authority cannot bind principal by bill.

How an agent should sign.

Aliens.

purpose, has no authority to bind the principal by bills or notes. So an agent deputed to superintend a mine, and the local concerns thereof, would not be authorised to accept bills in the name of the company even for necessary purposes of the mine (a). So a power of attorney giving the agent full powers as to the management of a certain real property and authorising him to do all lawful acts concerning the principal's business, does not authorise the agent to indorse bills of exchange in the name of the principal (b). So the secretary of a company has no general authority to accept bills and notes in their names (c).

That an agent may not contract a personal liability on the bill or note he must sign it in the name of the principal.

A man who puts his name to a bill 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 (d). The proper mode of signing per procuration is either to use the name of the principal only or to sign A. B. (the principal) by or by the procuration of C. D. the agent (e). The acceptance or indorsement of a bill expressed to be "per procuration is a notice to the indorsee that the party so accepting or indorsing professes to act under an authority from some principal, and imposes upon the payee or indorsee the duty of ascertaining that the party so accepting or indorsing is acting within the terms of such authority (ƒ).

An agent signing on behalf of a company trading with limited liability, must add the word "limited" after the name of the company, in default of which he becomes liable to a penalty of £50, and personally liable for the amount of the bill unless the same is duly paid by the company (g).

An alien enemy could not acquire in a transfer a valid right by bill or note. But though the right of an alien enemy during war to sue on a bill or note is suspended, it would revive on the restoration of peace (h). An alien friend has the same right

(a) Brown v. Byers, 16 M. & W. 252.

(b) 1 Y. & C. 394.

(c) Neale v. Turton, 4 Bing. 149;
Nichols v. Diamond, 9 Exch. 154.
(d) Leadbitter v. Farrow, 5 M. & S.
349.

(e) Davidson v. Stanley, 2 M. & G.

721; Mare v. Charles, 5 E. & B. 978.

(f) Alexander v. Mackenzie, 6 C. B. 766; Stagg v. Elliott, 31 L. J. N. S. C. P. 260.

(g) Penrose v. Martyn, 28 L. J. Q. B. 28; 19 & 20 Vict. c. 47, s. 31. (h) Duhammel v. Pickering, 2 Stark.

90.

to make, accept, draw, or indorse a bill or note as a native-born

subject.

A neutral may enforce the payment of bills and notes though Neutrals. given to him in an enemy's country (a).

Persons in holy orders may be parties to bills and notes, Ecclesiastics. though they are prohibited from trading (b).

A bill or note drawn, made, or indorsed by an imbecile or a Imbeciles. lunatic, or by a person in a complete state of intoxication, can not be enforced (c).

FOREIGN LAWS.

non-traders

France. All persons legally competent to contract may be Bills signed by parties to a bill of exchange. Bills of exchange signed by mar- are equivalent ried women, and by single women who are not traders, have no other force than as simple promises. Bills signed by minors not traders, are void as against them (d).

to simple promises.

sponsibility

Who may be parties to

Germany. Everyone who can bind himself by contract may Extent of rebe a party to a bill of exchange. The obligee of a bill is respon- contracted by sible in his person and property for the fulfilment of his obli- bills. gation, though there are exceptions in different States, upon the liability of various classes of persons to imprisonment for debt (e). Russia.-Every person who is not legally disqualified to contract may bind himself by bills. Married females, and women bills. not separated from their parents, cannot bind themselves by bills without the permission of their husband or of their parents. The parties authorised by law to engage in bills are merchants of the three classes, gentlemen registered in the corporation or guild of merchants, foreign merchants, burgesses, or foreigners belonging to guilds of different crafts in the metropolis, and peasants trading under a patent (ƒ).

non-traders.

Spain. Where neither the drawer, acceptor, or indorsee of a Bills issued by bill of exchange is a merchant, the obligation contracted is governed only by the civil law, and the parties are under the jurisdiction of the civil tribunals. If, however, it be proved that

(a) Houriet v. Morris, 3 Camp. 303. (b) Hankey v. Jones, Cowp. 745; Ex parte Meymot, 1 Atk. 196; 57 Geo. 3, c. 59; 1 & 2 Vict. c. 106, s. 29.

