which it imposes on the person & the right making it, may, in a great measure, be collected from what has been it previously said.

transfer;

which

vests in the

and the ob

assignee; With respect to the right of such assignee, whether by indorsement ligation or delivery, he has such an interest in the bill or note that he may effect which it im- a policy of insurance to secure the due payment; and though he has poses on no direct legal or equitable lien upon property deposited by the drawer the person with the acceptor to cover the liability of the latter, in respect of his making it; and how acceptance; yet, on the bankruptcy of the drawer and acceptor, the that obliga-arrangement of the property between the two estates, may indirectly tion may be render such an equity available." If the holder is a debtor to either of discharged, the parties to a bill, who he expects will become a bankrupt, it is most [141 advisable for him not to negotiate such bill, because if he be the holder

at the time of the bankruptcy, he may set off the amount of the bill against the claim of the assignees upon him for the amount of his debt, whereas, if he be not the holder at the time of the act of bankruptcy, he cannot set off the amount, but must pay the. whole of his own debt to the assignees, and when the bill has been returned to him, can only prove and receive a dividend upon the same." We have already seen, that a person who receives a bill, with notice that it is to be negotiated only upon certain terms, holds the bill subject to such terms, and therefore where A., a creditor of B., having deeds in his possession as a security for the debt, received a bill indorsed by B. for the purpose of

360. Carth. 466. 12 Mod. 213. S. C. Cal-
low v. Lawrence, 3 M, & S. 95.

Hawkins v. Cardy, Ld. Raym. 360.
Carth. 466. 12 Mod. 213. Salk. 65. In
an action upon a bill drawn by the defen-
dant for 467. 19s. payable to Blackman or
order, the declaration stated that Black-
man indorsed 431. 4s. of it to the plaintiff;
the defendant pleaded an insufficient plea,
upon which the plaintiff demurred, but the
whole court held the declaration bad, be-
cause the bill could not be indorsed for
less than all the money due thereon, and
the plaintiff discontinued his action; and
per Gould, J. in Johnson v. Kennison,
2 Wils. 262. where the drawer of a bill
has paid part, you may indorse it over for
the residue, otherwise not, because it would
subject him to a variety of actions.

Ante, 106, 7. Bayl 68.

i Churchill v. Gardner, 7 T. R. 596. Smith v. McClure, 5 East, 476 2 Smith's Rep. 443, S. C.; but see ante, 131, a.

Churchill v. Gardner, 6 T. R. 596. In an action by the payee of a bill, against the acceptor, the declaration stated, that the drawer made his certain bill of exchange, but there was no allegation that he delivered it to the plaintiff and the defendant demurred specially for that cause; but the court was clearly of opinion, that there was no foundation for the objection; the delivery of the bill to the plaintiff being sufficiently implied in the allegation, that the drawer "made" the bill.

Reynolds v. Davis, 1 Bos. & Pul. 625,
Tasker v. Scott, 6 Taunt. 234.
m Ex parte Waring, 2 Rose, 182.
Post tit. Bankruptcy.