863

as closely as practicable the form of the name as given in the bill or special endorsement. The following will probably be Manner of found to be in accordance with the best commercial usage:

endorse

ment.

Use the Christian name or initials as in the bill or special endorsement if there be no mistake in the name as there given and no misspelling, dropping all prefixes and suffixes such as "Mr.," ," "Mrs.," "Miss," "Messrs.,' 99.66 Hon.," "Esq.," etc. Where for the purpose of identification, an addition follows, such as "merchant," "M.D.," “M.P.,” “K. C.," or the like, it may be well to add this to the signature. A bill to the order of Mrs. John Smith may be endorsed 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 "A. 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."

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."

Two or more Payees or Endorsees.-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 endorsed by only one of them in his own name. The full Court unanimously set aside a nonsuit, 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 endorsement was bad, because not signed by both payees. The jury, una

voce, declared they knew it perfectly to be as stated, and without hearing a witness found a verdict for defendant.

Where one party has the authority of the other and endorses in his name, it is in effect endorsed by both, so this is no exception. In the case of a partnership, a partner is presumed to have authority to endorse a bill payable to the order of the firm.

§ 63

payee's

64. Where, in a bill payable to order, the payee Misspelor endorsee is wrongly designated, or his name ling is misspelt, he may endorse the bill as therein name. described, adding his proper signature; or he may endorse by his own proper signature. 53 V., c. 33, s. 32(2). Imp. Act, s. 32 (4).

In the Imperial Act when a payee or endorsee is wrongly designated or his name is misspelt, and he endorses 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 endorsed 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 35, so that an acceptor under similar circumstances is not obliged to add his proper signature. If he should endorse 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.

order of

65. Where there are two or more endorsements Presumpon a bill, each endorsement is deemed to have tion as to been made in the order in which it appears on the endorsebill, until the contrary is proved. 53 V., c. 33, s. 32 (3). Imp. Act, s. 32 (5).

Each endorser undertakes to compensate the holder or a subsequent endorser who is compelled to pay the bill if the requisite proceedings on dishonour are duly taken: sec.

M'L.B.E.A-14

ment.

§ 65

Endorse

ment.

Disregard

tion.

133. As between themselves they may agree that this liability shall not exist, or even that it may be reversed: Macdonald v. Whitfield, 8 App. Cas. 733 (1883). Such an agreement would not affect the bona fide holder of a note who may treat the prior parties as liable in the order in which they stand on the note, although a contrary agreement, of which he was aware when he took it, may exist between the parties: Elder v. Kelly, 8 U. C. Q. B. 240 (1850); McLean v. Garnier, 14 N. S. (2 R. & G.) 432 (1881).

This agreement may be proved by parol: Wordsworth v. McDougall, 8 U. C. C. P. 403 (1858); Day v. Sculthorpe, 11 L. C. R. 269 (1861); Leveille v. Daigle, 2 Dorion, 129 (1880); Willett v. Court, 6 L. N. 204 (1883); Scott v. Turnbull, ibid, 397 (1883); Deschamps v. Leger, M. L. R. 3 S. C. 1 (1886); Wilders v. Stevens, 15 M. & W. 208 (1846); Macdonald v. Whitfield, supra; Coolidge v. Wiggin, 62 Me. 568 (1873).

66. Where a bill purports to be endorsed coning condi- ditionally, the condition may be disregarded by the payer, and payment to the endorsee is valid, whether the condition has been fulfilled or not. 53 V., c. 33, s. 33. Imp. Act., ibid.

An absolute endorsement is one by which the endorser binds himself to pay, upon no other condition than the failure of prior parties to do so, and due notice to him of such failure, and protest when required by law. A conditional endorsement is one by which the endorser annexes some other condition to his liability. Sometimes the condition is precedent and sometimes subsequent. Thus, " Pay to A. or order if he lives until he is 21," or "if he is alive when the bill becomes due," is an endorsement upon a condition precedent. "Pay to A. or order, unless before payment I give you notice to the contrary," is upon a condition subsequent. A condition attached to the endorsement does not restrain the negotiability of the bill.

