(3.) Where a restrictive indorsement authorises further transfer (e), all subsequent indorsees take the bill with the same rights and subject to the same. liabilities as the first indorsee under the restrictive indorsement.

(a.) A blank indorsement may be made either by writing the simple signature of the indorser on the bill, or by writing above the signature the words, "Pay to

or order,"

or, "Pay to
or bearer." In each of these cases the
bill so indorsed becomes payable to bearer, vide § 8 (3), and
remains so until the blank indorsement becomes converted
into a special indorsement. If the blank indorsement be
followed by a special indorsement, the bill remains payable
to bearer in virtue of the blank indorsement, but the holder
must cancel the subsequent indorsements, I. Bell's Com. 428.
Where a person takes a bill with a blank indorsement,
followed by special indorsements which have been cancelled,
he may be thereby affected by notice that the title of his
transferor is defective, Crook v. Jadis, 5 C. and P. 194.

(b.) A special indorsement runs, "Pay to A. B.," or, " Pay
to A. B. or order," or, "Pay to A. B.'s order.”
In each case
the bill is then payable to the specified person or to his order,
vide § 8 (4, 5).

(c.) When not payable to bearer, the indorsee must be
named or indicated with reasonable certainty, vide § 7 (1).
The bill may be indorsed to two or more joint indorsees,
or to one of two or one or some of several indorsers, and
the indorsee may be the holder of an office for the time being,
vide § 7 (2); and if indorsed to a fictitious or non-existing
person, may be treated as payable to bearer, vide § 7 (3).
(d.) Vide § 2.

(e.) Vide § 35.

$ 34.

indorsement.

35. (1.) An indorsement is restrictive (a) which Restrictive prohibits the further negotiation (b) of the bill, or

§ 35.

which expresses that it is a mere authority to deal with the bill as thereby directed and not a transfer of the ownership thereof, as, for example, if a bill be indorsed, "Pay D. only," or "Pay D. for the account of X.," or "Pay D. or order for collection "(c).

(2.) A restrictive indorsement gives the indorsee the right to receive payment (d) of the bill, and to sue any party thereto that his indorser could have sued, but gives him no power to transfer his rights as indorsee unless it expressly authorises him to do so.

(a.) Wherever it is doubtful whether an indorsement is or is not restrictive, it is held to be unlimited, and where an indorsement is unrestricted, parole evidence is not admissible in a question with a holder in due course, Soarez v. Glyn, 14 L. J., Q. B. 313, and note (b) on § 100. Where an indorse

ment does not purport to be restrictive, parole evidence will be competent to prove that the bill with the indorsement was not delivered for the purpose of passing the property, vide note (g) on § 21 and note (b) § 100.

(b.) Vide § 31.

(c.) An indorsement," Pay to A. B. or order, value in account with H. C. D.," is not a restrictive indorsement, Buckley v. Jackson, L. R. 3, Ex. 135.

(d.) Vide $$ 38 and 59.

(e.) Where the words "or order" are added, the indorsee is authorised to delegate his duty of collection to a third party, who must pay the amount received to the indorsee that he may account for it; or if the third party retains it, he may be called on to account for it directly to the first indorser. The last indorsee cannot apply the sum received by him from the drawee in payment of any debt owing to him by the indorsee under the restrictive indorsement.

$ 36.

36. (1.) Where a bill is negotiable (a) in its origin, it continues to be negotiable until it has been (a) restric- Negotiation of tively indorsed (b) or (b) discharged by payment or honoured bill. otherwise (c).

(2.) Where an overdue (d) bill is negotiated (e), it can only be negotiated subject to any defect of title (ƒ) affecting it at its maturity, and thenceforward no person who takes it can acquire or give a better title (g) than that which the person from whom he took it had.

(3.) A bill payable on demand (h) is deemed to be overdue within the meaning and for the purposes of this section when it appears on the face of it to have been in circulation for an unreasonable length of time (i). What is an unreasonable length of time for this purpose is a question of fact.

