CHAPTER Transfer to acceptor or other party liable. Transfer for part of sum due. For residue unpaid. Subject to the other provisions of the Code, when a bill or note is negotiated back to the acceptor or maker, a prior indorser, or the drawer, he may re-issue and further negotiate the bill, but cannot enforce payment against any intervening party to whom he was previously liable (f); but transfer at or after maturity to the maker or acceptor in his own right is a discharge of the bill or note. A bill or note cannot be indorsed for part of the sum remaining due to the indorser upon it, if the limitation of the sum for which it is indorsed appear on the indorsement itself. Such an indorsement is not warranted by the custom of merchants, and would be attended with this inconvenience to the prior parties, that it would subject them to a plurality of actions (g). It is conceived that the effect of such an indorsement, when attempted, is to give the indorsee a lien on the bill, but not to transfer a right of action, except in the indorser's name (h). But if a bill or note be indorsed or delivered for a part of the sum due on it, and the limitation of the transfer do not appear on the instrument, the transferee is entitled to sue the maker or acceptor for the whole amount of the bill, and is a trustee of the surplus for the transferor (i). If the bill have been partly paid, either by the acceptor or by the drawer, who for this purpose is the agent of the acceptor (k), the bill cannot be indorsed for the part remaining due (1), at least if the indorsement show that. (f) Code, s. 37. The other provisions seem to be sects. 59 and 61. His indorsee may, however, recover against the intervening parties unless their indorsements are struck out. Attenborough v. Mackenzie, 25 L. J., Ex. 244. And so, too, a prior indorser, if his indorsement were not one for value, but the indorsement back to him be such, can sue his immediate indorsee, or, indeed, all subsequent indorsees, until there have been an indorsement for value. Wilkinson v. Unwin, 7 Q. B. D. 636. By sect. 61, if the acceptor or maker become holder in his own right or after maturity, the bill or note is discharged; impliedly, therefore, it will not be so if he be not holder in his own right, but only as assignee, or trustee, or executor, or if his right is subject to that of another, & not a right against all the world. Nash v. De Freville [1900] 2B. 72. C. A. (g) Hawkins v. Cardy, 1 Lord Raym. 360; Code, s. 32 (2). (So held in America. See Byles on Bills, 6th American edition, p. 273. Such an indorsement does not operate as a negotiation, sect. 32 (2), hence the intended indorsee is not a holder, sect. 31 (1). Still a man having a lien is a holder for value pro tanto, sect. 27 (3). (i) Reid v. Furnival, 1 C. & M. 538; 5 C. & P. 499; 38 R. R. 684. The Code, s. 32 (2), expressly uses the phrase "purports." Hence a bill or note payable by instalments, cannot be indorsed for one or more only of the instalments if that appear on the indorsement. (k) Bacon v. Searles, 1 Hen. Bl. 88. (1) Hawkins v. Cardy, 1 Lord When the holder of a bill or note absolutely and unconditionally, at or after its maturity, renounces his rights CHAPTER XII. against the acceptor or maker, the bill or note is dis- After release. charged. The renunciation must be in writing unless the bill or note be delivered up to the acceptor or maker. So, too, any party to a bill or note may be released by the holder before, at, or after maturity, but such party will still remain liable to an indorsee for value before maturity, and without notice (m). The holder cannot transfer after action brought, so as to enable his transferee to sue also, provided the latter were aware that the first action had been commenced (n). But if the transferee had no notice, the transfer is good (@). After action brought. Where a negotiable instrument is transferred abroad, by Transfer in a mode of transfer valid here, but invalid there, or vice foreign versa, a question may arise as to the validity to be attributed to such a transfer in our Courts. The general rule of law on this subject is, that a contract is to be governed by the law of the country where it is made or where it is to be performed, but the remedy is to be moulded by the law of the country where it is sought (p). A bill is to be considered as made in the country where it is to be paid (2). The subject, however, will be considered more in detail in the Chapters on FOREIGN BILLS and FOREIGN LAW. Raym. 360; Carth. 