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§ 32. conditions of such an indorsement. In the first place it must be "written." This as we have seen, according to the Interpretation Act, R. S. C. c. 1, s. 7 (23), includes words printed, painted, engraved, lithographed or otherwise traced or copied. A stamp is frequently used by banks and other corporations, so that the only writing is the signature of the officer who executes it. The indorser need not sign with his own hand; his signature may be written. by some one authorized by him: sections 25 and 90. The indorsement and signature may be in pencil: ante, p. 39. As to what is a sufficient signature see page 40.
Not an indorsement.
Indorsement in its literal sense means writing one's name on the back of the bill, but the indorsement may be on any part of it, even on the face: Young v. Glover, 3 Jur. N. S. Q. B. 637 (1857); ex parte Yates, 2 De G. & J. 191 (1858); Arnot v. Symonds, 85 Penn. St. 99 (1877). Where a person signs a bill otherwise than as a drawer or acceptor, he is liable as an indorser: section 56.
An agreement in writing to indorse a bill is not an indorsement: Rose v. Sims, 1 B. & Ad. 521 (1830); Harrop v. Fisher, 10 C. B. N. S. at p. 204 (1861). Nor is the assignment of a bill by a separate writing: re Barrington, 2 Scho. & Lef. 112 (1804); ex parte Harrison, 2 Brown C. C. 615 (1789). The latter may be a transfer of all the rights of the holder to the transferee, but it does not operate as a commercial negotiation under the law merchant, to which the law accords special privileges, one of them being that the holder may give to his transferee greater rights than he himself has, when the latter is in the position to become a holder in due course.
1. The holder of a note writes on the back "I bequeath— pay the within to D. or his order, at my death" signs it and gives
it to D. This is not an indorsement: Mitchell v. Smith, 33 § 32. L. J. Ch. 596 (1864).
2. The following on the back of bills and notes over the signature of the indorser has been held to be a valid indorsement:-"I hereby sell and assign all my interest in the within note to B.": Sears v. Lantz, 47 Iowa 658 (1878); Shelby v. Judd, 24 Kansas, 161 (1880); Hatch v. Barrett, 34 ibid 223 (1885).
3. In Michigan it has been held that the words, "I transfer my right, title and interest in the within note to Y." over the signature of the indorser on the back of a note, do not operate as a commercial indorsement, but only as an ordinary assignment, and if for value before maturity, do not give the transferee any higher or greater rights than the transferee possessed: Aniba v. Yeomans, 39 Mich. 171 (1878). This has been criticised and not followed in other States: 1 Daniel, 688.
An indorsement written on an allonge, or on a Allonge. "copy" of a bill issued or negotiated in a country where "copies" are recognized, is deemed to be written on the bill itself; Imp. Act, s. 32 (1).
An allonge (literally lengthening or elongation) is a paper attached to the bill to receive indorsements, when there is no longer room for them on the back of the bill itself.
Copies of bills are not used in England, Canada or the United States; but on the continent of Europe where the practice of drawing bills in sets is not followed, copies are sometimes used for convenience of transfer while the original is being forwarded for acceptance: Nouguier, § 208.
(b.) It must be an indorsement of the entire bill. No partial A partial indorsement, that is to say, an indorse- ment. ment which purports to transfer to the indorsee a part only of the amount payable, or which purports
§ 32. to transfer the bill to two or more indorsees severally, does not operate as a negotiation of the bill; Imp. Act, s. 32 (2).
All must indorse.
There may be a partial acceptance of a bill: section 19, s-s. 2(b). An indorsement of such a bill would be valid, as it would be an indorsement of the entire bill as accepted. An indorsement of part of the bill does not constitute the indorsee a holder or give him the rights of a holder. A person who has made himself liable on a bill cannot be compelled to defend two actions on it instead of one. See Hawkins v. Cardy, 1 Ld. Raym. 360 (1704); Jones v. Broadhurst, 9 C. B. 173 (1850); Heilbut v. Neville, L. R. 4 C. P. at p. 358 (1869); Miller v. Bledsoe, 2 Ill. 530 (1838).
