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ance, he is not bound as acceptor. And Justice Laurence says, “When the general question shall arise it will be worth

considering, how that which is not communicated to the holder, can be considered as an acceptance, while it is in the “hands of the drawee, and where he obliterates it, before he

communicates it to the holder."2 Where promissory notes were executed in Italy and sent to London to the payees, it was held that no cause of action arose on them till their delivery in London.: To constitute a contract, there must be a delivery over of the instrument by the drawer or indorser for consideration, and “ as soon as these take place, the contract is complete "and it becomes a contract in writing. The mere signature does “ not make a contract."4 Where a bill was left with a Banker for acceptance on Friday and accepted the same day, but when the holder's clerk called for it on Saturday, he was told the bill was mislaid, and requested to call on Monday, to which he assented. On Monday when the holder's clerk called again for it, he was told that the person who had charge of it was out. Shortly afterwards the Banker had reason to believe that the bill would not be honored by the drawer, and so cancelled his acceptance by striking his pen through it, and in this state it was returned to the holder's clerk on Tuesday, and this was held not to be a valid acceptance. If an indorsee of a bill authorize his indorser to transmit him the bill by the post,

the delivery is complete as soon as the bill is posted. 6

Clause third.—This treats of conditional delivery, and it is only against a person who has not given consideration, and had notice that the instrument had not been delivered absolutely, (see Sec. 9), that evidence is admissible to show that the delivery was conditional. So it has been said “The liability of an

i Cox v. _Troy, 5 B. & Ald. 474 ; S. C. D. & Ry. 38; Brom. age v. Lloyd, i Exch. 32 ; Lloyd v. Howard, 15 Q. B. 995; S. C. 20 L. J. (2. B.) 1; Marston v. Allen, 8 M. & W. 491; S. C. I Dowl., N. S. 442; Bell v. Ingestre, 12 Q. B. 317; S. C. 19 L. J. (Q. B.) 71; Winter V. Round, i M. H. C.R. 202.

9 Bentinck v. Dorrien, 6 East.

3 Chapman v. Cottrell, 34 L. J. (Ex.) 186; S. C. 3 H. & C. 857.

4 Abrey v. Crux, L. R., 5 C. P. per Bovill, C. J. at p. 42; S. C. 39 L. J. (C. P.) 9.

5 Bk. of V. Land v. Bk. of Victoria, L. R., P. C. 526; S. Č. 40 L. J., (P. C.) 28. 6 Cote ex parte, L. R. 9

Ch. App. 27.

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“indorser to his immediate indorsee, arises out of a contract “ between them, and this contract, in no case, consists exclusively "in the writing popularly called indorsement, which is indeed

necessary to the contract in question ; but the contract arises out of the written indorsement itself, the delivery of the bill " to the indorsee, and the intention with which that delivery was made and accepted, as evinced by the words, either spoken or written, of the parties, and the circumstances (such as the usage of the place, the course of dealing between the parties, and their relative situation), under which the delivery takes “ place.”! So if a bill be indorsed and delivered to the indorsee, on a condition precedent, viz., that the indorsee, shall forthwith retire certain other bills, which he omits to do, the indorsee obtains no title to the bill.: The delivery to be effectual must be with the intention to pass the property in the bill, and to guarantee payment thereof, so where C. and D. are jointly interested in a bill of which C. is alone the payee, and which he indorses to D. for collection, this does not transfer the property therein, and C. may show the circumstances under which the delivery was made.3 So also where a note is made and given as collateral security for a running account.* The last two clauses have been repeated in Secs. 47 and 48.5 47. Subject to the provisions of section fifty- Negotiation by

delivery. eight, a promissory note, bill of exchange or cheque payable to bearer is negotiable by delivery thereof.

Exception. -A promissory note, bill of exchange or cheque delivered on condition that it is not to take effect except in a certain event is not negotiable (except in the hands of a holder for value without notice of the condition) unless such event happens.

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4 Boys in re, L. R. 10 Eq. 467.

5 Gibson v. Minet, I H. Bl. 605; is the authority from which they are taken, see also Crouch v. Credit Foncier, L. R. 8 Q. B. 382; S. C. 42 L. J. (Q. B.) 183.


ILLUSTRATIONS. (a). A, the holder of a negotiable instrument payable to bearer, delivers it to B's agent to keep for B. The instrument has been negotiated.

(b). A, the holder of a negotiable instrument payable to bearer, which is in the hands of A's Banker, who is at the time the Banker of B, directs the Banker to transfer the instrument to B’s credit in the Banker's account with B. The Banker does so, and accordingly now possesses the instrument as B's agent. The instrument has been negotiated, and B has become the holder of it.

See notes to Secs. 46 and 58; and also Sec. 92, Evidence Act provisoes 2 and 3 and illustration (j). The illustration (b) is taken from a note to Byles."

48. Subject to the provisions of section fiftyeight, a promissory note, bill of exchange or cheque payable to the order of a specified person, or to a specified person or order, is negotiable by the holder by indorsement and delivery thereof.

