without holding that, till the blank is filled up, the indorser is the only person in whose name action can be maintained, which, accordingly, was the old doctrine.1 But, now that any holder is entitled to sue by virtue of the blank indorsement as a general conveyance in favour of the bearer, the converse of this doctrine must be, that the indorser is thenceforth divested, and can have no title to sue, although the debtor will be discharged by filling up his blank indorsement with a receipt for the contents of the bill or note, as the indorser is the last person in right of it ex facie of the document. In Scotland, summary diligence on bills or notes is authorised against all indorsers, without distinguishing whether their indorsements are blank or not, 2 which excludes the supposition of diligence proceeding in their names, when they are thus the parties against whom it may be used, Such being the effect of a blank indorsement, it is often considered advisable to fill it up, so as to prevent payment of it from being received by a stranger in the event of its being lost or stolen. 3 This is done by prefixing to the indorser's signature the words "pay to Mr A. B. or or"der," or "pay to Mr A. B," the words" or order" in an indorsement not being required, even in England, to render the bill or note indorsable, provided it has been granted at first to the payee " or order."4 In Scotland, it has been shewn that these words are not necessary in any ! Laid down in Clark v. Pigott, 301, note 5. * 1681, c. 20; 1772, c. 72. Beawes, No. 178. • Moore v. Manning, Comyn's Reports, 311, cited also in Selwyn's N. P. 346. In Acheson v. Fountain, 1 Str. 557, where a bill was declared on as indorsed to a certain person," or order," and turned out to be indorsed to her without the words " or order," the Court held the indorsement to be the same in legal effect as if it had these words, and therefore sustained the declaration. The same point was decided on full consideration by Lord Mansfield and the Court of King's Bench in Edie v. the East India Company, 2 Burr. 1216, the Court founding on the two preceding cases as settling the law. case. The effect of a full indorsement is to prevent the bill or note from being indorsed by any but the person mentioned in it. 2 If any other person indorses, his indorsement conveys no right to the bill or note, though it will af ford a good claim against himself, as being a new drawer on the original drawee. Nor will the special indorsee confer a good right by merely delivering the bill or note to a third party, without indorsing his own name, although, when a person has got such a bill for a valuable consideration, without indorsement, he may insist that it should be indorsed. In England, such an indorsement is good, even though made after the indorser has committed an act of bankruptcy; or, if it is not made till his assignees have taken up the estate, they will be ordained to make it, as they hold the estate subject to all the equitable claims connected with it which could be enforced against the bankrupt. On the same grounds, such an indorsement would probably be sustained in Scotland, though made within sixty days of the indorser's bankruptcy, under the act 1696, and his trustee would be ordained to make it, if his estate should have been sequestrated for behoof of his creditors. 5 The creditor in a bill or note, having full power over it, may make a restrictive indorsement, e. g. by indorsing it to a certain person for his (the indorser's) use, 6 which will not only prevent the indorsee, in general, from indorsing, but 1 Ante, 101. This doctrine is implied in Mead v. Young, cited ante, 96, note 3, as also in Potts v. Read, 6 Esp. 57, and in the cases cited, 302, note 4. • Per Lord Mansfield in Heylin v. Adamson, 2 Burr. 669. Smith v. Pickering, Peake, 50, Anon. I Campb. 49; Greening ex parte, 13 Vesey, 206, Mowbray ex parte, 2 Jacob and Walker, 428. In this last case, it was declared that the assignees should not be personally liable as indorsers. • Vide Chap. on Bankruptcy. Per Lord Hardwicke in Snee v. Prescott, 1 Atk. 249. will make him the indorser's mandatary, whose mandate can be recalled at pleasure. It would appear, however, that such an indorsee may discount the bill, since the money drawn by him on discounting it will be held to have been received for his constituent's behoof. 2 He may likewise indorse the bill or note "payable to J. S. only," which will prevent J. S. from indorsing, or he may desire that the amount should be "credited to the account of J. S.," which has been found to imply merely a personal credit in his favour, without any power of indorsement. 3 An indorsement, however, which desires absolutely that payment should be made to a certain person, stating, at the same time, that it was in part of a specified consideration in a deed by him to the indorsers, is not restrictive, the statement regarding 1 Pothier, Nos. 89-90. This opinion is not disputed, as Chitty supposes, 138, by Beawes, No. 219. What that author disputes is the doctrine laid down by Marius, 72, that a bill or note made payable without restriction to a certain person is a mere mandate, which may be recalled by the drawer even after acceptance. This doctrine was negatived with regard to indorsation, in a case cited by Forbes, 42, Hume v. Hamilton, 24th July 1691. Pothier's doctrine, that an indorsement, in the terms mentioned above, amounts to a revocable mandate, involves no inconvenience to third parties, since the words that are inserted prevent the bill from being indorsed, a delectus personæ being understood in favour of the mandatary, or, according to the same author, though the words "or or"der" should be added to the indorsement, the indorsee must understand that he likewise is merely the indorser's mandatary. * Ante, 288-9. • This was decided in Ancher v. the Bank of England, 2 Dougl. 