the indorsement had been by the testator or intestate. But on their indorsement they are liable personally to the subsequent parties, and not as executors, &c. for they cannot charge the effects of the testator. So they may be the indorsees of a bill or note, in their King v. Thorn, quality of executors or administrators, and in that character 1 T. R. 487. may maintain an action on it. When a bill payable to order is expressed to be to the use of another person than the payee, yet the right of transfer is in the payee, and his indorsee may recover against the drawer or acceptor. VI. Of the several kinds of indorsement. Indorsements are either in full or in blank. A full indorsement is that by which the indorser orders the money to be paid to some particular person by name. A blank indorsement consists only of the name of the indorser. Kyd, 108. Kyd, 99. Rice v. Stearns & al. There are also what are called restricted indorsements; as "pay the contents to my use," or "to the use of a third 3 Mas. T. R. 227. person," or "carry this bill to the credit of a third person.” There is also a restricted indorsement of another kind, and which in practice is very common; and that is, where the promisee of a negotiable note indorses it to a third person, or his order, for value received, stipulating that the indorser is not to be responsible, if the maker does not pay it. Ibid. Hawkins v. Cardy, Salk. 65. S. C. A bill of exchange cannot be indorsed over for part of the sum it is drawn for; for that would subject the drawer 1 Ld. Raym. 360. or acceptor to several actions upon a contract which is entire. But the holder may have his action for part, if he acknowledge satisfaction for the rest. VII. The nature and effect of an indorsement. Per. Cur. in 3 Mas. Rep. 227. A security negotiable in its creation, must, during its negotiation, preserve its negotiable quality; otherwise Rice v. Stearns & al. when assigned, the assignee would hold a contract by the assignment different from the contract assigned. It is for Edie v. East India 2 Burr. 1216. this reason settled, that a negotiable note indorsed in blank, or by a direction to pay the contents to A. B. omitting the words "or his order," is further negotiable by the holder under such indorsement. As where the bill was payable to Campbell, or order, and indorsed by him to Ogilby, omitting the words " or order;" 1 Bl. Rep. 295, S. c. it was adjudged, that the note was further negotiable, though these words were wanting; for that the indorsement followed the nature of the original bill, which was negotiable. 1 Esp. Dig. 30. Ibid. Russel v. Longstaff, Kyd, 89. 1 Esp. Dig. 28. Clarke v. Pigot, 1 Salk. 126. Lucas v. Haynes, 1 Salk. 130. S. P. And the same principle applies in the case of promissory notes. An indorsement to a person's order is an indorsement to the person himself, as this is the usual form among merchants. If a person puts his name on the back of a blank piece of paper, which is afterwards to be filled up in the form of a note or bill, the person, so putting his name, shall be bound as an indorser of such note or bill, when made, to the amount of it; for the indorsement on such a blank piece of paper, is a letter of credit to an indefinite sum. A blank indorsement renders the bill or note afterwards transferable by delivery only, as if it were payable to bearer; for by only writing his name, the indorser shews his intention that the instrument should have a general currency, and be transferred by every possessor. But the mere indorsement of the name does not necessarily, and of itself, transfer the property in the bill or note As where plaintiff, having a bill of exchange payable to him or order on defendant, sent it to his friend J. S. to get it accepted, having first put his name on it. J. S. got it accepted; but it not being paid, plaintiff brought his action against the defendant; and it was contended that it would not lie, the property being transferred to J. S. But Holt, Ch. J. held, that J. S. had it in his power to act either as indorsee of the bill, by writing to that effect above plaintiff's name, or as his servant, by writing an acquittance to de fendant above it in like manner; that not having written an indorsement above, he took the note. to receive the money as servant to plaintiff; and so the action well lay. So where in the action by the payee, the note being proReed v. Lovell, duced, had his name on the back of it; and it was insisted 2 Stra. 1103," that that was an indorsement. The judge allowed it to be struck out in court; for being in blank, no property was transferred. An indorsee, for a valuable consideration, of a note not negotiable, may write over the name of the indorser, a promise to pay the contents of the note to the indorsee, who may maintain an action on such promise against the indorser. Josselyn v. Ames, 3 Mas. Rep. 274. Per. Cur. in 3.Mas. Rep. 227. As to restricted indorsements, it is settled, that when a negotiable security is indorsed thus, "pay the contents to Rice Stearns, & al. my use," or "to the use of a third person," or carry this bill to the credit of a third person," such an indorsement is not an assignment of the security, but is only an authority to pay the money agreeably to the direction of the indorse ment. Per. Cur. in 3 Mas. Rep. 227. Whether an indorsement thus, "pay the contents to A. B. only," is only an authority to A. B. to receive the Rice. Stearns & al. money for the use of the indorser, or for his own use, if made for value received; or whether in this last case, the restriction is not void, and A. B. may further negotiate it; seems not to be settled. If the property of the note be vested in A. B. perhaps he will hold it with its negotiable quality, notwithstanding the restriction. But of this the court gave no opinion. If the promissee of a negotiable note indorses it to a third person, or his order, for value received, stipulating that the indorser is not to be responsible, if the maker does not pay it; in such case, the note remains negotiable in the hands of the indorsee; and in whose hands soever the note may come, the maker is still liable according to the terms of his original contract to pay to the promisee or his order. Ibid. Per. Cur. in 3 Mas. Rep. 227, But in such case, the promissee, indorsing the note Rice v. Stearns & al. under this express stipulation, is not eventually holden to pay the note if the maker should not; for as the promissee had the property of the note, he might dispose of it on what terms he pleased, with the assent of the purchaser, and the latter cannot complain of the necessary effect of his own agreement; and the indorser cannot be charged upon his own contract, directly against the express intent of it. Powers v. Lynch, 3 Mas. Rep. 77. 2 Burr. 674. Rushton v. Aspinall, Bromley v. Frazer, VIII. In what manner and order the several parties are chargeable after indorsement. If the bill be drawn in a foreign country, and indorsed by one who has his residence there; in such case, the indorser is liable only according to the laws of that country. In bills of exchange, the acceptor is first liable, for he is charged by the acceptance, and the drawer only comes in aid of his default. Wherever, therefore, a bill of exchange is indorsed, the indorsee must first apply to the acceptor. On default of the acceptor, then recourse is to be had to the drawer; but in the case of an indorsement, every indorser is, as to his subsequent indorsee, a new drawer, and may be sued on default made by the acceptor. In every action, therefore, by an indorsee against an indorser or drawer of a bill of exchange, plaintiff must set out a demand first made on the acceptor, and a default by him; and, 2dly, notice to this effect to the defendant, or it is error. But the indorsee of a bill of exchange on default of the acceptor, may sue the indorser, and is not obliged to Heylin v. Adamson, shew any demand on the drawer, either in the case of an 1 Stra. 441. 2 Burr. 669 inland or foreign bill of exchange; for the indorsee may not know where he is to be found, and every indorser is as to him a drawer. The law of promissory notes is in strict analogy to 2 Burr. 676. this. Promissory notes assume the shape of bills of exchange, only where indorsed; for then the maker of the note is the first liable, and is as the acceptor of a bill of exchange, the indorsee as the payee, and the indorser as the drawer. The obvious result therefore of this, is, that according to the rule above, the indorsee must first make his demand against the maker of the note, and on his default, have recourse to the indorser. Therefore in an action by the indorsee against the indorser, he must prove notice to the indorser of the maker's default: but proof that the maker could not be found will excuse such notice, unless indorser shows that maker could be found. Syderbottom v. Smith, 1 Stra. 649. 1 Esp. Dig. 32. Bull, N. P. 273. 1 Esp. Dig. 32: Collins v. Butler, Indorsee must shew therefore that he used due diligence to make the demand from the maker of the note. For where indorsee proved, that the maker of the note which was due the 27th of December, had, in the Novem-2 Stra. 1187. ber before, shut up house and gone away, this was held not of itself sufficient to make a demand unnecessary; but that indorser should have made further inquiries. Vaughan v. Fuller, But the indorser may supersede the necessity of such a demand by his own act; as if he pays part of the note 2 Stra. 1246. this subjects him with the whole, and a demand upon the maker is unnecessary. Lambert v. Pack, As every indorser is therefore as a drawer in respect to the indorsee, if the action is brought by the indorsee Salk. 127. against the indorser, he is never called on to prove the hand writing of the drawer: for the indorser is liable on his own indorsement though the bill was forged. But if the indorsee bring's an action against the accep-Smith v. Chester, tor of a bill of exchange, he must prove the hand writing of the first indorser, even though such indorsement was on it when accepted. 1 T. R. 654. |