(4.) Except where an indorsement bears date after (j) the maturity of the bill, every negotiation is primá facie deemed to have been effected before the bill was overdue.

5.) Where a bill which is not overdue has been dishonoured (k), any person who takes it with notice of the dishonour takes it subject to any defect of title attaching thereto at the time of dishonour, but nothing in this subsection shall affect the rights of a holder in due course (1).

(a.) A bill is negotiable in its origin which, when drawn, does not contain words "prohibiting transfer, or indicating an intention that it should not be transferable," vide § 8 (1). A bill payable to a specified person without the addition

overdue or dis

6.

of the words, "or order," is now negotiable in England as well as in Scotland, vide § 8 (4).

(b.) Vide § 35.

(c.) A bill is discharged (1) by payment in due course by or on behalf of the drawee or acceptor, or, in the case of an accommodation bill, by the person accommodated, vide § 59 ; (2) where the acceptor is or becomes the holder in his own right of the bill at or after maturity, vide § 61; (3) when the holder at or after maturity renounces in writing his rights against the acceptor, vide § 62 ; (4) where a bill is intentionally cancelled by the holder or his agent, and the cancellation is apparent thereon, vide § 63; or (5) where the bill is materially altered without the assent of all parties liable on the bill, vide § 64. A bill which has been extinguished by the running of the years of prescription cannot be negotiated, vide note (c) on§100.

(d.) A bill payable at a fixed or determinable future period, vide § 11, is overdue on expiry of the last day of grace, vide $ 14.

(e.) Vide § 31.

(f.) Vide § 29 (2).

(g.) The transferee of an overdue bill is liable to all personal defences pleadable against a previous holder, vide § 38, unless he derives his title through a holder in due course, vide § 29 (3). This section substantially re-enacts the provisions of 19 & 20 Vict. c. 60, § 16.

(h.) Vide § 10.

(i.) The case of Rothschild v. Corney, 9 Barnewell and Cresswell, 388, may be referred to in illustration. The plaintiff, on 19th January, was induced by the fraud of his clerk to sign two cheques, which were passed to a person named Brady. On 24th January Brady carried the cheques to the defendants, and asked them to give him cash therefor, which the defendants did. They then presented the cheques through their own bankers to the bankers on whom they were drawn, and received payment of them. An action was then brought by the plaintiff against the defend

It was

$ 36.

ants for payment of the sums in the cheques.
admitted that the defendants had given cash for the cheques
in bona fide, but it was contended (1) that they had acted
carelessly in taking the cheques; (2) that the cheques were
overdue when handed to them. The first question was held
to be a purely jury question; and as to the second, Lord
Tenterden, in refusing a new trial, said, "It cannot be laid
down that, as matter of law, a party taking a cheque after
any fixed time from date does so at his peril, and that the
mere fact of the defendants having taken the cheques five
days after they bore date, from a person who had not given
value for them, did not entitle the plaintiff to a verdict."

The onus of showing that the bill has been in circulation for an unreasonable length of time lies on the person assailing the holder's title. See § 86 as to notes payable on demand.

(j.) Where an indorsement is undated, it is presumed to have been made of the same date as the bill, II. Bell's Com. 173. In England there is no presumption as to the date of an indorsement beyond that stated in this subsection. Whether an indorsement is undated or bears a date prior to the maturity of the bill, the true date of negotiation may be proved by parole, vide § 100. Where an indorsement is dated, the date, unless the contrary be proved, is deemed the true date, vide 13 (1).

(k.) Vide § 43.

(1.) Vide §§ 29 and 38.

bill to party

already liable

thereon.

37. Where a bill is negotiated back to the drawer, Negotiation of or to a prior indorser or to the acceptor, such party may, subject to the provisions of this Act, reissue and further negotiate the bill, but he is not entitled to enforce payment of the bill against any intervening party to whom he was previously liable (a).

(a.) Where a bill is negotiated, vide § 31, to a party already liable thereon, he may reindorse it, and the indorsee