466; Johnson v. Kennion, 2 Wils. 262; Code, s. 32 (2). (m) Dod v. Edwards, 2 C. & P. 602. Code, s. 62. Post, Chap. XVI. (n) Marsh v. Newell, 1 Taunt. 109; Jones v. Lane, 3 Y. & C. 281. The Queen's Bench in Deuters v. Townsend, 33 L. T. 301, held that this defence could not be raised by plea, and that the defendant's course was to apply to the equitable jurisdiction of the Court, although Mr. Baron Alderson, in Jones v. Lane, seems to have thought otherwise. In America it has been held that a judgment extinguishes the negotiable quality of a note. Byles on Bills, 6th American edition, (0) Colombier v. Slim, K. B. (P) See the authorities col- (4) Though in general the law CHAPTER After holder's death. After his bankruptcy. After marriage. By a deposit with a banker. Banker's After the death of the holder his personal representatives should transfer (r). But where indorsement is necessary, and the testator has only written his name on the bill without delivery, the executor cannot complete the indorsement by mere delivery (8). After the holder's bankruptcy his trustees should transfer (t), unless the bankrupt were merely agent or trustee. For the Bankrupt Laws have no operation on any property in the possession of the bankrupt, unless he have therein a beneficial interest. The husband of a married woman, who acquired a right to a bill or note given to the wife, either before or during marriage, should indorse (u). Bankers have a general lien on all securities for money which are deposited with them, as bankers, in the way of their business, and therefore a lien even as against the true owner, on bills and notes payable to bearer, or on Exchequer bills, although the customer who deposited them was not the real owner, and had no authority to give a lien (x); but not on Exchequer bills which may happen to be delivered to them merely for the purpose of receiving the interest and exchanging them for new ones (y). A doubt has been raised as to the responsibility of a responsibility banker for securities intrusted to him by a customer for safe keeping, on the ground that the banker, being a gratuitous bailee, is only liable for gross negligence (z). for safe custody. But it is conceived that a banker in such cases can hardly be regarded as acting gratuitously for his customer, such custody being an inducement held out to attract customers, by the use of whose balances the banker is paid. This view (r) See ante, Chapter V., EXECUTORS, and as to the question whether one of several executors can indorse. ($) Bromage v. Lloyd, 1 Exch. 32. The bill or note belongs to the estate, and not to the intended indorsee. (t) See, however, Cohen v. Mitchell, 25 Q. B. D. 266; and Chapter on BANKRUPTCY. (u) See ante, Chapter V. A married woman now can hold property and deal with it as if she were a feme sole; hence she alone can now indorse if it be part of her separate estate. (r) Barnett v. Brandao, 6 M. & G. 630; London C. Bank of Australia v. White, L. R., 4 Ap. Ca. 413. (y) Barnett v. Brandao, 3 C. B. 519, Dom. Proc. (-) Giblin v. McMullen, L. R., 2 P. C. 317, where, however, it should be observed that the customer himself kept the key. seems, moreover, to be in accordance with the most recent CHAPTER case on the subject (a). XII. Where chattels are pledged as security for a debt payable Transfer at a day prefixed, the pledgee has at common law on default by way of of his debtor, and after giving notice to redeem, a right to pledge. sell the pledge and reimburse himself (b). This power of sale extends not only to a pledge of chattels, but to a pledge of stock or annuities (c). The rule of the civil law is in substance the same. "Venduntur pignora simul atque solutionis dies venit, et debitor legitimo modo interpellatus, sine justâ causâ cessat " (d). But a mere pledge of negotiable paper does not, it is conceived, confer a power of sale. For the pledgee is trustee of the rights and obligations of the holder. He cannot transfer his trust, but must preserve his remedies and collect payment from the parties liable at maturity. His transfer, though it may confer title, will not exonerate himself (e). As to the effect of an action in trover in transferring By action in the property in a bill, see Chapter XXVI., COLLATERAL trover REMEDIES. The words goods and chattels, or either of them, in a By will. testamentary instrument, will