(c) Alcock v. Alcock, 3 M. & G. 268; Molton v. Camroux, 4 Exch. 17;

eavan v. M'Donnell, 9 Exch. 309; Campbell v. Hooper, 24 L. J. Ch. 644. (d) French Code de Commerce, $$ 113, 114.

(e) German Law on Bills of Exchange, §§ 1, 2.

(f) Russian Code, § 299.

the bill was given for a commercial operation, then whoever of the parties is a merchant will be bound to pay according to the requirement of commercial law. A party who signs a bill as the attorney of the drawer, the acceptor, or of an indorsee ought to express that he signs it in that capacity above his signature, and prove his authority (a).

Bills payable to order or bearer are transferable.

The transfer

by indorse

ment or by simple delivery.

SECTION VIII.

BRITISH LAW.

INDORSEMENT.

All bills or notes payable to the order of the payee, or to bearer, are transferable by indorsement and delivery (b). But bills and notes not containing a direction or promise to pay to the order of the payee or bearer are in England and Ireland not transferable, so as to give to the assignee a right of action thereon, though if the words of transfer are omitted by mistake they may be supplied. In Scotland, however, bills or notes so made, without the words "or order," are transferable (c). A promissory note payable to the maker's own order is not a negotiable instrument, but when a note in that form is indorsed in blank, and put in circulation by the maker, it becomes in effect a note payable to bearer (d).

A bill or note may be transferred by indorsement in full or in may be made blank, by restrictive or conditional indorsement, or by simple delivery without indorsement. An indorsement in full is where the bill is transferred to a given person or his order; an indorsement in blank is where the signature of the payee only is put on the back, or on any part of the bill or note. By an indorsement in blank, the property in the bill passes as effectually as by an indorsement in full, and where a bill is so indorsed it is committed to the holder to hand it over to a third person to sue upon it in his behalf (e).

(a) Spanish Code of Commerce, §§ 434, 435.

(b) 3 & 4 Anne, c. 9; 7 Anne, c. 25. (c) Plimley v. Westley, 2 Bing. N. C. 249; Smith v. Kendall, 6 T. R. 123; Grant v. Vaughan, 3 Burr. 1516;

Chrichton v. Gibson, Jan. 1726, 1
Ross, Lead. Cases.

(d) Brown v. De Winton, 6 C. B. 336; Absolom v. Marks, 11 Q. B. 19; Flight v. Maclean, 16 M. & W. 51.

(e) Law v. Parnell, 7 C. B. N. S. 282.

The negotiability of a bill or note may be restrained by a special indorsement in favour of a particular person, or for a special purpose, and if so restricted all subsequent holders are bound by the restriction (a). The restricted indorsee may sign the bill or note, but he would only give the subsequent indorsee a right of action for the benefit of the restraining indorser (b). Where a bill or note is, however, originally made payable to order or bearer, an exclusive indorsement, or an indorsement without the words or order" would not restrain its negotiability (c). So where the bill or note has been indorsed in blank, its negotiability cannot be restrained by a special indorsement (d).

The negotiability of a bill

may be re

strained.

But if made order or payable to

bearer, nego

tiability cannot be re

strained.

There is no valid transfer without the delivery of the Delivery neinstrument (e).

in

No special words are requisite for an indorsement. The signature of the payee any part of the bill or note will constitute an indorsement (f). The indorsement may be made either on the back or on the face of the bill or note, and even on a separate paper attached to the bill or note. A bill or note may be indorsed in ink or in pencil (g) by the payee, or indorsee's own signature, or by his mark, if he cannot write (h). An indorsement of a bill or note of twenty shillings and under must have the date and the name of the indorser attested by one witness (i).

A bill or note is usually indorsed after acceptance, and before payment, and is negotiable ad infinitum until it has been paid or discharged on behalf of the acceptor (k). The indorsement may be made even before the bill or note is complete, or even before the bill is accepted, except in the case of bills or notes of less than £5 (1).

Where a bill is indorsed after acceptance has been refused,

(a) Ancher v. The Bank of England, 2 Doug. 637; Treuttel v. Barandon, 8 Taunt. 100; Sigourney v. Lloyd, 8 B. & C. 622.