This section alters the old law. In England, where the acceptor of a bill paid the indorsee who held under a conditional indorsement, the condition not having been fulfilled, he was obliged to pay a second time: Robertson v. Ken

sington, 4 Taunt. 30 (1811); Savage v. Aldren, 2 Stark. 232 § 66 (1817). In Quebec the same rule prevailed: "An indorse- Conment may be restrictive, qualified or conditional, and the ditional. rights of the holder under such indorsement are regulated accordingly": C. C. Art. 2288.

The new rule is much more equitable, as it was manifestly unfair to impose, for example, the duty upon an acceptor of determining whether or not a condition that had been placed upon the bill after his acceptance, and by parties of whom he might know nothing, had been fulfilled. By paying he ran the risk of being compelled to pay a second time; by refusing, his paper would go to protest, and he be exposed to costs.

It is to be observed that the section does not give the holder the right to compel payment if the condition is not fulfilled; it only discharges the person who pays. If the condition is not fulfilled the holder who receives payment may be responsible to the prior endorser who made the conditional endorsement.

A bill of exchange must be unconditional: secs. 17 and 18; an acceptance like an endorsement may be conditional: sec. 38 (3) (a).

67. An endorsement may be made in blank or special.

2. An endorsement in blank specifies no endorsee, and a bill so endorsed becomes payable to bearer. 53 V., c. 33, s. 32 (4), and s. 34 (1). Imp. Act, s. 32 (6), and s. 34 (1).

An endorsement in blank consists simply of the signature of the endorser. When so endorsed it may be negotiated by delivery: sec. 60 (2), unless or until the blank endorsement is converted into a special endorsement: s.s. 5.

Sub-section 2 has long been recognized as law in England: Peacock v. Rhodes, 2 Douglas, 633 (1781).

By the old French law indorsements in blank were not recognized: Pothier, Change No. 38; nor are they now except as "procurations" and not as negotiations of bills, the

Endorsement in

blank.

$ 67

Endorsement.

Special endorsement.

Applica

holder being merely the agent of the indorser: Code de Com. Arts. 137, 138. In Lower Canada the old French law was modified by 17 Geo. III. c. 2, which allowed notes of bankers, merchants and traders to be indorsed in blank. A tavernkeeper's note was held to be within the Act: Patterson v. Welsh, 2 Rev. de Lég. 30 (1819); McRoberts v. Scott, 2 Rev. de Lég. 31 (1821); and it was held that only bankers, merchants and traders could indorse in blank: Bank of Montreal v. Langlois, 3 Rev. de Lég. 88 (1847). By 12 Vict. c. 22, s. 1, it was enacted that any bill or note payable to the order of any person might be indorsed in full or in blank, and this was embodied in the Civil Code as Article 2286.

3. A special endorsement specifies the person to whom, or to whose order, the bill is to be payable. 53 V., c. 53, s. 34 (2). Imp. Act, ibid.

A special endorsement or endorsement in full is so called because the endorser not only signs his name but states in whose favor the endorsement is made. It may be in any of the following forms: "Pay to A. B.," which gave the right to negotiate the bill while a bill in that form was not negotiable: Edie v. East India Co., 2 Burr. 1216 (1761); or "Pay to A. B. or order"; or "Pay to the order of A. B.," which last is equivalent to the preceding, as it enables A. B. to demand payment without endorsing, or to endorse the bill at his option: sec. 22 (2). See Soares v. Glyn, 8 Q. B. 24 (1845); Harmer v. Steele, 4 Ex. 15 (1849); Robarts v. Tucker, 16 Q. B. 579 (1851); Law v. Parnell, 7 C. B. N. S. 285 (1859). A bill specially endorsed is negotiated by endorsement and delivery: sec. 60 (3).

A French endorsement must be dated, must declare how value has been given, and give the name of him in whose favor it is made: Code de Com. Art. 137.

4. The provisions of this Act relating to a payee tion of Act apply, with the necessary modifications, to an endorsee under a special endorsement. 53 V., c. 33, s. 34 (3). Imp. Act, ibid.

to.

Each endorsement is like a new drawing of the bill; if in blank, it is as if the new drawing were in favor of bearer;