637. There seems to have been likewise another ground for deciding against the efficacy of the indorsement in this case, viz. that it was forged, so that it could convey no interest. This plea was disregarded, on the authority of a previous English case, Price v. Neale, 3 Burr. 1355, in respect that the defendants, who had discounted the bill on the forged indorsement, had been repaid for the honour of the plaintiffs, and that the money therefore could not be recovered back from them, as they were onerous indorsees. But, in Scotland, an action of repetition would probably have been allowed for this money, as it had been paid altogether through mistake. the consideration being accounted mere surplusage.1 Farther, an indorsement may be conditional, so that the indorsee shall have right to payment of the bill or note only if the condition be performed, while, if it is not, the right will revert to the indorser. 2 The constitution of a bill or note cannot, as already mentioned, be made to depend on a contingency; but the same rule does not apply to its transmission. It has been already stated, that, by adding the words "without recourse" to an indorsement, the indorser may be freed from all future claim upon it. Although delivery of the bill or note is necessary, as already mentioned, 3 to complete the indorsee's right, his right, when thus completed, draws back to the date of the indorsement, if it is dated, or, otherwise, to the date of the bill. In case of the indorsement of a foreign bill, which is generally drawn in different parts, each part ought to be delivered to the indorsee; otherwise, the same inconveniences may follow which have been already explained with reference to the payee of such a bill. 4 The effect of indorsement may now be considered, 1st, With reference to the obligations which it imposes on the indorser, and the claims arising from it to the holder against the different parties whose names are on the bill or note. It has been said that the indorser is to be considered as a new drawer on the original drawee. 5 He is therefore 1 Decided by Lord Ellenborough in Potts v. Read, 6 Esp. 57. rule is applied in Hausonillier v. Hartinsks, 7 T. R. 733. The same ' Robertson v. Kensington and others, 4 Taunt. 30. In this case, a bill having been indorsed payable to a person on the occurrence of a certain event, and there being also several subsequent indorsements, the acceptors, who had paid it to a holder before the condition of the first indorsement was performed, were found liable in second payment to the first indorser. 3 Ante, 283. Ante, 87-8. › Per Lord Mansfield in Heylin v. Adamson, 2 Burr. 669. Vide also Haly v. Lane, 2 Atk. 182; Hill v. Lewis, 1 Salk. 133; Smallwood v. Vernon, 1 liable to be sued immediately, if the drawee should refuse to accept, 1 and he is subject, in all respects, to the same claim of recourse as the drawer. He is also discharged from this claim in the same manner as the drawer, by the holder's failure in due negotiation of the bill or note. 2 But he cannot be liable to the acceptor, seeing the acceptor is the proper debtor in the bill, unless when a person accepts for the indorser's honour. 3 The nature of this kind of acceptance shall be afterwards considered. On the other hand, the indorsee, if the indorsement is special, or, if it is blank, any holder of the bill or note, acquires by the indorsation, which is a transference of all claim upon the document, first the same right of action which the payee had upon it against the acceptor and drawer, and, farther, a right of recourse, not only against his indorser, but against every prior indorser, as being in legal effect a new drawer. The manner and order of enforcing these several claims shall be afterwards discussed, in considering the negotiation of, and diligence or action upon, bills and notes. It has been already explained, that no person can be liable directly upon a bill or note, either as drawer, acceptor, or indorser, unless his name appears on it. He may, indeed, be liable under a collateral guarantee, 5 or for re Str. 478; Ballingall v. Gloster, 3 East. 182. The same principle has been recognised in a great number of other cases, 1 This was decided by the Court of K. B. in Ballingalls v. Gloster, 4 Esp. 268, and 3 East 481, expressly on the ground that an indorser was liable in all respects as a new drawer. For the drawer's liability in case of the drawee's refusal to accept, vide ante, 185-6. * Per Lord Ellenborough in Ballingalls v. Gloster, note 1. 3 Both the doctrine mentioned in the text and the exception to it are very clearly explained by Pothier, No. 111-12. Ante, 244. 5 In Morris v. Stacey, Holt's C. N. P. 153, the defendant was found liable for a bill under a separate letter of guarantee, though his name was not on the bill. |