§ 1671 tion. 855 And no costs can be recovered against the indorser in a bill in equity filed for a discovery against both maker and indorser after recovery of separate judgments at law against them, if the complainant knew, or had reason to know, that the maker was solvent.856

But under many of the statutes providing for joint action, and not expressly including guarantors, such an action will not lie against maker, indorser, and guarantor,857 or against maker and guarantor only,858 although under other statutes it has been held that the guarantor may be sued jointly with the maker.859

Plaintiff and Defendant Identified.

§ 1671. Where the maker of a note is appointed administrator of the payee, an action will lie against him in favor of a subsequent holder, since the title to the note and the liability upon it are no longer in the same person. But, where the payee appoints the maker his executor, it has been held that the note is satisfied, and the executor cannot transfer it, so as to enable his indorsee to

860

855 First Nat. Bank of St. Johns v. Tyler, 55 Mich. 297, 21 N. W. 353. 856 Austin v. Figueira, 7 Paige (N. Y.) 56.

857 Miller v. Gaston, 2 Hill (N. Y.) 188. But the rule is otherwise in TEXAS. Tooke v. Taylor, 31 Tex. 1. And as to an irregular indorser before delivery, see § 848, supra; Cawley v. Costello, 15 Hun (N. Y.) 303; Wade v. Creighton, 25 Or. 455, 36 Pac. 289.

858 Allen v. Fosgate, 11 How. Prac. (N. Y.) 218; Mowery v. Mast, 9 Neb. 145, 4 N. W. 69; Graham v. Ringo, 67 Mo. 324; especially where the guaranty is by a separate instrument, Barton v. Speis, 5 Hun (N. Y.) 60. And the action will lie against the maker after dismissal as to the guarantor. Phelps v. Church, 65 Mich. 231, 32 N. W. 30.

859 Hendrix v. Fuller, 7 Kan. 331; Whittenhall v. Korber, 12 Kan. 618; Gagan v. Stevens, 4 Utah, 348, 9 Pac. 706; Hammel v. Beardsley, 31 Minn. 314, 17 N. W. 858.

860 Byles, Bills, 57; Chit. Bills, 610; Nedham's Case, 8 Coke, 135. But the maker, after being appointed administrator of the payee, and having inventoried the note as a debt due from him to the estate, cannot be sued on the note by an administrator of the payee appointed in another state. Stevens v. Gaylord, 11 Mass. 255. And where the note was delivered by the deceased to A. without indorsement, and the maker afterwards became the payee's administrator, equity will compel an indorsement by him as administrator, and payment by him as maker. Hodge v. Cole, 140 Mass. 116, 2 N. E. 774.

bring suit upon it against him as maker.861 So, where the payee is one of the makers, he cannot sue the other makers, as he is jointly liable with them.862 And if a note is made by A. to his firm, A., B. & C., and they indorse it to C., D., and E., the indorsees cannot sue B. as indorser, since one of their number, C., is jointly liable with him. 863 For the same reason, where a bill is drawn by a partner upon his firm, and accepted by them as a firm, he cannot afterwards bring suit against them as acceptors." 864 But the payee of a note may sue the makers, although they have an interest in common as members of the same company.965 So, on a joint and several note by A. and B. to B. and C., the payees may sue A. on his several liability.866

Where one who has become liable on a bill or note afterwards regains possession of it, he cannot bring suit against intervening parties, to whom he would be liable again on his earlier undertaking. 867 So, where the purchaser under a second indorsement is liable upon the first indorsement as a partner, he cannot sue the second indorser. 868 But if the holder is not liable to the second indorsers, although he has previously indorsed the paper himself, he may bring suit against them.869 Thus, if a note payable to the firm of A. & B. is indorsed on their dissolution to B., as part of his share of the assets, and is afterwards indorsed by him to C., and by 861 Chit. Bills, 610; Freakley v. Fox, 9 Barn. & C. 130, 4 Man. & R. 18. 862 Byles, Bills, 42; Moffat v. Van Millengen, 2 Bos. & P. 124, note; Moore v. Denslow, 14 Conn. 235. But in KENTUCKY such note has been held to be that of the other makers only, and may be so sued, Morrison v. Stockwell's Adm'rs, 9 Dana (Ky.) 172; especially where the plaintiff signed it with his co-maker as executors of another person, Allin v. Shadburne, 1 Dana (Ky.) 68.

863 Mainwaring v. Newman, 2 Bos. & P. 120.

864 Neale v. Turton, 4 Bing. 149, 12 Moore, 365. 865 Van Ness v. Forrest, 8 Cranch, 30.

866 Beecham v. Smith, El., Bl. & El. 442. But see, contra, in the case of a joint and several note under seal, Glenn v. Sims, 1 Rich. Law (S. C.) 34.

867 Byles, Bills, 157; Chit. Bills, 607; 2 Daniel, Neg. Inst. 237; Bishop v. Hayward, 4 Term R. 470; Britten v. Webb, 2 Barn. & C. 483, 3 Dowl. & R. 650.

