&c. getting it discounted, but neglects to do so, he cannot appropriate the V. Effects bill to his own use, and maintain an action upon it against the ac- of transfer, ceptor; but if a bill be transmitted to a holder, in order that he may get the same discounted and take up another bill which is falling due, and to which he was a party, if he do not succeed in getting such bill discounted, but pays the other, he may retain the transmitted bill and sue the parties thereto, in order to reimburse himself the amount of the bill which he took up.” With respect to the liability of the party transferring a bill, it is said that a transfer by indorsement, is equivalent in its effect to the drawing of a bill, the indorser being in almost every respect considered as a new drawer on the original drawee ;9(1) on which principle it is said to have been decided, that a promissory note indorsed may be declared [ 142 ] on as a bill of exchange; and if the drawee refuse to accept, the indorser is immediately liable to be sued. A transfer by indorsement, vests in the indorsee a right of action against all the precedent parties whose names are on the bill; and after the bill has been duly indorsed by the payee in blank, it is transferrable by mere delivery, and the holder may sue all parties to the bill; but unless the payee, or the drawer, when the bill was payable to his order, has first indorsed it, a party who becomes possessed of it, can only sue the person from whom he obtained it.1 As the act of indorsing is similiar to that of drawing, the obligation which it imposes on the indorser to the indorsee, and the mode in which that obligation may be extinguished, by the holder's laches or otherwise, is in all cases exactly similar to that which a drawer of a bill is under to the payee ; for, as observed by Lord Eilenborough, C. J., when it is laid down, that an indorser stands in all respects in the same situation as a drawer, all the consequences follow Delaney v. Mitchell, 1 Stark. 439. Walsh v. Tyler, Sittings at Guildhall, in K. B. corum Lord Ellenborough, after Michaelmas Term, 1817. Declaration on a bill of exchange, dated 18th March, 1817, for 50%, payable three months after date, drawn by John Shaw on the defendant Tyler, and indorsed by him to the plaintiff. The defence was, that Shaw the drawer, sent the bill to the plaintiff to be discounted, and with a request to send up the amount to Shaw, in order that he might take up a bill for 771. 10s. then falling due and that the plaintiff did not send up the money; and afterwards the bill for 777. 10s. having been returned to and paid by him, he proved the amount under Shaw's commission. Per Lord Ellenborough, This affords no defence. If the produce of the bill was to have been applied for another purpose, then the plaintiff had no right to retain the bill or sustain this action; but the plaintiff being unable to discount the bill, and having been compelled to pay that to which he was a party, he had a right to 4 Smallwood v. Vernon, 1 Stra. 479.- Brown v. Harraden, 4 T. R. 149, cites Ballingalls v. Gloster, 3 East, 481. Anon. Ld. Raym. 738. Miller v. Race, "Ibid. Lambert v. Oakes, Holt, 117. (1) The indorsement of a note to the maker is an extinguishment of it, and it cannot be recovered by his indorsing it to a third person or to the original payee, but such indorsement might create a new obligation in the indorser. Long v. Bank of Cinthiana, Litt. 290. &c. V. Effect which are attached to the situation of the latter. The indorser, howof transfer, ever, is not under any liability in any instance to the acceptor, unless indeed in the case of an acceptance for his honour. An indorsement also imposes the same obligation on the person making it, although the bill contain no words rendering it assignable. And we have seen, that if an agent indorse in his own name without qualifying his indorsement, he will be personally tiable even to his principal.a A transfer by delivery, without any indorsement, when made on account of a pre-existing debt, or for a valuable consideration passing to the assignor at the time of the assignment, (and not merely by way of exchange of paper) as where goods are sold to him, imposes an [143] obligation on the person making it to the person in whose favour it is made, similar to that of a transfer by indorsement; a distinction was indeed once taken between the transfer of a bill or check for a prece dent debt, and for a debt arising at the time of the transfer, and it was held, that if A. bought goods of B., and at the same time gave him a draft on a banker, which B. took without any objection, it would amount to payment by A., and B. could not resort to him in the event of the failure of the banker. But it is now settled, that in such case, unless it was expressly agreed at the time of the transfer, that the assignee should take the instrument assigned, as payment, and run the risk of its being paid, he may, in case of default of payment by the drawee, maintain an action against the assignor, on the consideration of the transfer. And, where