(b) Murrow v. Stewart, 8 Moore, P. C. 267.

(c) Edie v. The East India Company, 2 Burr. 1216.

(d) Walker v. Macdonald, 2 Exch. 331; Smith v. Clarke, 1 Esp. 180.

(e) Cox v. Troy, 5 B. & Ald. 474; Bromage v. Lloyd, 1 Exch. 32; Sains

VOL. I.

bury v. Parkinson, 18 L. T. 198, C. B. ;
Young v. Glover, 21 Jur. 637, C. B.;
Rex v. Lampton, 5 Price, 428.

(f) Peacock v. Rhodes, Doug. 633.
(g) Geary v. Physic, 5 B. & C.
234.

(h) George v. Surrey, M. & M. 516.
(i) 17 Geo. 3, c. 30; 27 Geo. 3, c. 76.
(k) Allen v. Lawrence, 3 M. & S. 95 ;
Hubbard v. Jackson, 4 Bing. 390.

(1) Russell v. Langstaffe, 2 Doug. 514; 17 Geo. 3, c. 30, s. 1.

Сс

cessary to complete the

transfer. indorsement.

Form of the

When inmay be made.

dorsement

after refusal of

Indorsement but before it is due, the party taking it, without notice of any acceptance. suspicious circumstances and malá fide, would not be affected by the taker, but if he had notice of the dishonour he could not recover (a). A bill or note may be transferred even after it has become due, in which case the indorsement is held to be equivalent to the drawing of a bill payable at sight (b).

Indorsement

after ma

turity.

Right of the indorsee in such a case.

Who may in. dorse.

Where, however, the bill or note is indorsed after maturity, the indorsee will be held to have taken it subject to all the defences which could have been made by any previous holder. After a bill or note is due it comes disgraced to the indorsee, and it is his duty to make inquiries concerning it. If he takes it, though he gives full consideration for it, he takes it on the credit of the indorser, and subject to the equities with which it may be encumbered, those equities, however, which affect the bill itself, and not any collateral claims existing between the collateral parties to it (c). Thus the want of consideration between the original parties would not be such equity as will bar the indorsee from maintaining an action on a bill or note (d).

The indorsee is in all respects put in the place of the indorser, and if the person who indorsed the bill or note could himself have maintained an action on it, so could the indorsee notwithstanding the bill was indorsed after it became due (e). Once however, the bill or note has been paid it can no longer be transferred, so as to render any of the parties liable who would otherwise be discharged (ƒ).

Whoever has the absolute property in a bill or note made payable to himself, or to his order, may assign it as he pleases, and thereby transfer the right to the assignee to maintain an action thereon (g). The right to transfer would be acquired by a person having a legal interest in the bill or note, even although

(a) O'Keef v. Dunn, 6 Taunt. 335; 5 M. & S. 282; Goodman v. Hervey, 4 A. & E. 870; Crossley v. Ham, 13 East, 498; Brown v. Davis, 3 T. R. 80; Raphael v. The Bank of England, 17 C. B. 161.

(b) Mitford v. Walest, 1 Ld. Raym. 575; Dehers v. Harriott, 1 Show. 163; Bohem v. Stirling, 7 T.R. 430; Sturte vant v. Forde, 4 M. & G. 101.

(c) Ashurst v. Official Manager of the Bank of Australia, 27 L. J. 168; O'Keef v. Dunn, 5 M. & S. 282; Tinson

v. Francis, 1 Camp. 19; Holmes v. Kidd, 28 L. J. Exch. 112; Whitehead v. Walker, 10 M. & W. 696, & 19 & 20 Vict. c. 60, extends the same law to Scotland.

(d) Carruthers v. West, 9 M. & W. 506; Carr v. Jowell, 16 C. B. 674. (e) Chalmers v. Lanion, 1 Camp. 383. (f) Bartrum v. Caddy, 9 A. & E. 275; Beck v. Robley, Bailey on Bills, 125; 14 B. C. 89.

(g) Stone v. Rawlinson, Willes, 562.