pass all the personal estate of the testator, including choses in action, such as bills and notes. But, where the bequest is of all goods and chattels in a particular place, bills and notes in general do not pass. But it has been considered, that such notes as are commonly treated as money will pass (ƒ). It may not be useless to subjoin a few words as to the Donatio extent to which bills or notes may be the subjects of a mortis causâ. donatio mortis causû (g). (a) Johnstone's case, 40 L. J., Chan. 286; Barnett v. Brandao, 6 M. & G. 630; 3 C. B. 519, Dom. Proc.; which last-mentioned case, it may be observed, was not brought before the notice of the Court in Giblin v. McMullen, supra. Bankers are, of course, responsible for the care of their own clerks and servants. (b) Tucker v. Wilson, 1 P. Wms. 261; 1 Bro. P. C. 494, in error; Pigott v. Cubley, 15 C. B., N. S. 701; 2 Kent's Com. 805; Martin v. Reed, 31 L. J., C. P. 126. (c) Tucker v. Wilson, ubi sup. ; Lockwood v. Ewer, 2 Atkyns, 303. (d) Doctrina pandectarum, cap. 6, s. 318. (e) See 2 Kent's Com. 802, 805; Appleton v. Donaldson, 3 Bur. 381; Browne v. Ward, 3 Duer. 360. (f) Stuart v. Bute, 11 Ves. 662; and in Dom. Proc. 1 Dow. 73; 14 R. R. 14; see 1 Roper on Leg. 224, 3rd ed.; 2 Wms. on Exors. 648 and 942, 3rd ed. (g) See further on this subject the profound work of the late Mr. Justice Williams on Executors. CHAPTER XII. sit. ** *** The law on this subject is entirely derived from the civil law. But the Digest and the commentators distinguish between several species of donatio mortis causâ, and in a manner very unsatisfactory (h). A donatio mortis causâ is thus defined in the Institutes: Mortis causâ donatio est, quæ propter mortis fit suspicionem, cum quis ita donat, ut si quid humanitus ei contigisset, haberet is qui accipit; sin autem supervixisset, is qui donavit reciperet, vel si eum donationis panituisset, aut prior decesserit is, cui donatum Et in summa, mortis causâ donatio est, cum magis quis se velit habere, quam eum cui donat, magisque eum cui donat, quam heredem suum. But, as now understood in the law of England, a donatio mortis causâ is a conditional gift by the donor in contemplation of death (i), to take effect in the event of death (k). The result of the cases seems to be, that a bond (1), or a policy of insurance (m), a deposit note, or a bank note, or bill of exchange, or promissory note, specially indorsed to the donee or made or become payable to bearer, may be the subjects of a donatio mortis causâ (n), and that the delivery of a bond with mortgage deeds will impose a trust upon the real and personal representatives in favour of the donee (o). But a cheque drawn by the donor upon his own banker, cannot be the subject of a donatio mortis causâ, because the death of the drawer is a revocation of the banker's authority to pay (p). No more, it is (h) See the judgment of Lord Hardwicke, in Ward v. Turner, 2 Ves. 431; and of Lord Rosslyn, in Tate v. Hilbert, 2 Ves. jun. 111; 2 R. R. 175. (i) Duffield v. Elwes, 1 Bligh, N. S. 530; 30 R. R. 69; Miller v. Miller, 3 P. Wms. 356. See the opinion of Eyre, C.B., in Blount v. Barrow, 1 Ves. jun. 546; but the qualification as to last illness is not found in the report of the case. 4 Bro. C. C. 72. See 1 Roper on Legacies, 3rd ed.; and Wms. on Exors., 3rd ed. 609. (k) Delivery to an agent of the donee will be good, but not to a mere agent of the donor. Farquharson v. Care, 2 Coll. 356; Powell v. Hellicar, 28 L. J., Chan. 355; 26 Beav. 261. A mere symbolical delivery will not suffice. Ward v. Turner, supra. There must be an actual delivery. Bunn v. Martham, 7 Taunt. 227 ; 2 Marshall, 532; 17 R. R. 497; Tate v. Hilbert, 2 Ves. jun. 120; 2 R. R. 175; Irons v. Smallpiece, 2 B. & Ald. 553; 21 R. R. 395. (1)_ Snellgrove v. Baily, 3 Atk. 30. But not railway stock, Moon v. Moon, L. R., 18 Eq. 474. (m) Witt v. Amis, 30 L. J., Q. B. 318. (n) Drury v. Smith, 1 P. Wms. 405; Miller v. Miller, 3 P. Wms. 356; Macdonald v. Macdonald, 16 C. o. S. Ca. 758, S. C.; Duffin v. Duffin, 44 Ch. D. 76, where the donatio of a deposit note was not invalidated by there being the donor's own cheque on the form at the back. (0) Duffield v. Elwes, 1 Bligh, N. S. 409; 30 R. R. 69. (P) Unless cashed, or it seems presented for payment in the lifetime of the donor. Bromley v. Brunton, L. R., 6 Eq. 275; Bouts v. Ellis, 17 Beav. 121; 4 De G., M. & G. 249; Powell v. Hellicar, 28 L. J., Chan. 355; 26 Beav. |