a debtor in payment of goods gives an order to pay the bearer the amount in bills on London, and the party takes bills for the amount, he will not, unless guilty of laches, discharge the original debtor. And where a person gets a bank note, navy * Ballingalls v. Gloster, 3 East, 483– Starey v Barnes, 7 East, 435. y Poth. pl. 111, 112. Hill v. Lewis 1 Salk. 132. Edie v. Hill v. Lewis, 1 Salk. 132. Moore drew able to the indorsee. ■ Ante, 27. b Hornblower v. Proud, 2 B. & A. 327. • Owenson v. Morse, 7 T. R. 64. Ward v. Evans, Ld. Raym. 928. Lambert v. Oakes, 12 Mod. 244. Anon. id. 408. Puckford v. Maxwell 6 T. R. 52. d Ward v. Evans, Ld. Raym. 928.Anon. 12 Mod. 408. Ward v. Sir Peter bill, Evans, id. 521. Moor v. Warren, and e Clerk v Mundall, 12 Mod 203. 1 Salk. 124. 3 Salk. 68. S. C. Anon. id. 408. Anon. id. 517. Anon. Holt, 298, 9. et post. Vin. Abr. tit. Payment, A. Cooke's Bank. Law, 173. Owenson v. Morse, 7 T. R. 65, 66.Popley v. Ashley, Holt, 122, ante, 97 to 100. 8 Ex parte Dixon, cited in 6 T. R. 142, 3; and ante, 96, 7, &c. Ex parte Blackburne, 10 Ves. 204. 1 Mont. 142, 149, 150. acc. Vernon v. Roverie, 2 Show. 296. Bolton v. Reichard, 1 Esp. Rep. 106. contra. Owenson v. Morse, 7 T. R. 64. The plaintiff bought some plate of the defendant, and gave him some country bank. notes in payment; the notes were dishonoured, on which the defendant refused to deliver the plate. The plaintiff brought trover and insisted that the notes were payment, but on a case reserved, the court held that they were no payment unless the defendant had agreed to take them as payment, and run the risk of their being paid. Nonsuit entered. See also Tapley v. Martens, 8 T. R. 451. Ex parte Blackburne, 10 Ves. 204.Goods sold, to be paid for by bills at three &c. or other bill or note discounted, without indorsing it, and it turns out V. Effect to be forged, he is liable to refund the money to the party from whom of transfer, he received it." And though a party do not indorse a bill or note, yet he may by a collateral guarantee or undertaking, become personally liable.' months. The drawers and acceptors becoming bankrupts before the bills were due, the vendors having received dividends under their commissions, entitled to prove under a commission against the vendees who had not indorsed the bills, the deficiency as a debt: till that shall be ascertained a claim and dividend reserved for the whole. The Lord Chancellor said, I take it to be now clearly settled, that if there is an antecedent debt, and a bill is taken without taking an indorsement, which bill turns out to be bad, the demand for the antecedent debt may be resorted to. It has been held, that if there is no antecedent debt, and A. carries a bill to B. to be dis counted, and B. does not take A's. name upon the bill, if it is dishonoured there is no demand, for there was no relation between the parties except that transaction, and the circumstance of not taking the name upon the bill, is evidence of a purchase of the bill. In a sale of goods the law implies a contract that those goods shall be paid for. It is competent to the party to agree that the payment shall be by a particular bill. In this instance it would be extremely difficult to persuade a jury, under the direction of a judge to say an agreement to pay by bills, was satisfied by giving bills, whether good or bad. The bills were only a mode of paying the debt of 30007. If they are not paid, the original debt, arising out of the contract for goods sold and delivered, remains. It is clear, the creditor still holding the bills, cannot resort to that original contract. In general cases, where the bill is not paid, if there is ao bankruptcy, the creditor must come immediately upon the bill dishonoured, saying, he cannot procure payment, and desiring to have payment; and then he might maintain an action for goods sold and delivered. There may be cases in which he may have received part of the money without involving the difficulty from giving time as to the rest of it; as, if part was paid before it was due; in that case, if no time was given for payment of the residue, an action for goods sold and delivered would lie for the residue. Jones and another v. Ryde and another, I Marsh. 157, 9. 5 Taunt. 488. S. C. Assumpsit for 10007. for money had and received; at the trial the plaintiffs had a verdict, subject to the opinion of the court, on the following case: The defendants, bill brokers, were possessed of a navy bill, purporting to be for 18841. 16s 10d. which the plaintiffs, also bill brokers, discounted for them at their request. The plaintiffs afterwards discounted it with Mr. Williams, who presented it for payment. The date and sum in the bill had been altered since it was issued, and before it came to the hands of the defendants, the bill being originally issued for 8841. 168. 10d. only. Williams received 8847. 168. 