Notarial Charge.-Inland Bill. QUESTION II.-Can charges for noting inland bills of exchange be legally demanded in addition to the principal, and can such charges be recovered as against the acceptor in a court of law? ANSWER: It is stated in Chitty on "Bills of Exchange," 11th ed., p. 427, that "the holder of a dishonoured bill or note has the same remedies under the Act (18 & 19 Vict., c. 97) for the recovery of expenses incurred in noting the same, for non-acceptance or nonpayment, or otherwise, by reason of such dishonour, as he has for the recovery of the amount of the bill or note"; and see Byles on "Bills of Exchange," 13th ed., p. 264. Crossed Cheque.-Effect of returning Unpaid. QUESTION III.-Is the crossing of a cheque (whether general or special) set aside by the fact of the cheque having been returned unpaid, and in the case of such cheque being subsequently paid over the counter to any other person than the bond fide holder, is the banker so paying free from any liability? ANSWER: The crossing is not superseded, and the banker on whom the cheque is drawn would pay it over the counter at his own risk. Cheques Written in Pencil. QUESTION IV.-Is a banker justified in paying or in refusing to pay cheques filled up with the "copying-ink pencils "now so generally used in the commercial world? ANSWER: Though it is very desirable that the use of the pencil should generally be discouraged, a banker would not probably be legally justified in refusing to pay cheques so filled up; and see "Journal of the Institute of Bankers," vol. i., p. 270. "Not Negotiable." QUESTION V.-Under any circumstances can a cheque, crossed as above, be cashed over the counter? ANSWER: The "Crossed Cheques Act" only contemplates the use of the words "Not negotiable on a crossed cheque. The words "Not negotiable " do not by themselves constitute a crossing. They are, in any case, no part of the instructions to the banker, who would cash an otherwise open cheque as if such words were not there. LEGAL DECISIONS AFFECTING BANKERS. WILKINSON AND CO., v. UNWIN. (Reported in full, see below.) In this case the facts had, in a trial which had previously taken place, been found by the jury to be as follows: Wilkinson and Co., the plaintiffs, agreed to sell goods to one Edwin Unwin on credit, provided his mother, the defendant, would agree (which she did) to indorse certain bills with the view of becoming surety for the price of such goods. Accordingly, Wilkinson and Co. drew and indorsed the bills, Edwin Unwin accepted them, and Mrs. Unwin also indorsed them. The bills were not met at maturity, and the mother defended the action on the ground that the plaintiffs were, as prior indorsers, liable to her, and were therefore deprived of their remedy. The Court of First Instance had given judgment for the plaintiffs, and this was now confirmed by the Court of Appeal. The Court held that, although as a general rule an indorser of a bill of exchange, who subsequently becomes the indorsee, cannot maintain an action against the intermediate indorsers, because he is liable to them by reason of his previous indorsement, yet the holder of a bill may always show such circumstances as do away with any liability by reason of his previous indorsement. In this case the fact found by the jury, that Mrs. Unwin intended by her indorsement to make herself liable to the plaintiffs, was sufficient to do away with their liability as previous indorsers. Bill of Exchange-Indorser and Indorsee-Re-indorsement-Circuity of Action. The son of the defendant bought goods of the plaintiffs, and required credit to enable him to pay. It was agreed that the defendant should become surety for the price of the goods. The plaintiffs accordingly drew two bills of exchange on the son of the defendant, and indorsed them to the defendant, who re-indorsed them to the plaintiffs. The bills having been dishonoured at maturity: Held, that the plaintiffs were not precluded from suing the defendant on the ground of circuity of action, and that they could recover the amount of the bills from the defendant. ACTION upon two bills of exchange drawn by the plaintiffs on and accepted by Edwin Unwin, the one for £51. 13s. 4d. at three months, and the other for £60 at four months. At the trial, it appeared that Edwin Unwin had requested the plaintiffs to supply him with goods, and to give him some credit for the price of them by taking bills of exchange, and it was agreed between the plaintiffs and Edwin Unwin that he should procure his mother, the defendant, to indorse the bills as surety for the price of the goods. The plaintiffs accordingly supplied the goods and drew and indorsed the bill sued upon, and the defendant indorsed them to the plaintiffs. It was alleged for the plaintiffs that the defendant indorsed the bills with the intent of thereby becoming surety for the due payment of the bills; for the defendant, it was alleged that she indorsed the bills in the ordinary way and to the ordinary extent incident to an indorsement, and without any intention to forego any rights or remedies ordinarily incident to an indorsement. The bills of exchange were dishonoured at maturity, and the plaintiffs were unable for some time to find the defendant's address, but on finding it they gave her notice of dishonour. The jury found that the plaintiffs had shown due diligence in trying to find out the defendant's address, and to give her notice of dishonour; that the defendant did not put her name on the bill with the ordinary intention, but that she had agreed with the plaintiffs to become surety to them for the price of the goods supplied to Edwin Unwin, and put her name on the bill to become surety to the plaintiffs; and that no payment on account of the bills had been made by the defendant. BOWEN, J., gave judgment for the plaintiffs. The defendant appealed. McLeod Fullarton, for the defendant. The argument is sufficiently noticed in the judgments of the Lords Justices. The following cases were cited in addition to those mentioned in the judgments: Bishop v. Hayward (1); Abrey v. Crux (2); Goupy v. Harden (3). Goodman, for the plaintiffs, was not called upon to argue. BRAMWELL, L.J. :— I think that this judgment must be affirmed. It has been established that if the indorser of a bill of exchange subsequently becomes the indorsee, he can maintain no action against the intermediate indorsers, because he would himself be liable to them by reason of his antecedent indorsement. But there are several other cases which have decided that, if the holder of the bill would not (2) Law Rep. 5 C. P. 37. (1) 4 T. R. 470. (3) 7 Taunt. 