868 Decreet v. Burt, 7 Cush. (Mass.) 551.

869 Byles, Bills, 158; 2 Daniel, Neg. Inst. 237; Wilders v. Stevens, 15 Mees. & W. 208; Williams v. Clarke, 16 Mees. & W. 834; Morris v. Walker, 15 Q. B. 589.

C. back to A., for the purchase of A.'s interest in the firm, A. may bring suit against B. as indorser, although apparently liable with B. on the prior firm indorsement.870

Action against Stranger.

§ 1672. In general, only those named in the instrument as parties are liable to be sued upon it. But, where a third party makes a valid promise to pay a bill, he may afterwards be sued on such promise by a subsequent party who takes up the bill at its maturity.871 But no liability, implied from funds in hand, will generally be sufficient without an express promise on the defendant's part.872 Thus, where a party receives money for the purpose of taking up a bill, and offers to do so, shortly after its maturity, and after it had been already returned by the holder to his indorser, the holder cannot regain possession of the bill, and look to such party for its payment.873 And where one guaranties a bill to the acceptor, and the acceptor, drawer, and guarantor all become bankrupt, a later holder, who has discounted the bill, on being informed of the guaranty, but without notice either to the acceptor or the guarantor, cannot prove his claim as a creditor against the guarantor's estate. 874 So, one who guaranties a note upon a separate paper cannot be sued by the subsequent holder of the note.875 In like manner, parties through whose hands a note has passed by mere delivery need not be made defendants in an action upon the note.876

But one who obtains the credit, although a mere agent for another, is liable according to the form of his undertaking. And where the agent makes the note in his own name, without disclosing his

870 Hubbard v. Matthews, 54 N. Y. 43.

871 Chit. Bills, 569; Potter v. Rayworth, 13 East, 417; Barlow v. Myers, 64 N. Y. 41.

872 Wedlake v. Hurley, 1 Cromp. & J. 83; Williams v. Everett, 14 East, 582; Grant v. Austen, 3 Price, 58. See, too, Brind v. Hampshire, 1 Mees. & W. 365.

873 Chit. Bills, 361; Stewart v. Fry, 1 Moore, 74, 7 Taunt. 339.

874 Ex parte Stephens, 3 Ch. App. 753.

875 McLaren v. Watson, 26 Wend. (N. Y.) 425.

876 Riley v. Schawacker, 50 Ind. 592.

$77 Orr v. Union Bank, 1 Macq. 513.

principal, he alone is liable on it.878 And an action will not lie against one as maker who does not appear as such on the face of the paper, without proof that he was actually such, and used or recognized the name signed as his.879 But an acknowledgment that he was responsible for the note, although the purchaser takes it on the faith of such acknowledgment, is not an acknowledgment of the signature or the note as his. 880 So, the widow and heirs of B. will not be liable on a note signed by "A., Attorney of Estate of B."881 But where money is loaned to an agent for the business of a firm, and is so used, and a bill is drawn by the agent in the name of one partner, the firm may be liable on the money counts, although not liable on the bill.882 If, however, goods are sold to a corporation, and the note of an agent taken in payment, and judgment is recovered on it against the agent, it will be a bar to further suit against the corporation.883 So, too, if the agent has charged the amount to his principal, and the note has been proved by the holder against the insolvent agent, and a dividend received on it from his estate.***

878 Cragin v. Lovell, 109 U. S. 194, 3 Sup. Ct. 132. Thus, the president of a corporation has been held individually liable on a note signed by him in the corporate name, with his own name added below with the suffix "Pres.." Heffner v. Brownell (Iowa) 31 N. W. 947; while the corporation has been held on a note signed by the president and secretary in their official names. Farmers' & Mechanics' Bank v. Colby, 64 Cal. 352, 28 Pac. 118. So, A.. B., and C. are liable as acceptors on a bill drawn upon them, and accepted by A. in his own name, by authority of B. and C. Jenkins v. Morris, 16 Mees. & W. 877. For a full discussion of the liability of principal or agent, respectively, as determined by the manner of execution, see § 131 et seq., supra.

879 Keck v. Brewing Co., 22 Mo. App. 187.

880 Bolles v. Walton, 2 E. D. Smith (N. Y.) 164.

881 Merchants' Bank v. Hayes, 7 Hun (N. Y.) 530.

882 Allen v. Coit, 6 Hill (N. Y.) 318.

883 Bradlee v. Glass Manufactory, 16 Pick. (Mass.) 347. But see, where the note was signed "A. B., treasurer of the H. G. Co.," McClure v. Livermore, 78 Me. 390, 6 Atl. 11, and 7 East. Rep. 258.

884 Bedford Commercial Ins. Co. v. Covell, 8 Metc. (Mass.) 442.

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§ 1673. The forms of action vary materially in the different states, and are regulated by the local practice. When a bill is dishonored, the owner may ordinarily bring his suit either on the bill itself or on the original consideration, or both counts may be joined in one action. In general, it is advisable that the suit be brought on the bill, since the plaintiff must otherwise not only prove the considera

1 Byles, Bills, 420; 2 Edw. Bills & N. § 933; 2 Pars. Notes & B. 436. But in the latter case there must be a privity of contract between the parties. 2 Edw. Bills & N. § 934.