10d. from the transport-office, and the plaintiffs repaid him the 10007., and brought the present action. The court, after argument, held, that the plaintiffs were entitled to recover, and although the defendants could not be sued as indorsers (the instrument being transferrable by delivery) they were not released from the responsibility they incurred by passing an instrument which purported to be of greater value than it really was. And per Gibbs, C. J. The ground of resisting this claim is, that it was a negotiable security, without indorsement; and that when the holder of a negotiable security passes it away without indorsing it, he means not to be responsible upon it. This doctrine was fully discussed in the case of Fenn v. Harrison, 3 T. R. 757, and the proposition is true, but only to a certain extent. If a man pass an instrument of this kind without indorsing it, he cannot be sued as indorser, but he is not released from the responsibility which he incurs,, by passing an instrument which purports to be of greater value than it really is. This question must often have occurred in the case of bank notes: I believe it is not disputed, but that if a man take a forged note, he is entitled to recover the amount of it from the person of whom he received it; and I cannot distinguish this from the case of a promissory note; for though one should not be answerable on the note as party to it, one should be liable for the money which had been paid on the supposition of its being worth so much. Mr. Justice Chambre. There can be no doubt in this case: the general principle is perfectly clear, that where money has been paid without a consideration, it is to be recovered back. It would be very mischievous if the doctrine contended for by the defendants could be supported, as it would very materially affect the credit of these instruments. The person who takes them, gives credit to the person who passes them to him for the amount, and if they fail, the money must be refunded. In this case, the plaintiffs, or at least Williams, who stood in their place, have done nothing but what was for the advantage of the defendants. Morris v. Stacey, Holt C. N. P. 153. A., an agent for some manufactures, sells to B., who likewise acted as an agent, a quantity of shoes, and receives certain bills of exchange in payment. B., being press &c. V. Effect But, as on transfer by delivery, the assignor's name is not on the of transfer, instrument, there is no privity of contract between him and any assignee, becoming such after the assignment by himself, and consequently no person but his immediate assignee can maintain an action against him, and that only on the original consideration, and not on the bill itself. And if only one of several partners indorse his name on a bill, and get it discounted with a banker, the latter cannot sue the firm, though the proceeds of the bill were carried to the partnership ac count.1 When a transfer by delivery without indorsement, is made merely by way of sale of the bill, as sometimes occurs; or exchange of it for other bill," or by way of discount and not as a security for money lent, [146] or where the assignee expressly agrees to take it in payment, and to run all risks ; he has in general no right of action whatever against the ed to indorse them, refuses, but writes a letter to A., in which he encloses the bills, and adds, "that should they not be honoured when due, he (B.) would see them paid." Held, that this was a sufficient agreement within the 4th section of the statute against frauds to bind B. to pay for the goods in default of his principal. k Ward v. Evans, Ld Raym 928. In the matter of Barrington, 2 Sch. & Lef. 112. In the matter of Barrington and Burton, bankrupts, 2 Sch. & Lef. Rep. 112. B. hands over a negotiable note for valuable consideration to G., not indorsing it, but giving a written acknowledgment on a separate paper, to be accountable for the note to G G. indorses the note, which, together with the written acknowledgment, comes into the hands of M. for a valuable consideration, and B. and the several parties to the note, become bankrupts; M. cannot prove the note against the estate of B., the written acknowledgment not being assignable but is entitled to have the amount made an item in the account between B. and G., and to stand in the place of the latter. The Lord Chancellor. This undertaking, though for valuable consideration, was not assignable with the note, nor can it give the holder of the note, to whom it was transferred, a right to prove under it against the estate of Barrington and Burton; the note does not make them debtors. They are indeed chargeable on the ground of their undertaking in account with Gray and Son, but you can make yourselves creditors to the bankrupt's estate, only by your equitable right to stand in the place of Gray and Son. To this end an account must first of all be taken, to see whether the bankrupt's estate is debtor to Gray and Son; and the most proper course would have been to petition that the assignees of Gray and Son might prove for your benefit on the estate of Barrington and Burton; if there shall appear to be a sufficient balance due by them to Gray and Son, you will be entitled to be paid 3007. out of that balance. But this under taking does not make you creditors on the estate of Burton and Barrington. It only gives you a right to have it made an item in the account between them and Gray and Son. Emly v. Lye, 15 East, 7. m Fenn v. Harrison, 3 T. R. 757 Fydell v. Clark, 1 Esp Rep. 447. Bank v. Newman, 1 Ld. Raym. 422. 