159, be liable to the indorser whom he is suing by reason of any previous indorsement of his own, he may enforce his claim because no circuity of action arises; the holder of the bill may always show such circumstances as do away with any liability by reason of his previous indorsement. That has been established by numerous decisions. Notwithstanding Mr. Fullarton's argument, I have no doubt that this action is maintainable. It is alleged by the plaintiffs that the bills of exchange sued on were indorsed by the defendant with the intention of becoming surety for the price of goods supplied to Edwin Unwin. The defendant has alleged that she indorsed the bills in the ordinary way and without any intention to forego her remedies against the plaintiffs as indorsers. The jury have found that the defence to the action is untrue, and they have said that she intended to make herself liable. It is clear that upon this finding she could not have maintained any action against the plaintiffs, if they had indorsed away the bills of exchange sued upon, and if the indorsees had compelled the defendant to pay the amount. It has been argued by Mr. Fullarton, that the agreement relied upon by the plaintiffs must be proved by a memorandum in writing because the contract is one of suretyship. The contract, however, is not within the words or the reason of the Statute of Frauds. If the buyer of goods accepts a bill drawn upon him for the price by a surety who afterwards indorses it to the seller, the surety cannot refuse to pay the amount upon default of the principal debtor, because the agreement under which the bill was signed was not in writing. The liability of the defendant cannot be explained away in the manner suggested. The only difficulty, which I have felt, is that some expressions in the opinions of the Lords in Steele v. McKinlay (1) may be inconsistent with the reasoning of my judgment in this case; but I am satisfied that it was not the intention of the House of Lords to overrule either the three English cases which have been mentioned, namely, Wilders v. Stevens (2), Smith v. Marsack (3), and Morris v. Walker (4); or the two cases decided in the Supreme Court of New York: Seabury v. Hungerford (5), and Hall v. Newcomb (6). BAGGALLAY, L.J.: rect. : In this case, the question arises upon the judgment entered upon the findings, and it is not now disputed that the findings are corThe defendant is an intermediate indorser, and the position of the parties when there has been a re-indorsement is thus described in Byles on Bills, 12th ed., ch. xi., p. 155: "If a bill be re-indorsed to a previous indorser, he has, in general, no remedy (1) 5 App. Cus. 754. (4) 15 Q. B. 589. against the intermediate parties, for they would have their remedy over against him, and the result of the actions would be to place the parties in precisely the same situation as before any action at all. But where a holder has previously indorsed, and the subsequent intermediate indorser has no right of action or remedy on that previous indorsement against the holder, there are cases in which the holder may sue the intermediate indorser." The object of the rule of law is to prevent a circuity of action. Primâ facie, when the holder of the bill is likewise a previous indorser, no action can be maintained; but then, as has been pointed out in the work which I have cited, certain exceptions exist to the general rule. Wilders v. Stevens (1), Smith v. Marsack (2), and Morris v. Walker (3) are instances of these exceptions. I think that what Mr. Fullarton has pointed out with respect to them is very important. They were all cases decided upon the pleadings, and this creates a difference between them and Steele v. McKinlay (4). In that case, all the facts were before the House of Lords, and it was held that a written contract was necessary. I was much impressed by the argument which has been addressed to us, and under other circumstances there might be great force in the contention that the agreement put forward by the plaintiffs is not in writing; but I think that the defendant is precluded by the findings of the jury from raising the defence upon which she wishes to rely. They have found that she indorsed the bills of exchange in order to make herself liable as surety for the debt due from her son. Upon this ground, I think that the appeal must be dismissed. The verdict and the judgment have proceeded upon the ground that the defendant was an indorser; and if this were an ordinary case of indorser and indorsee, no doubt the verdict and the judgment would be right, for primâ facie no consideration is needed to support an indorsement. However, a difficulty was raised as to the plaintiff's right to recover, and the objection was based on the ground that before the indorsement to the plaintiffs by the defendant the plaintiffs themselves had been parties to the bill. At first sight this seems a fatal objection; but the effect of the previous indorsement by the plaintiff's may be destroyed. In certain cases relating to mercantile law, the objection to the right to recover was raised upon the pleadings; but circuity of action was negatived, and the moment that that is negatived, the objection is destroyed. If it is shown that no consideration existed for handing the bill to the defendant, the circuity of action is taken away. In Morris v. Walker (5) the objection was taken away by (1) 15 M. & W. 208. (3) 15 Q. B. 589. (5) 15 Q. B. 589. |