See notes to Secs. 46 and 58.

Negotiation by indorsement.

Conversion of indorsement in blank into in. dorsement in full.

49. The holder of a negotiable instrument indorsed in blank may, without signing his own name, by writing above the indorser's signature a direction to pay to any other person as indorsee, convert the indorsement in blank into an indorsement in full; and the holder does not thereby incur the responsibility of an indorser.

The rule contained in this section was established in England in the year 1699. Byles quotes the case, on which it was founded as follows: "C. having a bill payable to himself, or order, “indorsed it in blank leaving a vacant space above, and sent it " to his friend J. S. who got it accepted; but the money

not being paid, C. brought an action against the acceptor, and it was objected, that the action should have been brought by J.


Byles on Bills, 8th ed., p. 136; 13th ed., p. 150.

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"S. But Holt, C. J. said J. S. had it in his power to act either

as servant or assignee. If he had filled up the blank space, making it payable to himself, as he might have done if he would, " that would have witnessed his electiou to receive it as in"dorsee.”! (See ante, Sec. 16.) 50. The indorsement of a negotiable instrument Effect of in

dorsement. followed by delivery transfers to the indorsee the property therein with the right of further negotiation; but the indorsement may, by express words, restrict or exclude such right, or may merely constitute the indorsee an agent to indorse the instrument, or to receive its contents for the indorser, or for some other specified person.

B signs the following indorsements on different negotiable
instruments payable to bearer :-

(a) “Pay the contents to C only.”!
(b) “Pay C for my use.
(C) “Pay C or order for the account of B." 4
(d) 66 The within must be credited to C."5

These indorsements exclude the right of further negotiation by C.

(e) “Pay C."
(f) Pay C value in account with the Oriental Bank.”

(g) Pay the contents to C, being part of the consideration in a certain deed of assignment executed by C to the indorser and others.?"

These indorsements do not exclude the right of further negotiation by C.

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· Byles on Bills, 13th ed., p. 152; Clark v. Pigot, 12 Mod. 193 ; S. C. 1 Salk. 126; Vincent v. Horlock, i Camp. 442 ; see also Hirschfield v. Smith, L. R. 1 C. P. 340 ; S. C. 35 L. J. (C. P.) 177.

2 Edie v. E. 1. CO., 2 Burr. 1,225.

3 Sigourney v. Lloyd, 8 B. & C.


S. C. Affd. 5 Bing. 525; 3
Y. & J. 220.

4 Treuttel v. Barandon, 8
Taunt., 100; S. C. 1 Moore, 543.

5 Ancher v. Bk. of England, 2 Doug. 637.

6 Buckley v. Jackson, L. R. 3 Ex. . 135; Murrow v. Stuart, 8 Moo. P. C. 267.

7 Potts v. Reed, 6 Esp. 57.

It will be observed, that all the illustrations to this section are founded on reported cases to which I have given the refer. ences, thus I hope facilitating, the exercise of the caution, which the High Courts have declared necessary in judicial officers from attaching too much weight to illustrations, and enjoining on them the necessity for satisfying themselves, that they are not opposed to the provisions of the section, to which they are appended.'

The judgment of Maule, J., partially quoted before, in Castrique v. Buttiegege shows clearly the scope of this section he says, “The liability of an indorser to his immediate indorsee, arises out “ of a contract between them; and this contract in no case con“sists exclusively in the writing popularly called an indorsement, “and which indeed is necessary to the contract in question ; but " that contract arises out of the written instrument itself, the

delivery of the bill to the indorsee, and the intention with “ which that delivery was made and accepted, as evinced by the words, either written or spoken of the parties, and the circum“stances (such as the usage of the place, the course of dealing “between the parties and their relative situations,) under which “the delivery takes place ; thus a bill with an unqualified " written indorsement, may be delivered and received for the “purpose of enabling, the indorsee to receive the money for “account of the indorser, 3 or to enable the indorsee to raise 6 money for his own use, on the credit of the indorser, or with "an express stipulation, that the indorsee, though for value is “ to claim against the drawer and acceptor only,4 (see Sec. 52), " and not against the indorser, who agrees to sell his claim “ against the prior parties, but stipulates not to warrant their solvency. In all these cases, the indorser is not liable to the

and they are all in accordance with the general law of contracts, which enables parties to them, to limit and modify “their liabilities as they think fit, provided they do not infringe "any prohibitory law."

Illustration (6).—In the case on which this illustration is

indorsee ;

1 See Nanak Ram V. Mehin Lal, I. L. R., i All. per Stuart, C. J. at p.496; Koylash Chunder v. Sonatun Chung, I. L. R. 7 Cal. 132; Shaik Omed v. Nidhee Ram, 22 Suth. W. R. 367.

2 Ante, Sec. 46; 10 Moo. P. C. 94, 108; S. C. 27 L. J. (P. C.)

3 Callow v. Laurence, 3 M. &

S. 95.

4 Pike v. Street, 1 Moo. & M. 226.

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