12 Mod. 241; and Comyns, 57, S. C. 1 Mont. 142. 149, 150. Ex parte Shuttleworth, 3 Ves. 368. Cullen, 100, 1. ☐ Hornblower v. Proud, 2 B. & A. 327. Fenn v. Harrison, 3 T. R. 759. Ex parte Shuttleworth, 3 Ves. 368. Fydell v. Clark and another, 1 Esp. Rep. 447. In Fenn v. Harrison, 3 T. R. 759, Lord Kenyon said, It is extremely clear, that if the holder of a bill send it to market without indorsing, his name upon it, neither morality, nor the laws of this country, will compel him to refund the money for which he sold it, if he did not know at the time that it was not a good bill. If he knew the bill to be bad, it would be like sending out a counter into circulation to impose upon the world, instead of the current coin. In this case, if the defendant had known the bill to be bad, there is no doubt that they would have been obliged to refund the money. Ex parte Shuttleworth, 3 Ves. '368.— Newton gave the bank upt before his bankruptcy cash for a bill, but refused to allow the bankrupt to indorse it, thinking the bill better without his name. He now proved the amount under the commission, and on a petition to have the bill expunged, the Chancellor granted the petition, observing, that this was a sale of the bill. Fydell v. Clark and another, 1 Esp. 447. Where bankers, in discounting a bill, give their customers bills or notes without indorsing them, which turn out to be bad, the bankers are not liable. S. P. Bank of England v. Newman, 1 Lord Raym. 442. Emly v. Lye, 15 East, 7. 12. POwenson v. Morse, 7 T. R. 65, 6; ante, 143. Cooke's Bank. Law, 120. Ex parte Shuttleworth, 3 Ves. 368. Ex parte Black assignor, in case the bill turns out to be of no value. But there can be V. Effect no doubt, that if a man assign a bill for any sufficient consideration, of transfer, knowing it to be of no value, and the assignee be not aware of the fact, the former would, in all cases, be compellable to repay the money he had received.9 The obligation of the assignor, though it is in general irrevocable, may, as has been already observed, be discharged or released by the act of the holder, in the same manner as the obligation of the drawer;' it may also be discharged by payment of the bill by any prior party; but the merely taking another party in execution, will only discharge that person, and will not operate in favour of any other."(189) &c. If a party indorse a bill for the accommodation of the drawer, which Indemnity is also accepted by a third person for the like accommodation, such of indorser. indorser may, after he has been compelled to pay the bill, support an action thereon against the acceptor, or may prove under his commission, in case of his bankruptcy." And such an accommodation indorser, in case there be reasonable ground to apprehend the insolvency of his [ 147 ] principal, has an equitable right to withhold the payment of any money which we owe to hun, until he has been indemnified against any liability on account of his indorsement, though such liability would be no defence at law to an action by the principal. * burne, 10 Ves. 206. 15 East, 13. 1 Mont. 142. 149, 150. Emly v. Lye, 15 East, 13. Per Bayley, J. If a person buy goods of another, who agrees to receive a certain bill in payment, the buyer's name not being on it, and that bill be afterwards dishonoured, the person who took it cannot recover the price of his goods from the buyer, for the bill is considered as a satisfaction. It has been so held, and I can see no difference where money, instead of goods, is given for the bill; and per Kenyon, C J. in Owenson v. Morse, 7T. R. 66. See the cases, ante, 143 to 144, in notes. 9 Anon. 12 Mod. 517. Fenn v. Harrison, 3 T. R. 759. Popley v. Ashley, Holt, 121. Bayl. 167, 8. Synderbottom v. Smith, Stra. 649.Gee v. Brown, id. 792. Ante, 107. Hull v. Pitfield, 1 Wils. 46. Hayling v. Mullhall, 2 Bla. Rep. 1235. Macdonald v. Bovington, 4 T. R. 825. Claxton v. Swift, 2 Show. 481. et post. Houle v. Baxter, 3 East, 177. The defendant, a retail silversmith, procured goods of Capper, a working silversmith, * Wilkins v. Casey, 7 T. R. 711. as ob- (189) If the indorsee after taking the maker in execution, take of him a bond or warrant of attorney to confess judgment, in satisfaction of the execution, this discharges all the other parties. M'Fadden v. Parker, 4 Dall. Rep. 275. The discharge of one joint promisor under an insolvent act will not operate as a release of the other. Tooke v. Bennett, 3 Caines' Rep. 4. The holder's proceedings under a commission of bankruptcy against the acceptor of a bill, will not discharge the responsibility of the antecedent parties. Kenworthy v. Hopkins, 1 John. Cas. 107. Post. 362. A suit may lie by an indorser against his indorsee upon a special guaranty. 4 Yeates' CHITTY ON BILLS. |