(c.) Where a bill is payable to the order of two or more payees or indorsees who are not partners, all must indorse, unless the one indorsing has authority to indorse for the others: Imp. Act, s. 32 (3).
This clause is an example of the custom of merchants having overcome the law as laid down by the judges. In the case of Carvick v. Vickery, 2 Douglas 653 n. (1781), action was brought upon a bill drawn by two persons, not partners, payable "to us or our order. and indorsed by only one of them in his own name. The full court unanimously set aside a non-suit, Lord Mansfield remarking that the drawers by making the bill payable "to our order" had made themselves partners as to this transaction. At the new trial the defence stated and offered to prove, that by the universal usage and understanding of all the bankers and merchants in London, the indorsement was bad, because not signed by both payees. The
jury, una voce, declared they knew it perfectly to be as § 32. stated, and without hearing a witness found a verdict for defendant.
Where one party has the authority of the other and indorses in his name, it is in effect indorsed by both, so this is no exception. In the case of a partnership, a partner is presumed to have authority to indorse a bill payable to the order of the firm.
2. Where, in a bill payable to order, the payee Miss or indorsee is wrongly designated, or his name is misspelt, he may indorse the bill as therein. described, adding his proper signature; or he may indorse by his own proper signature: Imp. Act, s. 32 (4).
In the Imperial Act when a payee or indorsee is wrongly designated or his name is misspelt, and he indorses the bill as described, he may or may not, at his option, add his proper signature, the words, "if he thinks fit," being inserted after the word "adding." These words were struck out in the Senate on the ground that if a person indorsed a bill otherwise than regularly in his own. name, he should be required to add his proper signature: Senate Debates, 1890, p. 362. They were however allowed to stand in a similar clause as to the acceptor, section 17 s-s. 3, so that an acceptor under similar circumstances is not obliged to add his proper signature. If he should indorse a bill by such wrong name or designation alone, it would no doubt be held to be a valid negotiation of the bill, as he would be presumed to have adopted that as his proper name.
It can perhaps hardly be said that there is any very Manner well settled rule as to the manner in which indorsements ment.
§ 32. should be made. It is important that the signature should follow as closely as practicable the form of the name as given in the bill or special indorsement. The following will probably be found to be in accordance with the best commercial usage:
Use the christian name or initials as in the bill or special indorsement if there be no mistake in the name as there given and no misspelling, dropping all prefixes and suffixes, such as "Mr." "" Mrs." "Miss,' 9966 Messrs.' "“ Hon." "Esq." etc. Where for the purpose of identification, an addition follows, such as "merchant," "M. D." "M. P." "Q. C." or the like, it may be well to add this to the signature. bill to the order of Mrs. John Smith may be indorsed "Mary Smith wife of John Smith;" or a bill" to the estate of John Jones, or order" by "A. B., executor or administrator late John Jones;" a bill "to the order of the City Treasurer, Toronto" by "A. C., City Treasurer, Toronto;" a bill to the order of "The Canada Gas Co.," by "The Canada Gas Co., per E. F., Manager;" a bill "to the order of John Smith & Co.," if by a partner should be indorsed simply "John Smith & Co." and if by another person authorized by the firm "John Smith & Co., per G. H. Atty." or "per pro. G. H."
Or ler of indorsement.
Signatures such as the following should be avoided, partly on the ground of ambiguity, and partly on account of the danger of the agent or representative making himself personally liable:-"A. B., agent for C. D.,” “Per proc. E. F., G. H.," "J. K. for the L. M. Co." "J. K. for L. M. & Co." " J. K., for the estate of L. M."
3. Where there are two or more indorsements on a bill, each indorsement is deemed to have been made in the order in which it appears on the bill, until the contrary is proved: Imp. Act, s. 32 (5).